Benefits as a percentage of hospital salary costs describe which concept?

• A. The portion of total salary expenses allocated to employee benefits
• B. The portion of revenue spent on employee benefits
• C. The cost of benefits per employee
• D. The percentage of benefits that is taxed

Answer: (B)

Benefits as a percentage of hospital salary costs looks at how much of the hospital’s funding is used to cover employee benefits relative to the money the hospital brings in to pay expenses. In other words, it expresses the share of revenue that must go toward benefits, since revenue funds all costs including salaries and benefits. This makes the concept about the portion of revenue devoted to employee benefits, not just how benefits relate to payroll dollars or per-employee amounts. Other options describe different measures (cost per employee, a taxed portion, or the internal allocation of salary expenses), which aren’t what this ratio conveys.