Benefits Percent - Multi-Pedia

Benefits As a % of Salaries = Total Benefits/Total Salaries

This percentage represents benefit expense as a percentage of salaries, not including contract labor. Examples of benefits are health insurance, dental insurance, worker's compensation, pension and retirement plans, etc. They do not include PTO or vacation pay. Benefits in a typical Hospice run approximately 22%-25%.

Benefits in the Chart of Accounts

Many Hospices have a Chart of Accounts with "tons" of accounts for benefits. Every department or discipline has accounts for every type of benefit. We encourage a Hospice to be somewhat "anal-retentive" about breaking out personnel costs since they comprise 60-75% of a Hospice's costs. If you had benefit accounts for each, you would increase the size of your COA by hundreds of accounts. The solution is easy. Only use a master account for each type of benefit. By this, I mean you would have an expense account for:

You would then allocate benefits as a percentage of Salaries and Wages on financial statements. This is a more efficient way of tracking benefits. Here are advantages to using master accounts for benefits:

Though most accountants are anal-retentive, this is one area where it is not necessary. Also, if your auditors want you to change from this master account approach to a break-out of 200 accounts... DON'T!


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