Federal Nursing Home Administrator Practice Exam

What percentage of operational costs does payroll typically represent?

1. 10-20%

2. 30-40%

3. 50-70%

4. 80-90%

The correct answer is: 50-70%

Payroll typically represents a significant portion of operational costs in healthcare facilities, generally falling within the range of 50-70%. This high percentage is due to the labor-intensive nature of nursing homes, which require a substantial number of staff members, including nurses, aides, administrative personnel, and support staff, to provide quality care to residents. In this context, the correct answer reflects the reality of staffing needs and associated costs in nursing homes. Given the essential services these facilities provide, maintaining an adequate workforce is critical for compliance with regulations, quality assurance, and overall resident satisfaction. Labor costs encompass salaries, benefits, and additional expenses related to employees, which further contribute to the high percentage of operational costs attributed to payroll. Other potential ranges, such as 10-20%, 30-40%, or 80-90%, would not accurately represent the widespread need for staffing in such facilities, and those figures tend to underestimate the financial demands of operating a nursing home effectively.