Monthly Salary Budget and Year-to-Date Budget Comparison Report Fiscal Year Ending June 30
Position
June Actual Salary
June Budgeted Salary
June Variance
Year-to- Date Actual Salary
Year-to-Date Budgeted Salary
Year-to-Date Variance
Nurse Manager $6,250 $6,250 $0 $68,750 $75,000 $6,250
Registered Nurses
95,722 93,825 (1,897) 1,048,813 1,125,878 77,065
Licensed Practical Nurses
19,025 20,800 1,775 231,426 249,600 18,174
Nursing Assistants
14,886 13,200 (1,686) 159,500 158,400 (1,100)
Unit Clerks 5,483 5,495 12 60,391 65,273 4,882
Float Pool RNs 1,426 1,000 (426) 16,800 12,500 (4,300)
TOTAL SALARY: $142,792 $140,570 ($2,222) $1,585,680 $1,686,651 $100,971
190 PART 3 • MANAGING RESOURCES
Divide replacement time by annual FTE base
256
2,080 = 0.12
An FTE budget is calculated from the FTE calculations (Table 14-1). This budget provides the base for the salary budget. However, shift differentials, overtime, and bonuses or premiums may also affect budget performance and need to be considered.
Shift Differentials Some facilities use a set percentage to determine shift differential: 10 percent for evenings, 15 percent for nights, and 20 percent for weekends and holidays, for example. If the hourly rate is $18.00, for instance, then the cost for a nurse working evenings would be $18.00 plus $1.80 for each hour worked. On an eight-hour shift, the total cost would be $158.40, and for the year, $41,184. Other facilities use a set dollar amount per hour as the shift differential. For instance, evenings adds $2.50 per hour to base pay, night shift $4.00, and weekends $2.50 additional pay.
Overtime Fluctuations in workload, patient volume, variability in admission patterns, and temporary replacement of staff due to illness or time off all create overtime in the nursing unit. A projection of overtime for the next year can be calculated by determining by staff classification (RN, LPN, nursing assistant, and other employee classifications) the historical or typical number of hours of overtime worked and multiplying that number by 1.5 times the hourly rate. For example, if the average number of overtime hours paid in a unit for RNs is 35 hours per two-week pay period, and the average hourly rate is $18.00, the projected overtime cost for the year would be $24,570 for the RN category.
To determine overtime costs:
1. Multiply average salary for classification $18.00 by factor * 1.50 to obtain overtime rate $27.00
2. Multiply average overtime hours 35 by overtime rate * $27.00 to obtain expenditure per pay period $945.00
3. Multiply number of pay periods 26 by overtime expenditure * $945.00 to obtain annual overtime costs $24,570.00
Clearly, overtime can rapidly deplete finite budget dollars allocated to a nursing unit. The nurse manager should explore options to overtime, such as using part-time or per diem work- ers in order to keep the cost per hour more in line with the regular hourly rates. A competent manager certainly would also evaluate unit productivity to decrease overtime.
On-Call Hours If the nursing unit uses a paid on-call system, the approximate number of hours that employees are put on call for the year should be estimated and that cost added to the budget. Typically under the on-call system, staff members are requested to be available to be called back to work if patient need arises, and the number of hours on call are paid at a flat rate per hour.