CAN SOMEONE EXPLAIN productivity bonuses...NEW GRAD

[MrsPA2u]

loaded question: Derm position--but I would just like to understand from a general standpoint

 

My contract states "will be compensated at a rate equal to 15% of collections above 150k per annum" I've seen many posts that include some variation of this, although I don't exactly understand how it works.

 

Specifically, how is it measured?

What expenses are included (office visits, procedures, products, etc)

When Is the bonus "typically" paid out to you? (I know my contract says per annum)

But should it be EACH time I generate collections above 150K?

How realistic is it to reach that mark as a new grad?

Is the bonus amount tax free?

And shouldn't I always be allowed access to my productivity data?

[tunafish]

payments for your practice must yield over 150K a year in order to get the bonus

Anything over 150K will get you 15% as a bonus. You bring 250K that year you will get (250-150)x0.15=15K as a bonus.

OF COURSE it is a taxable income

What would be determined as "your payments" for clinic is up to you to discuss. Are they built under your NPI, do you tally all your visits yourself, are you allowed access to the actual collection data so you could check on your earnings is a different story.

[MrsPA2u]

payments for your practice must yield over 150K a year in order to get the bonus

Anything over 150K will get you 15% as a bonus. You bring 250K that year you will get (250-150)x0.15=15K as a bonus.

OF COURSE it is a taxable income

What would be determined as "your payments" for clinic is up to you to discuss. Are they built under your NPI, do you tally all your visits yourself, are you allowed access to the actual collection data so you could check on your earnings is a different story.

--

 

Now that you've explained it as such....I COMPLETELY understand! I really appreciate the example you provided as well. It all makes perfect sense!

 

Now I feel more prepared to make an informed decision!

 

Thanks so much!!

[JtheWorker]

Seems reasonable if you have a decent salary to go along with this. I believe it would not be unrealistic for you to, within a few solid years being dedicated and full-time, bring in 500k to the practice. This would mean a bonus of 500k-150k=350k * 15% = 52.5k.  Then if your salary was 90k, total income would be 52.5k+90k= 142.5k. The bonus sounds like it's paid out once a year so you would have to budget very wisely.  

[mgriffiths]

I never understand why employers do annual productivity bonuses vs. monthly or at least quarterly.  A lot of the jobs I've seen are quarterly, if not every paycheck, but any job that has only an annual productivity bonus I would want that changed if it is a substantial part of my income.

[Reality Check 2]

In corporate medicine, they only pay annually because THEY keep the money and make interest off it while you don't have it.

 

Also, there are lots of hidden "what ifs" - such as "holding" a portion of money due to you in case you quit or under achieve or a bunch of other weird phrases that take money away from you.

 

I would have an employment attorney go through the contract before signing.

 

Make sure you have 100% transparency on billing and know if you pay overhead.

Make sure you can understand it or an attorney can.

 

ANY money you receive is taxable - always and forever. No free lunch.

 

Clarify, clarify, clarify. Use examples and ask for pencil and paper examples or actual reports from other PAs redacted for personal info.

 

Skeptical - yeah, I have been there. Absolutely NO ONE is going to be 100% generous to just give you money.

[MrsPA2u]

Thank you ALL for your responses. I politely declined the offer after my lawyer advised me to run for the hills. The practice was unwilling to provide clarification. Therefore, I was MORE THAN WILLING to KEEP LOOKING!!

[Poetsiren]

Thank you ALL for your responses. I politely declined the offer after my lawyer advised me to run for the hills. The practice was unwilling to provide clarification. Therefore, I was MORE THAN WILLING to KEEP LOOKING!!

 

Wait, what was wrong with it? What clarification did you need? .... I think I missed something, lol. Was it access to the collection data that was the problem?