This physician decided
This physician decided

Understanding salary vs. total compensation

Read PracticeLink articles by Megan Trippi
Megan Trippi

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You’re looking for jobs, interviewing and starting to receive offers, but how do you know which provides the best value for you? To understand your offer, it’s important to know all the aspects of the contract, especially how it will impact your earning potential.

Compensation is a large factor when accepting an offer, especially if it’s your first position. Overall compensation can vary based on salary, shares, productivity bonuses, RVUs (relative value units used in reimbursement formulas for physician services), benefits and expenses.

Your salary is the base level of pay you will make, but specialty, location and experience will also play a part in that amount. Oftentimes, you may receive only a salary for a year or less before earning incentive or bonus pay, so you want to look at the compensation structure and how it affects your income.

Different organizations may use different compensation models. The most common are:

Straight salary

The straight salary, or 100% salary, model gives a prearranged and fixed income with no variation or bonus incentives.

This is easy to manage and lets you know what to expect each paycheck, but does not incentivize you to bring in new patients.

Salary plus incentive

With salary plus incentive, you receive a base salary with additional bonuses based on various factors such as productivity, patient satisfaction and quality of work.

Based on the structure of the overall compensation plan, this can increase productivity and reward you for excelling in certain aspects of the practice.

Be sure the bonus structure and incentives are clear and objective so you can understand how your income is decided.


Pure productivity can sound concerning since you are solely compensated based on a percentage of what you bring into the practice.

However, it can be a motivating factor when your organization allows for possible equity or if you are interested in starting your own practice.

Equal shares

This type of compensation is often viewed as straightforward and fair because it takes the practice’s earnings after all expenses have been paid and divides the remaining income equally among physicians.

This type of compensation can help promote a positive work environment since each physician has equal investment, but it can create division if you and the other physicians have varying experience and skill levels.


Capitation payments are pre-negotiated amounts per patient or unit, and you are paid based on the number of patients you see.

This can be nice if you are joining a well-established practice with a guaranteed patient base. However, your income can also be unpredictable when changes occur in the practice.



A basic benefits package can include health, dental, vision and malpractice insurance coverage. It is also common to receive professional membership dues, reimbursement for continuing medical education, vacation and sick leave, retirement savings plans and disability insurance. A majority of organizations will pay a portion of or all professional dues and medical licensure fees and allow time off for CME activities.

Flexible work schedules and better work-life balance are extremely important, especially after 2020. Some organizations will offer more flexible schedules and the added benefit of maternity and family leave.

You may also receive fixed moving allowances or reimbursement for a percentage – or all – of your relocation expenses on top of the other benefits contained in your offer.


Salary is valuable when comparing offers, but don’t let a large salary cloud your judgement if other benefits and bonuses aren’t provided in the overall compensation. It’s important to look at the contract and compensation package as a whole to make the best decision when accepting an offer.

Read PracticeLink articles by Megan Trippi

Megan Trippi

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