One Response to “Associate Compensation”

1. Dr. Tom Snyder says:

   July 23, 2009 at 3:49 pm

   The compensation arrangement that you should agree to for a buy in should be the same rate that you would receive if you were working as an associate with no consideration for a buy in. Compensation rates are based on local market conditions meaning that some areas of the country will pay an associate more than other areas of the country, due to supply and demand of associates in a particular area. We recommend that associates be paid on a percentage of associate collection minus lab expense. Rate vary anywhere from 30% to 37% of collections. The corresponding lab deduction would be the rate that you would be paid. For example 33% of collections minus 33% of lab expense.

   Some advisors recommend that the employer “hold back” a portion of the associate’s compensation during their employment phase as a way to accumulate funds for a buy in. For example, let’s assume that your compensation rate should be 35% of collections. Let’s assume that 5% of this amount is withheld toward a future buy in. Therefore, you would receive only 30% as your current pay rate. It is important that the appropriate structure for an “escrow account” be established when using this approach or there may be possible tax ramifications or, even worse, loss of funds in the event that a creditor or third party can attach those funds that are being held.
   Let me know if I can be of any further help.

   Tom Snyder, DMD MBA
   The Snyder Group
   http://www.snydergroup.net
   800-988-5674