Whether you just graduated from dental school, finished a residency program or specialty training, the majority of young dentists begin their careers as associates. The road to becoming an associate is full of variables, and knowing the “lay of the land” can help you make wise decisions. The journey begins with choosing the practice that is right for you.
Consideration #3 – Compensation
Compensation can be structured in many ways, but should be fair and adequate to meet your personal budget needs.
Compensation methods may include:
Per Diem Rate. Part-time associates are typically offered per diem rates of $400 to $600 per day, depending on geographic area, or a variation of a rate that includes a minimum daily “guarantee” and an extra percentage based on extra clinical production per day. The variable per diem rate can be attractive as your productivity and proficiency increase.
Salary. Full time associate salaries range from $5,000 to $7,500 per month based on the geographic area. It is not unreasonable to begin an associate relationship with a guaranteed
salary, since employers may place limitations on the clinical procedures, especially with recent graduates. After the initial probationary period is complete, the guaranteed salary is usually replaced with a draw.
Monthly Draw. A draw is a monthly salary but it is not guaranteed. It is an advanced payment for future services rendered. The draw is credited against a commission arrangement.
Most practices pay on a percentage of collection but some will use net production. Compensation rates vary throughout the country but normally range between 30-40% of collections.
If the commission relates to net production, the rates vary between 28-37%. Lab charges are usually made against your compensation at the same percentage of your commission.
When you are paid a draw, you’ll need to reconcile what you have been “advanced” versus what you actually produced or collected over a defined period. This reconciliation is usually done on a monthly or quarterly basis. Reconciliation payments are recorded as additional salary. If there is a shortfall between your draw and what was produced or collected, your draw may be lowered for the next period, since you were essentially overpaid. However, this can be avoided if you monitor your monthly production or collections.
Fringe Benefits. Many practices provide full-time associates with single coverage health insurance. Additionally, we recommend that a continuing education allowance of $1,000 to $1,500 per year be provided to help associates further develop their skills. When practices provide pension plans for full-time employees, associates can be included. However, participation in these plans usually occurs after employment of one-to-two years. Provisions for vacation time, sick time, and personal time also should be spelled out. In most instances, associates do not receive paid vacation or sick days.
About 45% of general practices pay for malpractice insurance premiums. In specialty practices, they often pay the full premium. Some employers will pay your malpractice premium and charge it against your salary, since you normally cannot take this expense as a deduction on your personal tax return. If you receive a comprehensive fringe benefits package, the compensation rate that you receive may be lower than those associates who receive no fringe benefits.