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Hello Everyone! Newly graduate just wondering what is the advantage/disadvantage for salary vs percentage pay if planning to work with associate in private practice. What should I expect or look out for in this situation. All comments appreciated.

Both methods have advantages for the employee and employer with no clear favourite.

Percentage:
- for employee, the advantage is that you can make more money if you are prepared to put the work in and are good at your job; the disadvantage is that if the work is not there, you do not get paid much
- for the employer, the advantage is that its a good way to motivate the employee; they do not have to pay them if they are not generating revenue and bringing patients in; do not have to pay holiday pay etc; the disadvantage is that they could end up paying a huge amount of money (which is not bad as they will be making it); another disadvantage is motivating the employee to do things that are not directly related to patient care and generating revenue (theoretically they not paying for this); there is also the ethical risk of employees 'over-servicing' patients to generate income

Salary:
- the advantage to employee is that you get paid every week (probably less than on a %, as the employer is carrying the risk of a quiet time in business and not the employee); holiday pay and other benefits is also probably included; pay will generally be less than a % if you good at your job, BUT may be more than the % if you not good at your job; a fixed salary at least lets you know what you will get from week to week (and can budget accordingly), whereas a % will vary
- for the employer they have a fixed amount they know they have to pay; the disavantages is holiday entitlements have to be covered and a salary is not as motivating for an employee; they will probably have to pay less under a salary than a % as they taking the financial risk of quiet periods

As the end of the day, I see no definitive answer - it has to match the employers and employee profiles and also the "risk" either party is willing to take -- also keep in mind that the legal requirements of either situation will vary in different jurisdictions.

In my wifes clinic we pay a very low salary with a small % on top of that - its covers the advantages and disadvantages of both systems for both the employer and employee. The way its set up is that the salary + % means they can get a very good income if they are good at what they do and are motivated to put the work in. Its also means a new graduate has the potential to earn more than me .... if they want to

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Craig Payne
Department of Podiatry
La Trobe University
Melbourne, Australia
http://www.latrobe.edu.au/podiatry
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God put me on this earth to accomplish a certain number of things - right now I am so far behind, I will never die.
The views expressed above are those of the author and not that of La Trobe University
This is where I am, where are you?

^ ^ Thank you...that was very helpful

I think the Percentage Pay is good for yong people！

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Rodney Cheng

Is it wrong for me to ask Craig what percentage arrangement he has with his staff. I understand if that is confidential & apologise for any offense.

Its varied. Depends on negotiation. Can be 10% and has been as high as 50% -- base salary is obviously adjusted to reflect this. It all depends on the "risk profile" and which party is willing to take on the greater risk (and get the remuneration for taking on the risk)

__________________
Craig Payne
Department of Podiatry
La Trobe University
Melbourne, Australia
http://www.latrobe.edu.au/podiatry
__________________________________________________ ___________________________________
God put me on this earth to accomplish a certain number of things - right now I am so far behind, I will never die.
The views expressed above are those of the author and not that of La Trobe University
This is where I am, where are you?