Whether you’re a new grad or an internationally educated physiotherapist trying to land your first physiotherapist job, you’ll end up having a conversation with an employer about compensation.
While many of us think of compensation as only our salary, it can be so much more than this and can include a range of other benefits that should be considered.
For those of you who are evaluating hospital job opportunities you’re going to find the compensation conversation a little simpler. More often than not, the employment environment is unionized and employment pay scales and benefits are standardized (assuming you’re applying for a union position). Typically your pay is determined by years of experience and your position title (e.g. Physiotherapist I, Physiotherapist II, etc). If you’re applying for jobs at a private clinic you may find things a little more confusing as each clinic employer may approach compensation differently.
The Foundation: Employee vs Contractor Relationship
There’s a few things you’ll have to sort out. First off you’ll need to understand the ins and outs of whether you want to be an employee or a contractor. If you’re not sure what the differences are between an employee vs contractor you’ll want to take a look at an article we recently published titled Employee or Independent Contractor: What does it matter for a physiotherapist?
This article goes into detail about the key differences between an employee vs contractor relationship and the criteria that the Canadian Revenue Agency (CRA) uses when evaluating your true relationship with an employer. Getting this distinction right is important as there are tax and legal implications that could negatively impact you if you were ever audited by the CRA. Understanding the criteria will equip you with the knowledge to protect yourself in the future.
Compensation: Money Matters
Having a good grasp of the key areas of compensation will allow you to have a meaningful conversation with your potential employer and help you to negotiate a position that will work for you. As well, understanding this information will help to increase your confidence when agreeing to an employment contract and any potential ramifications you may face down the road.
Let’s talk about one of the most common items:
Percentage Pay vs. Salary
More likely than not, if you’re working in a private clinic, you will be paid a percentage of your total patient revenue that you generated over the past month. This is often known as being paid a fee-split. The fee-split percentage varies by clinic and as the treating provider you can receive anywhere from 40-60% of your billings. Typically when starting out you are paid less and the opportunity exists to increase that percentage over time through additional education or years of service.
Some employers may provide the option to you of being paid an hourly wage when initially starting out. This can help take the stress of worrying about your billables so you can focus on caseload management and private practice life. As you get busier you’ll want to track the tipping point where your fee-split is consistently higher than your hourly rate. At that time you may feel more confident moving to a fee-split model of pay.
Billables vs. Receivables
There are two main differences that you will encounter when discussing a fee-split structure. The first is whether your percentage is based on billables or on receivables. Let’s delve into this a little more.
Being paid by billables vs receivables is all about whether you or your employer takes the risk of delayed payment by patients (or their payment providers).
If you’re paid on receivables, you will be paid when the clinic receives payment for the services you provided. For a private pay patient, payments are typically immediate (for example they pay by credit card), however, extended health providers can vary in their reimbursement schedule. There are occasions where private pay patients fail to pay and invoices may be written off because of this. This can often be referred to bad debt.
For motor vehicle accident services and government provided funding there can also be a delay in payment. The clinic administration works to reduce the time to receive this money as it can negatively impact clinic cash flow. Sometimes the delays are quite minimal (30 days), however there can be situations where motor vehicle claims can not be paid out for many months.
As you can see payment schedules can vary by provider. More often than not a clinic administrator is responsible for managing and monitoring their receivables as it benefits everyone to get payments for services rendered.
When looking at getting paid by billables vs receivables, it really comes down to risk and who carries the risk. If you are paid on receivables the clinician will only get paid when those monies are received by the clinic. If it is based on the billables, the clinic is taking on the risk to ensure proper accounts receivable management.
A few important questions you can ask during your salary negotiations should include:
- What percentage of your receivables are past 30 days?
- What processes are in place for minimizing receivable delays?
- What happens if patients fail to pay? What collections process is in place?
- What percentage of clinic revenues result in bad debt?
My personal opinion is this: I would seriously question being paid on receivables unless you are pursuing a contractor relationship. My belief is that part of the fee split percentage that the clinic is receiving should take care of receivables. As a clinician you have pretty much no control over how receivables are being handled (unless you’re providing some accounting duties at the clinic!). I would encourage you to negotiate being paid on billables. It’s much easier to review at the end of the month and you can have a clearer picture as to your income throughout the month.
You’ll also want to ask about when you get paid. If it is later in the month, some clinics may provide payment advances. This may be helpful especially when you begin your position in a fee-split option.
Compensation: Benefits that Make a Difference
Even though the income you make is important there are other non-monetary benefits that are important as well. I’ve listed a number of the more common benefits that you may come across. It is important to also consider the size of the organization you’re looking at. Small clinics will have likely less flexibility with offering these benefits and may rely more on the intangibles such as workplace culture and flexibility around holidays or time off.
Some clinics will provide an education allowance. Again it is helpful to review our article about contractor vs employee to understand some of the issues around this. In short, you should be an employee to receive an education allowance.
When negotiating your salary it is beneficial to ask about whether you will receive an education allowance. Some clinics will provide a certain amount over a period of a year and can be applied fully against a course. Other clinics will provide education allowance and they will pay up to 50% of a course. You may also be able to get reimbursement for PT related books or home study courses. It is important to note that some employers will require that you pay back a portion of your education allowance if you leave the clinic before a certain time. This would be something worthwhile to clarify during negotiations.
Here are some questions that you should be asking around education allowance:
- What is the process for getting a course reimbursed?
- What percentage of a course can be reimbursed?
- Does my education allowance get renewed on a yearly basis?
Some clinics may require you to provide an in-service on the course you’ve taken. Personally I think this is a great opportunity (even if it’s not required!). Explaining what you’ve learned to your colleagues is a great way to solidify what you have learned in a course. As well, attending in-services by colleagues will give you a better understanding of whether that course would be worthwhile for yourself as well.
This is a big one. Taking holidays is an important part of recharging your mental, physical and emotional batteries and understanding your vacation details is important.
Again, this compensation issue will depend on your status as an employee vs contractor. According to the CRA a contractor is not entitled to vacation. Your status as an employee or contractor will impact how your time off is structured.
Typically employers will provide a maximum amount of time off as an employee. Many employers will follow the employment standards of your province to determine the number of weeks of vacation.
If you’re considering a contractor relationship, your situation will be more individually specific. I’ve heard of some clinics requiring their contractors to find their own locum coverage. Some warning bells should be going off in your head if you’re encountering this type of situation in an employee context.
There are a few questions I’d be asking around holiday/vacations:
- What amount of notice do I need to give before going on holidays?
- How many weeks can I take off consecutively for a holiday?
- What is the pecking order for getting time off in high peak times such as Christmas and / Spring break, etc?
Vacation & Vacation Pay
As an employee you’re entitled to vacation and vacation pay. (If you’re a contractor, you’re out of luck!). Vacation pay can vary by province. In Alberta, you’re entitled to a minimum of two weeks of vacation per year after your first year. Vacation pay which is typically paid out on each paycheque is calculated as 4% of your total wages. It’s important to remember that this is the minimum requirement and it’s possible to negotiate the amount you are paid. The legislation provides the minimum requirement for employers to increase the vacation amount. For example, in Alberta you are entitled to 5% (or equivalent of 3 weeks) after 5 years of employment. To learn more about vacation and vacation pay laws in Alberta check the Government of Alberta website.
As a physiotherapist your hands (and rest of your body) are important in your ability to work. Simply put if you’re injured, you’re more than likely unable to work. Disability insurance can be an important element to your professional requirements just like renewing your college license or malpractice insurance.
Disability insurance premiums can vary based on your age, your overall physical health and other factors. Getting disability insurance as a sole practitioner can be more expensive than being part of a group disability plan provided by an employer.
It’s very likely that a small physiotherapy clinic will be unable to provide disability insurance while larger national clinics may offer group disability insurance coverage.
Here are a few questions to ask around disability insurance:
- Does the clinic provide disability insurance?
- Does the clinic provide any insurance premium support?
PT Licensing / Association Dues
A regular annual cost as a physiotherapist is your annual licensing and liability insurance premiums. There are a few different providers for malpractice insurance; one of the more popular options is through the Canadian Physiotherapy Association (CPA). CPA registration is optional as a physiotherapist in Canada, but there are a number of benefits such as joining various practice divisions.
Some clinics may provide financial assistance to pay for these annual fees.
Here are a few questions to ask:
- Do you provide any reimbursement for my PT licensing fees?
- Do you provide any reimbursement for CPA membership (and its divisions)?
Extended Health Benefits
Unless your spouse has extended health benefits, you will likely be very interested in having them. Extended health plans provide coverage for dental work such as cleanings, cavities, etc as well as a certain amount of annual coverage for ancillary services such as massage, chiro, physiotherapy, vision care etc.
More and more employers in Canada are moving to health spending accounts. These accounts give control to the employee in determining the best use of funds. For example, if you have $1000 in a health spending account you may spend all of that on massage or spend some on new glasses, a little on massage, etc.
I know that some clinics are providing this coverage as well and the amounts can vary significantly. It is also not uncommon to start receiving extended health benefits after a trial period as a new employee. This can typically be 3 months.
It is not uncommon that clinics will provide clinic services at a reduced cost to their employees. Depending on the different services provided at the clinic, this can help offset the costs for extended health services such as massage, acupuncture, etc.
Here are some questions you should be asking:
- What is the trial period before benefits kick in?
- What is the annual amount to be provided? How does this amount differ between full-time vs part-time employees?
- Are physiotherapy clinic services offered at a discount to employees?
If you’re a new grad or internationally trained physiotherapist, you will likely be very interested in the mentoring set-up at a clinic. There are many forms of mentoring that can be offered ranging from one-on-one time with an experienced therapist to group journal clubs.
These mentoring opportunities can vary. From my experience, mentoring can often be offered during an interview experience, but it’s important to talk about the details to ensure follow-through by the employer when you begin working.
For example, you should be asking:
- What mentoring structure is in place?
- How often will mentoring take place and with whom?
- How long will mentoring be available for?
- Is there an additional cost for mentoring (e.g. Orthopaedic Levels mentoring)?
Next Steps: Evaluating Your Options
We’ve covered a lot of different areas of compensation and it’s time to make things practical.
First off, it’s important to understand where compensation fits into the overall job selection process. You’re looking for an opportunity where there is an intersection between all of the following:
- A fit with your skills
- A caseload that allows you to treat the patient population you’re interested in
- An environment that supports your growth and development
- An income level that supports your personal needs.
Compensation is only one component in choosing the right place to work, but an important one. I would encourage you to understand the details of your compensation package before signing any employment contracts. You may want to get legal advice to help review your contract before signing so as to avoid any potential issues down the road.
Compensation, as you can see, is more than just your fee-split percentage. Getting the full picture is important. This will also help when comparing different opportunities. From personal experience things can get quite confusing when looking at different job opportunities. This is because things get muddled after multiple conversations with different employers.
Making a Good Decision
Good decision making requires a few things. First off you need to understand your objectives. Write them down.
Second, you need to list your alternatives and weigh them against different criteria. Ranking your options based on criteria and writing it down will help to bring clarity to your decision. Things get muddled pretty quickly when the options increase in number. You may come across a situation where you have a couple of job opportunities that have their pros and cons and it can feel like a stalemate. When this happens it’s important to rank your criteria. You may have two cons for one job that may outweigh one pro for the other job. It may be necessary to make tradeoffs, but going through this process systematically will only you to make a decision that looks at all the factors. To help make things easier we’ve put together a worksheet for you. This spreadsheet template helps you compare different opportunities easily.
When you’re ready to make a job decision I would recommend getting in writing the compensation elements agreed to with your employer. There’s nothing worse than 6 months into a position having a disagreement about what was discussed and agreed to during your employment negotiations. List out the key areas and having this become part of your employment contract with the clinic.