Physician Signing Bonuses: What to Expect

What could be better than an extra financial incentive for taking that shiny new job after years of training and relatively little pay for your blood, sweat, and tears? Honestly, not much.

The average salary for residents in 2020 is $63,4001 and fellows earn a bit more. Imagine getting offered half that as a bonus just to accept your first job as an attending... It could easily be your reality! The average physician signing bonus for the academic year 2018-2019 was $32,6922. In some cases that number could be much higher (or lower).

As with anything else, you want to think through any offer and its implications thoroughly. These bonuses can vary greatly in both size and structure. I’ll address some of the things to be aware of here.

Why are they given?

Health systems and hospitals are in need of high quality doctors and sometimes have to get creative in order to attract them, especially those that may be in more rural locations. In addition to catching your attention, they want to hold on to talent as well (more on this in a moment).

When are they paid?

Bonuses are paid out in different ways. In some cases it may come in a single lump sum check, or the payment could be spread incrementally throughout the duration of a set contract. A bonus might be paid upon accepting an employment offer, or not until your first day on the job.

Bonuses will likely have some strings attached, which is why you really want to understand any offer completely. Again, employers are eager to retain good doctors in addition to simply getting them to sign on. In order to keep you on board, the bonus may be tied to you working for a specific period of time. In this scenario, if you were to receive the bonus as a lump sum payment up front and then end up having to terminate your contract early, the employer could require repayment of the “unearned” portion of the bonus as a loan. On the other hand, if it were being paid incrementally each month, then you would forfeit any unpaid bonus amounts upon separation.

Taxes

Bonuses are taxable, but know this – employers have some flexibility here as well and they might not withhold the taxes for you. It will be important to understand how this additional payment affects your tax planning in the year it’s paid.

You can negotiate

It’s ok to advocate for yourself! Try to do some research on what a reasonable bonus is based on the location and your experience. You might have the opportunity to work out both the amount and structure of an offer.

What to do with them?

Have a plan before you receive the funds! This can be a great opportunity to put a large dent in student loans or other debts. If you’re fortunate enough to be debt-free, look next to your emergency fund and top it off if need be. Beyond that, prioritize any other pressing financial goals you may have and allocate the funds before they ever hit your bank account.

Final Thoughts

Above all else, know that signing bonuses come with all sorts of nuances. Take your time to think it over and even pull in a professional to help review any contracts presented to you.

Finally, don’t let an enticing bonus be the only reason you consider working somewhere. The regular pay and other employee benefits will have a big impact on your overall job satisfaction, not to mention geographic location, coworkers, etc. Consider what will truly be best for you and your family over the long-term.

Edward F. Jurgielewicz III

President

SMRU #1875139

1thedo.osteopathic.org .

2www.ama-assn.org.