Should a Dentist be Reimbursed for Moving Expenses?: Dentists Moving Expenses
Should a dentist receive relocation expenses and reimbursement? The short answer is yes. Industry standards normally dictate that this is common in employment agreements for dentists. However, it does depend on where you’re moving from. Is this a short distance or are you moving out of state or across the country? Normally, you must be moving a pretty far distance to the practice in order for them to offer this to you. They’re also structured in a couple of different ways. I would say the most common way it’s structured in a dental employment agreement is it’s normally listed as a relocation allowance within the offered professional benefits. It’s just a flat amount. I’ve seen it range anywhere from 5,000 to 10,000 and what will happen is upon signing the agreement, normally, they will give you that allowance.
Dentist Moving Reimbursement Tax Implications
And it’s just given to you in that flat amount. Now, when that happens, it is normally taxed as income. So, you don’t receive the full 5,000 to 10,000. That’s something to consider upon signing. And then sometimes you must give receipts back to the practice showing that you used it for relocation expenses. Other times, that requirement is absent from the agreement. The second way that it’s typically structured is that the practice will directly pay the companies for moving expenses. You will let the practice know what sort of moving company you’re going to use. And then they will reach out and pay them directly. There could be a cap on that amount. And again, it’s normally anywhere between 5,000 to 10,000 in dental contracts. The thing you want to look out for whenever you receive a relocation allowance or reimbursement is there’s normally a payback provision or amount of time that you have to work for the practice, in order to get that amount forgiven.
Normally, it’s anywhere from one to three years; three years is a little long. And normally, we try to advocate for our clients to have one to two years. You will work for the dental practice for one to two years, and then that amount that they gave you at the beginning for your relocation expenses will be forgiven. You want to read your agreement very carefully. Sometimes, these sorts of provisions are very strict and if you terminate the agreement for any reason within that specific period, you have to pay back the entire bonus or allowance.
And the problem with this is when you receive the bonus, taxes will be taken out of it if it’s considered income. But you’re going to pay back the full amount. So again, you want to be careful. A better and very common way that it’s structured is it’s prorated for how long you’ve worked there. Let’s just say that the forgiveness period is two years, and you work for one year at the practice and decide to leave. Therefore, you’d only have to pay back 50% of those relocation allowances or reimbursements. So, always want to read your employment agreement first. See how those relocation expenses are structured. It is common to be offered one if you’re moving to the practice from a long distance. Time off is another consideration when determining whether a contract offers standard benefits for a dental professional.
Bonus Repayment
Does a dentist have to repay back bonuses if they leave early? This really depends on the employment agreement that you’ve signed as each one is unique itself. However, I would say generally anytime a bonus is offered to a dentist in an employment agreement, there is always some type of forgiveness period. And it’s normally between one to two years. If you terminate the employment agreement within that period, it’s likely that you would have to pay back any bonuses you receive. There are normally two types of bonuses that we’re talking about here. The first one is a relocation bonus or relocation allowance. This can be anywhere from $5,000 to $10,000, depending on where you’re moving from.
And this bonus is used for moving expenses just to get there, and get your household settled before you start with the practice. And then the second bonus typically offered in a dental employment agreement is a signing bonus, and that can normally be anywhere from $10,000 to $20,000. You sign the contract and sometimes you are given those funds upon signing. Other times, you’re given half at the time of signing and then half at the time that you commence your employment with the practice. Those are normally the two types of bonuses that we’re talking about here when we mean paying them back. The paybacks are normally structured in one of two variations. The first one is just simply if you terminate the contract within a specific period, you have to pay back the full amount.
Financial Considerations in Terminating a Dental Employment Contract
Now, this is something you should really consider when signing, especially if it’s considered a bonus that is income, and you are taxed on that amount. So, you rarely receive the full amount that’s listed, because part of it has been taken out for taxes. However, when most contracts say that you have to pay back the entire amount, they’re not accounting for the taxes that have already been removed from that account. You could be paying back more than you received. So, that’s something you really want to consider upon signing your employment agreement. The second way it’s structured is prorated. It means for how long you’ve been there; you are forgiven that amount. Let me give you an example. If the forgiveness period for the bonus is two years and you terminate your contract or employment agreement after one year and it’s prorated, then you only have to pay back 50% of that amount.
Bonuses are very attractive whenever you receive an offer, and it’s exciting. They’re a large amount of money. You’re getting them paid upon signing or upon starting employment. But you really want to consider and read your employment agreement very carefully, because you don’t have a crystal ball, and you don’t know what’s going to happen in the future. So, if you get somewhere and you feel like it’s not a good fit and you want to leave for personal reasons or family reasons, you need to terminate your agreement, there could be serious financial repercussions to accepting those bonuses. So again, always read your employment agreement. If you’re offered a bonus, double check because there’s likely some type of forgiveness period or payback provision, and you just want to make sure you fully understand that before you sign the document.
Expenses Paid
Should an employer pay for in relation to business expenses for the dentist? This can vary greatly. It kind of depends on the makeup of the practice. If it’s a smaller practice, sometimes the employer will pay for less business expenses. A corporation, not all the time, but sometimes will pay for more. It kind of just depends on what the makeup is. Sometimes, the business expenses are standardized. All dentists that are employed there get the same. Other times, this is something that can be negotiated. Let’s kind of go over the list of the main business expenses that the employer will pay for. I would say probably the most common one is continuing education. Every dentist needs to continue their education to keep up their certification and license.
An employer will typically give you an annual allowance. I would say industry standards are anywhere between 2,000 to 5,000. They will say, we’ll give you $2,000 to $5,000 a year, you can use this towards continuing your education. Sometimes, this will include conferences which would include travel expenses. Sometimes, it has to be approved directly by them, but normally, it’s just an allowance. They give you a specified amount of money annually, and you can use that because you need it to continue your education to keep up with your licensing requirements. It’s also known and stated sometimes in contracts as CEs or continuing education. You might also get CE days paid time off to attend those conferences that that allowance is providing for. Sometimes though, dental contracts have unpaid time off. If you have unpaid time off, it’s not likely that this is something that would be provided to you. However, if you are granted PTO time, it is likely that you would be granted specific days to attend those CEs. That’s the most common one, continuing education, because everybody has to do it, otherwise, you will not be able to keep your license. So, it’s very important. The second one I’m going to talk about is your licensing fees with your state board. This is very common that it is provided for or reimbursed.
It’s typically structured in two different ways. They might give you a different allowance for licensing in dues, or they just say, go ahead and apply for your license, pay for it. We will reimburse you. It depends on the agreement. So, you have read your agreement to know which way it’s structured. But your licensing fees, if you’re moving to a new state and you need an initial license, that would likely be covered. If you need a renewal, again, that would likely be covered, but you want to make sure in your agreement. The next one is a DEA license. If you are prescribing controlled substances within your practice, which dentists may or may not, it depends, you’ll need a DEA license. Those are expensive, and they just keep going up. That is another expense that you would want your employer to cover.
And you would also want them to cover the renewals. And then lastly, any sort of professional organization because again, that’s important. You can get continuing education through that. It’s good for networking and keeping up your skills. That’s also something that would be covered. Another one in dental contracts would be malpractice insurance. Either the practice themselves will add you to their policy and pay for your premiums, or they will reimburse you. And then the last two are kind of unique, but I do see them on some contracts. Cell phone expenses. They may reimburse you or provide you with a cell phone for communication, and then travel. If you’re going to multiple locations, they may reimburse you for mileage or even provide you with a vehicle, but that’s kind of rare. It’s mainly that they would just reimburse you for mileage and travel expenses.
So, those are the typical ones. I would say that dental agreements greatly vary because the practices and their makeups really vary. You could see all of these on an agreement; you could see none of them, which I would try if I were you to negotiate for some of them, because these are things that can really add up. You want to advocate for yourself to get these costs or reimbursements included in your employment agreements.
Continuing Education
How much should a dentist get for continuing education from their employer on an annual basis? If you are an employee of a practice, they’re going to offer you, or at least they should offer you a bunch of benefits. And that will include health, vision, dental, retirement, disability, life, and then they’re going to pay for your licensing dues, DEA, registration and then they’ll also, or at least they should offer reimbursement amount for your continuing education costs that you have each year. I would say a normal amount for a dentist would be somewhere between $2,000 to $3,000 a year. The employer would either reimburse you or just straight up pay for the cost associated with that.
And so, what things can you pay for? Well, if you must travel to the conference, the travel costs, so airfare, car rental, the price of admission to the conference, lodging, some will pay for meals as well. That is a normal amount. Now, I find many dental practices, especially the corporate-owned practices, really try to lowball the dentist on the amount that they’re going to pay for continuing education. I mean, I see like 500 to 1,000 sometimes. That is not what I would consider reasonable, and you should certainly ask for more prior to signing your employment agreement. When you are offered an employment contract, you need to kind of look at it in totality; is the compensation good? Is the non-compete reasonable? How long is the contract? How can I get out of it?
And then also, what are some of the benefits that they’re offering? Although 2,000 or 3000 a year is going to break the bank, it’s still something that the average employer would pay for. And in that scenario, if you were entertaining a job or they didn’t offer any kind of reimbursement for that, well, not only is that kind of not industry standard, but then you also have to think, alright, what type of employer is this? I find that the employers that cut corners as far as compensating the dentist or offering ancillary benefits are maybe not the greatest employers to work for. I mean, it doesn’t necessarily mean that the owner of the practice is cheap, but if 90 percent of your colleagues are getting at least 2000 for continuing education on an annual basis, and your employer says, we’re not going to pay for anything, well, that might indicate that they’re either semi-difficult to work with or trying to completely skew the employment contract towards the employer, or potentially cheap.
If they want to cut corners with that, what else are they going to cut corners with? It could be other things as well. Now, if you want to negotiate this amount, you just have to ask for it. Normally, what would happen if you’d get an employment contract, you’d look it over, and then you’d make a list of things that you wanted to be amended. Then you’d provide that list of the employer and then specifically ask for, I would like X amount for continuing education. And then, there could be some negotiating back and forth. Any dentist has to kind of make a priority list of things that are important to them.
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If the non-compete, if maybe the compensation percentage if you’re on productivity, under a net collections contract, if those things are more important to you, then you may need to weigh, alright, is it worth asking for 2000 for continuing education if I want a $20,000 signing bonus or whatever. There is a point and it’s not black and white, but there is a point in a contract negotiation where you can just ask for too many things. And it looks like you are either kind of greedy or trying to get one over on the employer. Just from doing this for decades, I can kind of intrinsically understand where that point is. But if you just ask for a bunch of unreasonable things, it could go the opposite way and the employer could think, you know what? I don’t know if this is an employee I want to work with, they’re just asking for so many different things.
And they’re being very unreasonable and that might be a bad sign for working with the dentist in the future. It kind of goes both ways. So, that’s how much continuing education costs, or at least the average amount a dentist would receive per year from an employer.
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