What is the Most Common Nurse Practitioner Compensation Model?
What are the most common compensation models for nurse practitioners? I would say there are typically three different types of compensation models, but the most common is just a standard base compensation. So, you’re offered an annual salary and your employment contract will reflect that number. And then you’re just paid biweekly or monthly according to your employment contract. The first one is just a straight base compensation or base salary. Normally, though, even if you are given just a straight base salary, there are sometimes bonuses that you can get on top of that for either quality measures or patient encounters. We see a lot, they just kind of vary, but I would say the majority is just a straight base salary.
I would say it’s a less popular compensation model as it’s normally you always have a base salary as well on the second option. But then typically, there’s some type of incentive for RVUs, which is based on your production and encounters with patients. This is a little bit rare for nurse practitioners because when they’re given RVUs, they sometimes tend to compete with physicians, especially supervising physicians. So, that gets a little complicated if RVUs are in your compensation model simply because normally, RVUs are for physicians. It’s a little rare. And then lastly, depending on maybe if you’re in the ER or an internalist, sometimes you will get paid a daily rate or an hourly rate. But again, that’s rare and it kind of depends on your specialty.
So, overall nurse practitioners are just going to get a straight base compensation. And then normally, there’s some type of incentive on top of that. Also, you’re normally compensated, as I’ve said, many times in this blog, your base salary. You also can be compensated with a signing bonus whenever you sign or start your position with your practice. Those can range greatly depending on the need for providers in the area, but they’re normally around 10,000, and they kind of just go up from there.
That’s another way they can add to your compensation. Now, a signing bonus is normally at the beginning of your employment, it is considered income though. You want to be careful of signing bonuses. There’s normally a provision in your employment agreement that states you would have to pay that back if you left the practice anywhere between one to three years. So again, you want to read that carefully as it may be a red flag. A signing bonus also is normally included in a nurse practitioner’s employment contract. And then lastly, if you’re getting a signing bonus, again, I stated that’s only for the first year. Sometimes you get a retention bonus, so you must complete a full year of employment. And at that time, you would receive a retention bonus, and that’s just a bonus on the anniversary of a year of your employment.
And that’s normally anywhere from 10,000 to 25,000 for a nurse practitioner. Again, you get your base salary, but there are normally some types of bonuses. For sure when you sign, you should get a signing bonus. Also, it’s not really compensation, although sometimes relocation expenses or allowances can be structured like a bonus, which is also considered income as well. If you’re moving to a new area, out of state, across the country the practice may give you a relocation bonus. That’s anywhere from 10,000 to 20,000. And if it’s structured like a bonus, then it is considered income. And so it’s tax accordingly, but that’s only if you’re going to be moving to a new area and then also you have to consider there are other ways that they would structure relocation expenses, so they may have to reimburse the companies directly, or you provide receipts and then they reimburse you directly. Sometimes it’s not considered income. It just kind of depends. So, always read your employment contract or you may be stuck sending in a termination letter.
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