Does a nurse practitioner have to pay back their bonuses if they terminate their contract early? The answer to this is normally 99% of the time, yes, you will have to pay back either a portion or all your bonuses as listed in your professional benefits package. Let’s first talk about what kind of bonuses there are. Typically, there is some type of sign-on bonus. It can be called a signing bonus, or a sign-on bonus. Sometimes it’s relocation expenses, but it’s given to you a lump sum at the time that you either sign your employment agreement or at the time that you commence, which means start your employment, so like your first day. Those are the bonuses that are offered to you. Now, the reason why you get these bonuses is to attract you to become employed with the employer and provide your services.
So, it’s great. It’s exciting. And normally, there are significant amounts of money anywhere from 10,000 and up, but the thing you need to know, and you need to read very carefully, there is always some type of strings attached to this sign-on bonus because it also helps your employer retain you to keep you there. There’s normally some type of payback provision, and it normally states anywhere between one to three years, you must have continuous employment with the facility. Otherwise, you have to pay back either the entire bonus or the bonus at a prorated amount. So, for however many months you’ve been employed, that portion will be forgiven off that bonus. Some things you want to really consider before you sign your employment contract are if you receive this money at the beginning of your employment as a bonus, it is considered income and therefore it’s taxed as income.
Let’s just say, they’re offering you a $10,000 signing bonus, you sign, you receive the money. You won’t receive the full 10,000 because taxes will be taken off the top as they do normally with income. However, let’s say you want to leave within a year and your contract agreement states that you must pay back your entire signing bonus. They mean the full 10,000. They don’t mean the amount minus any taxes that you’ve paid. So, this is something that you really want to consider. I always recommend either limiting the amount of time like down to a year before the amount is forgiven or asking it to be prorated as I talked about before that every month a portion of the bonus is forgiven. Sometimes you have to sign something called a promissory note. It’s almost structured like a loan. They’re going to loan you this amount of money. Other blogs of interest include:
- Should a Nurse Practitioner be Reimbursed for Moving Expenses?
- What Benefits Should be in a Nurse Practitioner Offer Letter?
And if you leave before and you have signed that promissory note, they can come after you for that money. And normally, on the promissory notes, there’s some type of interest. So, if you don’t pay back within 30 days of your termination, they can tack on anywhere from 12 to 15%. Again, these sign-on bonuses are attractive, but you want to make sure that you read your employment agreement very carefully to know how long you have to be employed with the practice before this amount is forgiven.
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