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Compensating a Full-Time Associate

by Dr. Tom Snyder

If you are a sole proprietor and considering a full-time associate for the first time, there are several factors to consider that may have short-term financial consequences.

If your practice is saturated and you have many more patients than you can support, a full-time associate is your answer. The biggest hurdle to face is how to compensate your new associate. Educational debt for recent grads is averaging more than $229,000. Thus, associate salaries in excess of $80,000 per year are not an unrealistic request for many associates, given their financial obligations. Furthermore, we think it is a good idea to offer your new associate a guaranteed salary for at least the first 90-120 days of employment. This is especially true if you expect to pay your associate a commission based on collections.

After the initial guaranteed salary period, the salary usually reverts to a monthly draw with a quarterly reconciliation adjustment. Equally important though, should be your controlling the associate’s clinical schedule at the outset, hence why a guaranteed salary makes sense. This initial period gives you an opportunity to assess your associate’s clinical ability to produce dentistry and how efficiently they are in providing services.

Admittedly, the initial guaranteed salary can be a drain on you financially. However, if your associate is expected to be the initiation of your transition plan, it is well worth undertaking that financial risk. Contrary to some opinions, an associate can generate significant profits once he/she has been properly integrated into the practice. Associate commission rates can vary anywhere between 20-37% of net production or collections based on your area of the country. Thus, there is no “standard” associate commission, as it is typically...

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