A physician signing bonus can certainly put some extra money in your pocket.
($37,473 extra, in fact.)
So, it makes sense that you’ve come looking for information on how to
In some cases, you may be offered a bonus upfront. In other cases, you may need to ask for one.
Wondering how to ask for a signing bonus as a physician?
Keep reading for all the info you need, plus some tips on how to negotiate your bonus offer.
Table of Contents
What Is a Physician Signing Bonus?
A signing bonus, also known as a recruiting incentive, is exactly what it sounds like: extra money you receive when you start working for a new hospital, healthcare system, or private practice.
They’re just like the signing bonuses that professional athletes receive when they’re recruited to a new team, only on a much smaller scale.
Depending on the need for your specialty and the supply and demand of physicians in your region, a signing bonus can be attached to any physician employment agreement.
How Much Is a Physician Signing Bonus?
The average signing bonus is $37,473, although there are many factors that can impact a bonus size.
For example, location plays a large role in typical bonus size. Small towns and rural areas sometimes offer higher signing bonuses to incentivize candidate relocation. Bigger cities often offer small bonuses due to smaller demand.
When Do Physicians Receive Their Signing Bonus?
It depends on the contract.
You won’t always get a big fat check the day you sign your employment agreement; it may be paid out over several months or after a certain period of time (e.g., after one or two years of employment).
You can negotiate this aspect of your contract. Read this article to learn about the other negotiable aspects of your contract.
How Do Physician Signing Bonuses Work?
This also depends on the contract; signing bonuses work differently in different organizations.
In most cases, bonuses are structured as a type of “loan” that must be paid back if the physician terminates their contract before a certain date. You’re only entitled to keep the total bonus amount if you stay with the organization for the duration of the agreement.
How to Ask for (and Negotiate) a Signing Bonus
If your potential employer doesn’t offer you a signing bonus, don’t worry; you can ask for one.
Here’s a quick list of tips (we’ll expand on each one below):
- Know your value
- Understand your leverage
- Initiate the conversation
- Don’t sacrifice salary
- Consider hiring a negotiation specialist
Here’s a brief explanation of each tip:
Know Your Value
Before you agree to a bonus or ask for one, it’s important to know your market value. Trusted sources like Sullivan Cotter and Merritt Hawkins can provide the data you need to justify your bonus request.
Armed with the right information, you can negotiate to increase your sign-on package by tens of thousands of dollars.
Understand Your Leverage
Use your skills and experience to your advantage; your potential employer offered you a contract because they see your value.
Don’t be afraid to mention to a hiring manager that you’re meeting with and/or considering job offers from several other hospitals or health systems. You can also use data, like your past wRVUs, to make your case.
Initiate the Conversation
If a signing bonus isn’t mentioned in your offer, raise the subject and start the conversation. You can’t receive one if they don’t ask; the worst they can do is say no.
Don’t Sacrifice Salary
A large bonus may be tempting, but don’t opt for a smaller salary in exchange for a bigger bonus. You’ll receive your bonus once, but you’ll receive your salary every year (and it will increase over time).
That large lump sum may make it easier to pay off your medical school debt or make a down payment on a mortgage, but it likely won’t be worth the sacrifice in the long run.
Hire a Contract Review Specialist
A contract attorney can review the terms of your offer and assist you with negotiations to ensure you get the best deal. They’ll identify anything missing from your contract, including details regarding signing bonuses.
It’s possible that your contract attorney has worked with your potential employer before and has inside information that could benefit you. Having a set of expert eyes review your offer is the best way to ensure that your physician benefits package is what it should be.
Learn about our contract review services!
What to Do If Your Request Gets Denied
Don’t be discouraged if your request for a sign-on bonus is denied. A bonus just might not be in their budget.
And if that employer has a large pool of skilled physicians to choose from, they may not feel the need to offer you one.
Should You Still Take the Job if You Aren’t Offered a Signing Bonus?
Signing bonuses are just one part of your overall compensation package. You need to weigh all of the components of your salary and benefits package before accepting or rejecting a job offer.
Consider your annual salary and any annual bonuses you’ll be eligible to receive based on performance or productivity. Factor in your benefits package and if your employer offers incentives, like medical student loan repayment assistance and stock options.
Are they offering you malpractice insurance? Are there any performance-based incentives?
Consider all of these elements combined. It could be worth it to take a small bonus or none at all.
Important: Signing Bonuses Are Considered Taxable Income
A $40,000 signing bonus may seem like a bit of windfall, but you won’t actually see all of that money. Like all forms of income, signing bonuses are taxable. You will have to pay taxes, regardless of how big or small the bonus may be.
In some cases, you may receive your bonus in your regular paycheck. If you do, the taxes might already be withheld.
If you receive your bonus in full in a separate check, you can assume that taxes have not been withheld. You will need to set aside the amount you will owe in taxes and pay it at the end of the year.
Depending on your employer, you may receive your bonus in one lump sum or in installments throughout the duration of your contract.
Related: Our Physician’s Guide to Tax Planning
Signing bonuses can put a nice chunk of extra change into your pocket. But asking for one can be tricky.
Consider your geographic location. Know the supply and demand for physicians in your medical specialty. Research what bonuses your peers in similar positions receive.
Leverage your experience and value to get the best deal. Be willing to negotiate. Consider your overall compensation package (especially if the offer includes a better salary over time than competing offers with higher signing bonuses).
And always hire a contract review specialist to make sure that you’re getting the right deal.
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