tions, with a daily minimum to get started. Since fee schedules will vary based on the cost of living in different areas, you don’t need to acquire data to determine pay. Compensation with associates can vary in corporate offices versus private offices; however, this is a function of how much dentistry is being done rather than a difference in the rate. Be certain you have enough work to keep an associate happy! The three components of associate pay you need to consider are pay rate, benefits and guaranteed minimum.
“You need to be more creative with finding employees, and even more competitive when it comes to having a job that potential employees will fight for.”
Next, I recommend asking each staff member during an annual review what their preferred method of receiving additional compensation would be. Some benefits, such as retirement, can be increased for individual staff members based on their needs. Find out what benefits they get elsewhere, such as through their spouse’s employer, and what would truly benefit them. Afterall, the purpose of a benefit is in the name — your benefits plan should be tailored to what will benefit your employees the most. The only way to truly understand where you are coming short is to ask.
How to Determine Appropriate Associate Compensation Associate compensation is quite a bit easier to calculate. Associates should be paid based on a percentage of net production or collec-
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1. Pay rate: Pay rates for general dentists will vary between 30% and 35% of net production or collections. I recommend owners pay associates based on net production, since it is the owner’s job to collect the money and the associate’s job to produce the dentistry. I have seen cases where associates do work they know they won’t be paid for, so many owners will choose to pay based on a percentage of collections instead. Either way will work great for a private practice. When deciding on a pay rate, it is important to know your market and how your compensation offer compares in both percentage terms and total dollar compensation. If you are a fee-for-service office that has an overflow of patients in a high-demand area, you should aim for 30%. The availability of production combined with no insurance write-offs will net the associate much higher pay at 30% than the associate would make at an insurance-based practice with a 35% pay rate. For example, if an associate produces $1 million, at 30% they would collect $300,000 in a fee-for-service office. If the same production was discounted 30% due to in-network fee schedules, the associate would collect on $700,000 of net production, which, even if paid out at a higher pay rate of 35%, would only be $245,000. Not all dentists understand this, so be certain to drive this point home when speaking with candidates. If you are practicing in a competitive area and battling insurance write-offs, you may need to offer 35% to be competitive. Some practices will choose to net out a portion of the lab bill in the calculation. I prefer to stay away from this practice for simplicity of the calculation with a couple of exceptions. Aligner treatment should be negotiated separately on how much the dentist will take home due to the high lab bills. Some practices will do a flat dollar amount, while others will pay a lower percentage. The same applies to practices that are doing large implant cases. Since the cost of marketing to obtain these cases is much higher, oftentimes the percentage paid will be lower. In both aligners and large implant cases, it is common to pay the associate dentist 25% instead of 30% to 35%. This does not apply to practices that do occasional implant work, but rather strictly to implant-based practices. 2. Benefits: Benefits were not even a consideration for associates in the not-so-distant past. Looking forward, benefits may become an expectation. Over half (53%) of associate dentists