Physiotherapist salary v percentage share

[nsturner]

Hello All

I am setting up a new private musculoskeletal clinic in London and will plan to have other physiotherapists working in the clinic.

I am looking into the best way to pay the physiotherapist as I know this can be an area of debate and I really want to get this right so to retain staff and make them happy! I just want to ask this group a few questions:

1. How would you the physio preferred to be paid - salary, percentage share or both a salary + percentage share?

2. How much would you expect to be paid in the private sector if you were more than 5 years qualified in musculoskeletal physio?

3. If you were self employed what would be the percentage share you would want to start on ?

4. If you were self employed what hourly rate would be a good starting point?

5. How often would you expect a pay increase?

6. Would you want to be self employed or employed?

I would be grateful if you answer the above questions. Thanks so much for your time.

Nicky

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[physiobob]

We've debated this topic quite a bit over the recent years. The tax regulations dictate more and more what options are available based on the amount of hours that the individual is working for you. They may first of all have to set up as a limited company if you don't want to pay NI and Tax. So ask an accountants advice on that.

Second is the contract itself. That is more important to consider ahead of a pay rate or percentage.

Lastly I have always paid a base hourly rate that was enough to have someone take the job. I'd then pay a percentage bonus on top depending on how much they generate for the clinic each month. At some times I did this by simply upping the hourly rate if they hit more than a certain amount of treatment hours. This gave them an incentive to keep their patient list growing and coming back.

A simple percentage can make staff become a little lazy, especially if the clinic is busy and they are guaranteed it. I'd look at the locum rates for ideas on the hourly rate to consider, perhaps hitting that as a high if they are really pulling their weight. but begin at the new grad starting rate as an hourly comparison. You'll probably find that the amount as a percentage of what revenue an hourly treatment might generate could be about 30% as an idea. I would not go above 40% if you want to stay in business but as a guide maybe 30-35%.

Anyway that's some of my thoughts on options.

[nsturner]

Hi
Thanks for your message. If you don't mind i have a few more questions..
How long do you tend retain staff if you pay them on an hourly rate?
Regarding the tax issue, do you ask the physios you take on board to become a company? I take it if you pay an hourly rate the physio is self employed and your contract between you and the physio is a consultancy agreement?
Thanks so much!

[physiobob]

I tend to ask the physio's to form a limited company when they work for me. Some other therapists such as pilates teachers may be self employed (but then they work under 15hrs a week). The company physio's will invoice each month based on the hourly rate that matched what they achieved in that past month (i.e. I pay them at the end of the month for the past months work). This way is of course not as secure for staff retention but appeals more to more senior physio's.

Depends really on your cash reserves and how well your clinic is going. It is always cheaper to give someone an employee contract and lock them into you entirely. But then in the beginning you're paying them for doing less work. But as the rate would be less this can offset that. Employees though have more legal support if you want to fire them so sometimes you wish they weren't an employee. In essence the advice would be different depending on the current state of the practice and the business (number of patients a week) it is seeing.

[quitefrankey]

This is an interesting topic for me too. After 12 years as an employee on a regular & reliable salary I decided to venture into self-employment. For 4 years I was partly self-employed (12 hours) on a percentage pay in one clinic, & remained part-time employed in another clinic. As of 2 months ago I have switched to being fully self-employed in the one clinic. I did not have the courage to be fully self-employed in my earlier post-qualification years due to the variability of pay & need to meet financial commitments on a monthly basis. My financial courage has grown over the years & obviously the level of perceived risk will vary between individuals & their circumstances. In this financial climate having self-employed status can have serious consequences for securing a mortgage, which may be a major factor for anyone deciding between an employed versus self-employed arrangement.

I personally find a higher degree of motivation for percentage pay, and I take minimal leave with the knowledge that any leave taken affects my income. Obviously one has to do more financial forecasting & planning to balance out the shorter or quieter months with the busy ones when self-employed. But overall I am preferring the self-employed status for the pure fact that I can earn the equivalent of a decent salary in fewer hours. The decision for any individual whether to be employed or self-employed is likely to be based on financial gain versus perceived risk.

One potential problem of percentage pay, in my opinion, is the issue of transferring patients to colleagues due to periods of leave or lack of suitable appointment availbility. There needs to be an agreement & a good level of trust & communication between self-employed colleagues so that when patients are transferred between different physios it is clearly defined whether it is for one appointment only or for the remainder of that patients treatment. A lack of trust & communication can lead to conflict between colleagues & disharmony in the clinic.

In answer to the original questions - my figures are based on a clinic in the Thames Valley so specifics will undoubtedly vary according to region. As an experienced physio (17 years) I would expect a full-time employed salary of around £40,000 which equates to about £22p/h & a self-employed percentage of between 45-50%. I feel pay reviews should be performed annually, & probably need to be linked to a performance review if bonuses are involved. Just one other point on pay - with increasing numbers of NHS contracts & other providers paying less than full fee there is an opportunity to employ physios with fewer years experience for these patients with an accordingly lower rate of pay.

I am soon to be consulting an accountant - something I should have done before - so will be interested to find whether I am advised to become a limited company. In the meantime I would be interested if anyone is able to answer this question based on the comment by PhysioBob - is there a maximum numbers of hours that a physio can work on a self-employed 'associate' basis for one clinic, & if so what is that maximum?

A final message to nsturner - I wish you the best of luck in setting up your clinic & finding suitable physios to work for you & I hope my input is useful.

[nsturner]

Hi there thanks for your input especially around the pay side and the employed v self employed. Personally i find % much better than a fixed salary. However i hadn't thought of the employed element and getting a mortgage.
Thanks again.