Four-Part Series with Accountant Julie Herres, Part 3: Compensation Structures In Group Practice | GP 09

Four-Part Series with Accountant Julie Herres, Part 3: Compensation Structures In Group Practice | GP 09

How do you decide on compensation for your employees? What can you do if you are currently paying your clinicians too much? Should you pay a percentage or a flat fee?

In this podcast episode, Alison Pidgeon speaks with Julie Herres about compensation structures in a group practice.

Meet Julie Herres

Julie Herres is the owner of GreenOak Accounting. The firm provides bookkeeping, accounting, payroll, Profit First services to private practice owners throughout the United States.

Julie and her team have worked with hundreds of private practice owners, so they are uniquely positioned to be a trusted advisor to clients.

To get more information on GreenOak Accounting’s services or to schedule a free consultation, visit or connect on LinkedIn and Twitter.

In This Podcast

  • Deciding how to compensate
  • Things to take into account when running the numbers
  • What to do if  you are overcompensating
  • The difference in compensation for contractors vs W2 employees
  • Percentage vs flat fee

Deciding how to compensate

Usually, there is very little planning that has gone into thinking about how much to compensate clinicians. When practice owners get really busy and they decide they will hire another clinician, this move alone doesn’t increase the overhead but most of the time this is what gets them into trouble because they have not looked at things long term. Practice owners may be overcompensating and not making any real money.

In order to not let this happen, you need to run your numbers by seeing what the average fee per session is and see how all the pieces of the practice fit into that.

Things to take into account when running the numbers

  • Payroll tax
  • You need to be making some money on each session that someone else is doing
  • Possibility of adding an admin person later on

What to do if  you are overcompensating

  • With your very next hire, you need to change the pay structure
  • Increase the rate of your sessions
  • If there is no other option and you are going to give someone a pay cut, make sure that you have enough data to back it up

The difference in compensation for contractors vs W2 employees

Contractors will typically be a little more because they are responsible for paying their own tax. Employees will be paid less because as the employer you will be paying a portion of their taxes.

  • Employee pay should generally be 45-55%
  • Contractors pay should generally be 50-60%

Percentage vs flat fee

When you are paying someone a percentage the only way to give them an increase is to give them a bigger percentage. As time goes on you, as the practice owner, you’re bringing in less and less. Therefore a flat fee is better because you’re in control of the raises and when insurance reimbursements go up, you’re not automatically giving someone a raise.

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Meet Alison Pidgeon

Alison Pidgeon | Grow A Group Practice PodcastAlison is a serial entrepreneur with four businesses, one of which is a 15 clinician group practice. She’s also a mom to three boys, wife, coffee drinker and loves to travel. She started her practice in 2015 and, four years later, has two locations. With a specialization in women’s issues, the practices have made a positive impact on the community by offering different types of specialties not being offered anywhere else in the area.

Alison has been working with Practice of the Practice since 2016 and has helped over 70 therapist entrepreneurs start and grow their businesses, through mastermind groups and individual consulting.

Thanks For Listening!

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