Physician First Job Signing Bonus (Is $10,000 BRUTAL?)

Physician First Job Signing Bonus

Should you receive a signing bonus with your first employer after training?

So, the first question is, does everyone, meaning every employer, pay a signing bonus for anyone just coming out of training? The short answer is that not everyone, but 90% of any position, should pay a signing bonus. It would only be possible if they offered a bonus.

The amount of that bonus, how the employer pays it, and whether there’s some repayment obligation if you leave early vary significantly based on several things. One, the specialty you’re in. Two, where the job is, and we’ll go into that in a second. And how long is the term of the initial contract?

When Could a Signing Bonus Be Negotiated?

When would you negotiate the signing bonus? What will happen is that some employers will present a letter of intent first, which details the big-ticket items in any employment contract. Once you agree, they’ll follow up with an employment agreement detailing everything.

I suggest negotiating the signing bonus upfront before you sign the letter of intent. Just because you sign a letter of intent doesn’t mean you’re stuck with that number.

I can tell you that employers don’t appreciate it when they reach an agreement on big-ticket terms, compensation, signing bonuses, non-compete, tail repayment obligations, etc. Then the physician comes back after they’ve seen the employment agreement and wants to make significant changes. So, you need to negotiate the amount up front.

If somebody offers you an amount you’re unhappy with, what’s the best way of dealing with that? Let’s say you’re being offered a $20,000 signing bonus and would like 40,000. Well, generally, you don’t just ask for 40,000. You would ask for a little bit more. Tend not to play that game or ask for an enormous amount and then bargain your way down. It looks unprofessional.

Whatever the amount you have in mind, a bit above that would make sense, and then negotiate down.


When you should pay, it is also essential, especially for people coming out of training, for a couple of reasons. Most jobs will pay the signing bonus with the first paycheck when you commence providing services. When you’re out of training, you don’t have much money. You need to make more money during training. And so, having 20 or 30,000, or potentially significantly more, before moving to a new city or job can help defray the cost. You can refer to American Medical Association’s guidelines for more details.

The employer may pay for your moving expenses, and a signing bonus, but still having that amount can help with security deposits if you rent or even go towards a down payment for a house. So, when you receive it, you can also negotiate the price. Ask them to provide the amount upon signing the document.

Signing the Contract

You’re not just going to sign the document on the first day you show up at the job; you’ll sign it well in advance. And so, receiving that amount upon execution of the document gives you more money upfront and flexibility.

Some people may break it up into different payments. For instance, you might get paid half upon commencement and half after a year with the job. I wouldn’t accept that either. It shouldn’t be broken up over time if they give you a signing bonus. You should get the entire amount. Keep them from offering multiple payments for one signing bonus. It should be, this is the signing bonus, and I should get it upon signing the actual contract.

Every signing bonus is also going to have repayment obligations. If you leave before a certain period, you may have to pay back a portion of the signing bonus. Most of the time, it’s tied to the initial term of your contract. Refer to the Physician Advocacy Institute’s resources for more insights.”


Initial Term of the Contract

The initial term means how long the contract lasts. Most physician contracts will have a duration of between one and three years. I’ve seen as many as five, but one to three is average. The employer will usually say, “Okay, if you leave before the end of the first year, you must pay back the entire signing bonus amount. Then, if you go between the first and second year, you’d have to pay back 50%. And if you have to leave between the second and third year, you have to pay back 25% or a third.”

We can break it up into a whole bunch of different ways. It’s going to be either annual, quarterly, or monthly forgiveness. And you want a shorter amount of forgiveness. Let’s say you have a three-year initial term. They say you must stay for three years and then you won’t have to pay anything back. It behooves you to have monthly forgiveness.

Physician Repayment Obligations

That’s better than yearly forgiveness because if it’s annual forgiveness, you must stay for the entire year. You could leave in the 11th month, have worked for nearly the whole year, but then have to pay back the total prorated amount. If it’s a monthly repayment, it’ll go up until the month you leave.

Let’s say it’s yearly forgiveness over three years. So, it’s one-third, one-third, one-third. If you left in the 11th month of the third year, you’d still have to pay back a third. Whereas if it were monthly forgiveness, you’d only have to pay 1/36 back if you left in the 11th month. Trying to get the prorated repayment interval as small as possible makes sense.

Now, what is a fair amount for a signing bonus? As I said before, this varies based on geography and specialty.

Geography and Specialty Affects Signing Bonus

You will usually be able to get a bigger signing bonus if you are working in an area that’s difficult to recruit to. Suppose you’ll work in a rural community with a tough time bringing in physicians; even more remarkable, it could be a rural community with a tough time bringing in physicians in your specialty

In that case, you could get a significantly higher signing bonus than you could if you’re working in a big city where thousands of other physicians are in your specialty.

Maybe it’s a desirable location, so there’s more competition for those jobs. It’s just economics that you won’t have as much negotiating power if you’re in a place where many other physicians want to work, like San Diego and Phoenix, where people love to live. According to Zillow, these are popular destinations. Regarding gauging whether it’s fair, ask colleagues coming out of training with you. So, people in your program.

Inquiring Other Physicians

Everyone is looking for a job simultaneously; only some will look in the same place. It’s doubtful you’ll stay in the same hospital where you’re doing training. Thus, you’ll have a sample of businesses from all over the country.

So, ask your colleagues and mentors who have come out of training what they received. That’s the best way of gauging where to go. But as I said before, it can vary significantly based on where you’re looking. Some states will subsidize very rural states that will assist in financing either with a massive student loan repayment, which you can consider a signing bonus, or a signing bonus and student loan repayment.

To pay off everything quickly, you should investigate a rural community. I don’t know if “cleanup” is the right word, but you could have a signing bonus and student loan repayment, maybe six times what you would get if you were moving into a bigger city.

So, that’s a little breakdown of a physician’s first signing bonus.

Do Physicians Get Signing Bonuses?

Do physicians get signing bonuses? 

The answer is yes. And we’ll get into who gives signing bonuses. What’s the average value of a signing bonus, and then do you ever have to pay it back

First, who gets signing bonuses? Physicians could get a signing bonus if they come out of training or switch jobs. Does everyone give a signing bonus? No.

Most places will at least give relocation assistance, usually between 5,000 to 15,000. Many will pay it directly to the moving company, but that’s not the same as a signing bonus. Some places will combine it to call it a commencement bonus. Then, it’s up to the physician how they want to use it. They could use it for relocation assistance or a down payment for whatever they want. But let’s talk purely about signing bonuses right now. 

How does it work? Well, now it is specialty-dependent. Typically, signing bonuses are somewhere between 10,000 to 50,000. When making the payment is necessary, some employers will pay it upon signing the agreement. Most employers won’t pay until the first pay period after the physician starts practicing with that employer.

Term Length Affects Signing Bonuses

If the physician leaves within a certain period, usually the initial term of an agreement, how long it lasts, will be somewhere between one to three years. Many employers will tie whether physicians must pay the signing bonus back to that initial term. Then they’ll have forgiveness associated with it. 

So, I’ll use a couple of examples. Let’s say a physician joins the practice and its three-year initial term. The employer could say that 1, 30, and 60 of that signing bonus forgives for every month you’re here. So, you stay for those three years. You don’t have to pay anything back. Others can do it quarterly; some will do it yearly. And then maybe it’s only a year; it could be two, but you would rarely get a signing bonus.

Then if you left in the first year, you wouldn’t have to pay anything back. That’s something to think about when doctors are accepting a job. How much am I getting upfront? What will I have to pay back if I decide to leave the job before the initial term ends? 

In addition to assigning bonuses, some places under 10% could offer student loan forgiveness. That’s another thing to investigate. A physician-owned practice would be infrequent to provide student loan assistance. It would have to be at the hospital or healthcare network. The vast majority would be through a hospital or healthcare network willing to offer student loan assistance.


Student Loans Repayment

And in that case, there’s usually no repayment obligation. The employer would say, we’ll give you a hundred thousand for student loan forgiveness. Then, we’ll pay a certain amount of that a hundred thousand over three or five years, whatever it is. And then they’ll deliver it at the end of the month, and that’s the forgiveness. The physician would never have to pay anything back. It certainly is worth negotiating a signing bonus. It needs to be reasonable. 

The worst thing a physician can do is ask for something completely unreasonable. It makes them look like they have no idea what’s going on or are greedy. That’s kind of like threading the needle.

It is an average amount to ask for or needs to be slightly over what they’re offering. So, do physicians get signing bonuses? Absolutely. The amount depends on the situation. Almost any physician should get at least some signing bonus when coming out, trading, or moving.

Negotiating a Physician Signing Bonus

I’m going to talk about negotiating a signing bonus for a physician. In signing a reward, there are some things to remember and some industry averages for a signing bonus. First, when a physician is either coming out of training or switching jobs, it’s industry standard for a signing bonus associated with the new employment contract. It’s also dependent upon whether the physician agrees with a hospital or healthcare network. Or if they’re joining a physician-owned practice.

Let’s take each one of those in order. First, let’s say you’re a resident or fellow coming out of training and will join a small physician-owned practice. That is probably the level you’ll get the little signing bonus. Usually, in that scenario, I would say somewhere between 10,000 to 30,000 is standard. It is also specialty-dependent. The more specialized a physician is, the more leverage they have in negotiating. 

And therefore, they can get a higher physician signing bonus. Suppose you are a physician from training or joining a hospital or healthcare network. Their signing bonus is usually slightly higher than if you enter a physician-owned practice.

So, what do you do to negotiate? 

Well, I would ask the people you’ve trained with, what are some other bonuses you’re receiving? Because those people in your specialty will have up-to-date information on the offer in general. However, I do find it is very geographic-specific. Suppose you are moving to a location that is hard to staff too. Maybe not desirable at the general level, like other locations. In that case, you’ll have the opportunity to get a higher signing bonus.

Smart Way of Negotiating

Let’s say the employer says, hey, we’ll give you a $10,000 signing bonus, but you want more. Let’s say you want 20. Well, you don’t ask for 20. In any negotiation, you don’t throw up the number you want. You go higher than that. So, if they’re offering ten and you would like 20, the smartest thing to do is ask for 30 and then hope they’ll meet in the middle.

Another thing that needs consideration is relocation assistance. Most sites will give a signing bonus and relocation assistance. Let’s say you get a $10,000 signing bonus. Then you’d also get 10,000 in relocation assistance, which would aid in moving expenses.

Sometimes, they’ll allow the physician to use that to travel to the city and look for a place to live. So, airfare, hotel, whatever, and others will also allow it if it’s a short move and you’re not going to use all 10,000. Then you could also use the rest of that money towards a security deposit or a mortgage in some situations.

It depends upon the employer and how they handle things. Physician-owned practices are much more flexible in using that amount for whatever you want. Big healthcare organizations usually have policies on what you can and can’t use, which are not adjustable. It’s, this is what you can use it for. And that’s it.

Negotiation Is About Leverage

Once again, if it’s harder to staff an area that’s difficult to bring in certain specialties, you have much more leverage than in a big metropolitan areawhere many people want to live and have great things. You don’t have as much negotiating power there. 

So, can you negotiate a signing bonus? Absolutely. You can. It’s just a matter of whether the employer will meet you in the middle. Or whether they will move at all from what the initial offer is. Any negotiation is about leverage. And if you don’t have it, getting the employer to move in any way is challenging.


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