Private Practice Olio

[R. Matey]

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For therapy, I'm completely guessing, but if assuming $150/hour, you need to see 27 patients/week to hit numbers similar to the first example above (i.e., $190k gross). That doesn't sound horrible.

Back to this, my napkin math typically assumes 4-5 weeks off a year and about 30-40% in taxes and expenses before net income, some of which would probably be distributed to me in earnings and some would be distributed to me as a reasonable salary. Is this right? Too conservative? Depends?

 

[R. Matey]

Agree, people definitely do think about the tax breaks, or the extra opportunities to shield revenue from taxes when they are comparing the two. Also, I see a lot of people dismiss PP revenue as "that's before taxes!" as if their W2 paychecks don't have taxes. Either way, if people are thinking about the two options and don't have a solid grasp on taxes and other business stuff, they'd probably be better off in consulting with a financial specialist who has knowledge in their area about what this could look like so they can compare some real numbers. You also bring up a good point, even if I don't make a lot more than I did in a hospital job and was just breaking even, I'd still go PP if just for the significant flexibility that I have. It's been huge with kids and other non-work responsibilities.

This is sort of the rub for me. My org pays me a pretty competitive salary for straight clinical work (toward the upper end of Sanman's above scale), I work four days a week, and have great benefits. For kids, clinical work would require me to work nights and weekends so I worry that I would be actually spending more time away from them than I would like. I think eventually I would like to be in a free agent just to dictate my own schedule and have the experience of hard work = more money for me personally. Right now, I'm one of the highest earners in our system for my position and don't really see much gain from it.

 

[WisNeuro]

Back to this, my napkin math typically assumes 4-5 weeks off a year and about 30-40% in taxes and expenses before net income, some of which would probably be distributed to me in earnings and some would be distributed to me as a reasonable salary. Is this right? Too conservative? Depends?

You can limit the taxes quite a bit with shielding, and overhead will completely depend on your area (e.g., rent). I pay a lower figure in taxes/expenses than that. But, I'm also not operating a physical office in say, a NYC/Boston/San Fran area.

 

[Sanman]

Back to this, my napkin math typically assumes 4-5 weeks off a year and about 30-40% in taxes and expenses before net income, some of which would probably be distributed to me in earnings and some would be distributed to me as a reasonable salary. Is this right? Too conservative? Depends?

The funny part is that the math is different for everyone. I get 11 federal holidays and I have 9 weeks of annual leave racked up. That means I only have to work 41 wks this year not counting sick leave. That would hurt in PP.