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Why You Need A Retainer Payment As A GP

Whether you’re looking for a GP position as a new fellow of the college, or you are an experienced GP, remuneration is going to be an important consideration for your next job.

As background, General Practitioners in Australia are generally paid as a percentage of billings. This will range from between 50%-80%, depending on the size and nature of the practice. The remainder of the billings go to the practice for running costs and profit for the owner/company. Either a GP will invoice for their percentage (e.g. 65%), pay the remainder (e.g. 35%) as a service fee to the practice. You can be engaged as an employee, sole trader, or company as a GP.

Having a retainer as a GP is just as important for permanent positions as it is for locums, especially in new practices. A retainer is an agreed amount that you will be paid, regardless of your billings. Like a retaining wall, it adds an element of security to your income.

It is often structured as a ‘greater thereof’ deal. That is, you are paid the greater of your percentage of billings, or your retainer – not both.

With the hostile environment around Medicare rebates, the co-payment issue, and an increasing proliferation of corporate, bulk billing practices, income security is becoming more important than ever.

Retainers in capital cities will generally range from $120-$170 per hour.

Obviously, it’s a two-way street though, and you need to be earning enough to at least cover your retainer within a reasonable period. Ideally, your income will exceed the retainer within three to six months in a new practice.

When you’re negotiating remuneration for a GP position, it’s important to consider whether there is a retainer included as part of the contract, and be certain of how it works. Many practices will be reluctant to provide a retainer, but it is becoming a far more common employment model than it was in the past, and will increase into the future.

Naturally, a medical recruitment agency can help with identifying the right position, and negotiate on your behalf. Call our team on 1800 633 505 today if you’re considering a new role.

 

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