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I just got accepted to med school and I'll have to live off a LOC for a while. I figure I'll probably be up 100k in debt by the end of it all and I'm wondering what the salaries for FPs is like in the actual world, how long it would take to repay that debt, etc...

 

Is an FP grossing 200,000$ a year such an oddity? Is it common? Anyone got numbers on the average FP salaries in Canada?

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GP pay after expenses is about 100000 to 150000 then taxes are taken from that. So net after taxes assuming a marginal tax rate in Ontario of 46.5% is between 55 000 and 80 000. So you put in your bank account every month 4000 to 7000? My mental math is not great. But I am very sure of those incomes. These days a GP has about 30-40% overhead expenses.

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GP pay after expenses is about 100000 to 150000 then taxes are taken from that. So net after taxes assuming a marginal tax rate in Ontario of 46.5% is between 55 000 and 80 000. So you put in your bank account every month 4000 to 7000? My mental math is not great. But I am very sure of those incomes. These days a GP has about 30-40% overhead expenses.

Remember that the tax rate is progressive, so you only get taxed the higher amount on income over 60K or so (lower rates for the first X number, then higher for the next X, etc.) You will net more than you think. I don't have the stamina to do the math right now.

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Yes,

 

You will be taxed less. But the money has to stay in the corporation. That means you can't spend it. So if you want your money you have to pay it do yourself triggering a tax.

 

If you want to live a very middle class lifestyle in a neighborhood with teachers, fireman, and people in retail, that's fine. But if you want to have the nice car, house, etc. You will need to pay yourself that money.

 

That's why most people do not incorporate until they are completely debt free.

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  • 2 weeks later...

As far as I know, Quickdraw McGraw is correct: incorporation only reduces taxes on money you keep in the corporation. It's a good way of accumulating equity in the corporation for long term growth. . . but only good really when you're at the stage of your career that you have a whole lot of extra cash lying around that you don't know what to do with. It's not really useful when you're paying off debt.

 

BTW - $200k is totally doable as a GP in Alberta, especially if you're a rural doc. The average in the province for ?2004? was $200k, after overhead, but included rural docs. I do know a few city docs that bill that much. . . but it's tougher do as a GP.

 

When I was in ontario, it was essentially impossible to make $200k as a city doc. . . but things may have changed.

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One more point about GP salaries. . . overhead has a ridiculous say in what you make.

 

I was at a recent job fair in Calgary where I was quoted $8000-$8500/month for overhead in most offices in Calgary. That's NOT including CMPA fees, college fees, disability, CMA fees, etc. Just office expenses (but admittedly these usually are the majority of your overhead.)

 

I had an offer from a doc in a rural center just outside of Calgary asking for $4000/month in overhead.

 

Some family medicine in opportunities in Calgary involve almost NO office overhead - hospitalists, urgent care centers, long-term care centers, hospice care, etc.

 

Anyone wondering why traditional family medicine is in such trouble in Canada just got their answer.

 

From a business perspective, I'd be an idiot to enter traditional family practice over some of the other options.

 

Too bad (I'm saying this 100% tongue in cheek) I like family medicine.

 

But once again - in the end you can do well doing family medicine (in alberta) if you are smart about how you do things.

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I thought that corporations could pay out dividends, which are taxed, but at a lower level than normal personal income?

 

At the same time however, creating and maintaining a corporation is an expensive venture...one that is often found to me more beneficial for specialists whose gross income is significantly more than that of family doctors.

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I don't know how many of you are members of the OMA, but I believe that in the last OMA magazine to come out, they ran through a quick overview of incorporation with some sample calculations. I don't normally read the magazine because it seems to be geared more towards policy/business, but I was desperate while eating breakies one morning.

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You can bill a lot in FM IF you are willing to work hard. When I was a student and I did a rotation in Vancouver, I worked with an FP who billed 1600 dollars a day (he showed me his billings from a typical day). He also does nursing home visits so who knows how much more he makes from that. BC has a website which lists how much each doctor billed MSP during the fiscal year and I looked him up and he billed 350K. Minus expenses, I think he must've netted at least 250k. His overhead includes rent and one receptionist (as well as supples). Another FP that I worked with billed 405K (he did obstetrics though).

 

With that said however, a lot of people who go into FP choose lifestyle over money. Most of the female docs I've been in touch with in Edmonton work 1/2 time or less, so it's no wonder their billings are so low. But just know that if you are driven, the money will be there for you... of course there are things in life more important than money but...

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  • 2 months later...

Just to add my 2 cents. Not a physician but married to a GP and have been doing the finances and research on these topics.

 

With incorporation, the advantage is that you can withdraw some of the money as dividends at the end of the year. The laws also allows other shareholders to be paid dividends. Shareholders will be mainly your spouse children 18 years and older. Dividends are taxed at a lower rate and all pulled together provides significant tax savings. Some GP's also employ their spouses and in such situations all payments to the spouse come back to the household and taxes on the spouses income are lower.

 

For the taxes in Ontario in 2006, $100,000 income will provide $70,626 takehome. $150,000 will provide $97,970 takehome. You can work out other numbers and look at other provinces here http://www.ey.com/GLOBAL/content.nsf/Canada/Tax_-_Calculators_-_2006_Personal_Tax

 

For family physicians, the best is not to concentrate solely on office family practice. My spouse does a variety, office, ER shifts in various small community hosiptals (usually about an hour from the big city where we live), some obstetrics, now thinking of joining for surgical assist in big city hospitals, about 3 home visits a month with an agency (usually in the evenings for about 4-hours - looks at about 6-7 patients per evening and pulls in over $2000). Once a while travels to northern ontario for about 3-4 weeks a year and pulls in over $30,000 each trip. Sometimes does walk-ins at various places. On the gross side, yearly income is pretty good over the incomes suggested and grows very year. Pretty much balanced lifestyle in addition as there is control over work hours.

 

We have realised that doing office work alone is highly unlikely to provide much income. For office work, pay overhead of 30% and happy with it that way instead of having to run the business ourself.

 

Satisfied with work variety and income as it stands now. You have to be smart business wise.

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Thanks for all the great information, ofie! It's neat to know that family physicians can do a variety of things!

 

I'm just curious about the clientele for the home visits with an agency - is it mostly elderly people or people with disabilities who have difficulty travelling outside of their homes?

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Not really. In ontario, you are allowed to bill up to 20% of your OHIP billings through home visits. It could be anybody for the home visit. People usually call to the agency and the agency lets the doctor know. I usually drive my spouse for these visits. Hence at the end of the year for tax purposes, my spouse could pay me if that will drop her income to the lower tax rate 9you need an accountant to help you on this-my spouse has seen kids to able bodied people to people with disabilities to some people just using the service to renew their prescriptions.

Check this site for more information http://www.medvisit.ca

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  • 1 month later...
  • 2 weeks later...
Unfortunately, All the assets in a professional corporation are not exempted from bankruptcy. So if someone decided to suit your butt off, every penny in your corporation counts as personal asset, so it is up for grab! Which is unlike Business corporation!

 

This is true - but it sure as heck would allow me to sleep better knowing that my family's home is not going to be seized in some money grab.... I couldn't care less about my office assets - they can be easily replaced. ;)

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Incorporation is not just for specialists - many many family physicians are finding lots of benefit (as previously discussed) in doing this. According to stats, the average gross billings of family physicians in NS is approx $205,000 per year. But remember - that includes physicians who work part-time, are out for several months on maternity leave, etc. The family physician I recently worked with billed $380,000 last year! Also - the move from fee for service to salaried positions takes the guesswork out of overhead. Many smaller communities are moving towards collaborative practice models where the district is at least partially involved in funding the overhead, and the physicians are guaranteed a certain salary.

 

Like some of the previous posters said, by adding non-office based activities to your practice, such as ER shifts in community hospitals, minor surgical procedures (biopsies, scar revisions, etc), nursing home coverage, etc - you can significantly increase your earning potential without impacting your overhead costs. Not only does that help your bottom line, but it makes your practice more interesting/varied/etc, and fills in areas of need in the community.

 

 

is that a big city GP or a rural GP? I dont see how a city GP can rack up a bill that high.

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Unfortunately, All the assets in a professional corporation are not exempted from bankruptcy. So if someone decided to suit your butt off, every penny in your corporation counts as personal asset, so it is up for grab! Which is unlike Business corporation!

 

there are new tax laws which allows an incorporated professional to have a trust whose beneficiaries are dependents/spouse/or whoever he/she wants...the trust which is attached to the corporation can have a holding company. If the assets are allocated to the holding company, the assets are technically intrusted to the beneficiaries and are shielded from any law suits against the professional....definitely consult a legal and/or estate planning professional for details, but this is definitely possible if such things concern you.

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is incorporation only for your office practice?

 

or can you for example "incorporate" yourself and when you do nursing home visits, OR assists, walk-in clinics etc bill the government as an incorporation or do you have to bill as an invdividual physician?

 

also, if you join a group practice, do you join the group incorporation or can you be incorporated yourself within a group setting?

 

thanks!

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This might be a stupid questions but why do rural family docs GROSS more than city family docs? I could understand them netting more as overhead is probably a whole lot less...

 

Assuming Doc X works in an urban setting from 9-5 and Doc Y works in a rural setting from 9-5. Why is it Doc Y would be grossing any higher, they should be seeing approximately the same amount of patients per day, hence same number of consultations, same amount grossed? No?

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As far as I know, rural docs don't usually work regular 9-5 hours, due to the shortage of staff that is inevitable in many rural areas. Perhaps that's why they gross more; they simply work many more hours and see more patients in a given week.

 

That's one of the reasons why it's hard to recruit rural physicians.

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I don't know if this correct( I'm probably wrong) but rural family physicians often end up doing several procedures themself rather than writing a referral to another doctor. As an example, my current physician practices in Port Perry and she removes ingrown toe nails instead of referring her patient to a podiatrist.

 

 

I am not too sure how the billing works so maybe this assumption is incorrect...

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