Overhead

[AB27]

How does overhead work? I'm seeing a lot of specialties have 20-30% overhead. If a specialist grosses 400k do they pay overhead (80k @20%) out of their ~220k take home pay? Is overhead higher in academic or community centres? Is someone gonna teach us this stuff lol

[zxcccxz]

Overhead comes out of the gross income (revenue). This is your NET income. Then you get taxed on your net income and finally you have your take home pay.

So overall, you'll take home more than if you had your gross taxed first and then you paid overhead after that.

Won't say I'm an expert on academic vs. community. Will let someone else touch on that.

[1D7]

No one teaches these things, basically you find out a bit in residency and learn most of it when you get a job. My understanding is the money for staff and rent has to come from somewhere.

In academics this is often partially or fully covered in some way by the hospital (they do this for control and stability) especially for practices with a large inpatient base. E.g. A hospitalist covering the wards and ER consults isn't paying $ to employ nurses or support staff.

In the community it typically means either you will pay (if solo), your collective group (if joint practice), or your employer.

I'm sure there are many exceptions and nuances to this, but this has been what I've observed so far.

[shikimate]

Short answer is NO, they aren't gonna teach you any financial stuff because it benefits many people to keep you in the dark.

I will write about this since it's Friday night so bear with me.