Welcome to the start of a rewarding career! As you enter your first professional role, you may need to decide on a salaried position or a production-based pay model. Understanding how these compensation styles differ can help you make an informed decision that aligns with your goals and lifestyle.

In this blog post, the Family Veterinary Care of Oakdale team explores some of the most commonly asked questions from early career veterinarians about salary versus production-based pay styles.

What is a salary-based pay structure?

Salary-based pay structures offer a fixed annual income and a consistent paycheck, regardless of your case numbers. Straight salary pay provides financial stability, which can be particularly appealing for new graduates still honing their clinical skills and adjusting to the demands of practice.

Salary advantages 

According to the American Veterinary Medical Association, a straight salary is the most common compensation arrangement in veterinary medicine. For new graduates, major benefits include:

  • Predictability — With so much to do and learn, you’ll enjoy a consistent paycheck that covers necessary costs and simplifies your budget.
  • Less pressure — Without the demand to meet specific production targets, you can focus on skill acquisition and providing quality patient care.

Salary considerations

Despite its popularity, some professionals question if a straight salary provides enough incentive or support for hard-working veterinarians. Considerations include:

  • Limited earning potential — Salary-based pay means your income is capped regardless of your performance or the practice’s profitability.
  • Reduced ambition — Since you won’t be paid more for late nights, additional cases, and unexpected procedures, you may be less motivated to take on extra work or stay after your shift.

What is a production-based pay structure?

A production-based pay structure ties your income directly to the revenue you generate, rewarding your efficiency and performance. Production-based pay models include:

  • Production plus salary (i.e., ProSal) — This is the second-most common compensation style and features a base salary, plus a percentage of the fees collected for your services.
  • Straight production — This model is exclusively commission-based. Veterinarians working on production-only generally make 18% to 21% of their output in a selected period (e.g., quarterly), plus benefits.
  • Other combinations — Some practices offer variations on the ProSal model, including guaranteed salary with production or bonuses after you meet certain production targets. Some practices apply negative accrual to their salary plus production models, which involves docking wages or fining the veterinarian for unmet production goals.  

Production-based compensation advantages

Many veterinarians appreciate production-based compensation’s benefits, such as:

  • Greater earning potential — Efficient and productive associates with a loyal client following earn significantly more than if their salary were fixed and feel more in control of their income.
  • Performance incentives —  Since your pay reflects your performance, associates on a commission-based pay model may become more efficient and productive.
  • More flexibility — You may have more control over your schedule, as your income isn’t tied to a set number of hours.

Production-based considerations

While some find production-based earnings motivating and gratifying, others fear that profit-driven medicine and a competitive self-focused, rather than team-focused, culture is created. Considerations include:

  • Income variability — While a ProSal model still provides a steady salary, your paycheck will fluctuate based on your productivity and the practice’s overall health.
  • Pressure and stress — The need to meet production targets can be stressful, especially for new graduates and you may recommend treatments or services that are not necessarily needed.

How do I decide which compensation style is right for me?

Deciding on a salary or production-based pay model is an individual choice that depends on several factors, including:

  • Career stage — As a new veterinarian, a salaried position can provide the stability you need while you gain experience. However, if you’re confident in your abilities and enjoy a fast-paced environment, a production-based model could be more financially and intellectually rewarding.
  • Financial goals — If you have student loans or other financial commitments, a stable salary may provide greater peace of mind. However, if you want to maximize your earning potential and don’t mind putting in the effort—or gambling on the practice’s continued success—production-based compensation may provide the gains you seek.
  • Other benefits and perks — Medical benefits, sign-on bonuses, loan assistance, stock options, time off, and performance-based raises should be viewed as part of your compensation package and considered in your overall decision. 
  • Practice culture — The practice’s culture and support system can greatly impact your first-year experience. In a production-based position, a supportive environment can make the pressure more manageable, while a structured setting and a salaried position can help your momentum.

While understanding the opportunities and limitations of each compensation style, as well as your own practical and financial needs, is crucial, ultimately your best choice is one that provides the freedom and stability to grow, learn, and thrive during your early career.

If you’re a recent veterinary school graduate or an early career veterinarian, Family Veterinary Care of Oakdale provides a supportive, growth-minded, mentor-guided work environment that will build a strong foundation for your entire career. Check out the full description of our available associate positions, meet our team, and apply online to join our passionate and dedicated family of professionals.