Salaried GP -vs- GP Principal

How Much Does a Salaried GP Earn in Comparison with a GP Principal? 

 This is a question our GP clients often ask.  The answer is often complex.

Superannuation

One important point which is often overlooked is that a salaried GP does not bear the cost of the employer’s 14% superannuation contribution.  By contrast a GP principal does.

The fees and allowances received by a GP principal can include an amount to compensate the GP for having to pay the 14% employer’s superannuation contribution as well as the employee contribution.

Therefore, in comparing the gross salary earned by a salaried GP with the profit earned by a GP principal, it is necessary to adjust the GP principal’s profit to take account of the additional 14% employer superannuation contribution which has to be paid out of the GP principal’s profit.

Other Matters

 Other matters which need to be taken into consideration would include:

  • The number of clinical and administrative sessions which will be worked.
  • Entitlement to holiday.
  • Who would bear the cost of professional fees and subscriptions?
  • Who will bear the cost of locum insurance?

 “I had been a client of Nichols & Co for some time when I had an offer to join a GP practice.

 Steve Nichols reviewed the accounts of the practice and we discussed these by phone.

 The main issues discussed were: 

  • The comparative profitability of the practice.
  • The financial stability of the practice.
  • My expected income as a GP principal.
  • A comparison between my expected income as a GP principal and my current income.
  • Drawings levels at the practice.
  • Superannuation costs.

 Having discussed the matter with Steve I felt very confident about the financial consequences of joining the practice.

 I would recommend that anyone considering joining a practice ask Steve or his team to complete a similar review.”

Dr K E Thomas – GP Principal

 

How We Can Help

 We help our clients understand all aspects of this comparison to ensure they are able to make an informed decision before joining a practice as a GP principal.