If a nurse practitioner (NP) is offered a job with a role as an independent contractor (IC), should she agree to take it? Any situation has pros and cons, so knowing details allows the NP to make a good decision. Thus, Should an NP Take a Position as an Independent Contractor? An NP might see employers offering as much as $75 an hour more for a nurse practitioner to work as a 1099 independent contractor, but is it as beneficial as it looks?
How Taxes Work as an Independent Contractor
Taxes are handled differently with regular employees vs independent contractors. When an NP is a W-2 employee, the employer takes state and federal taxes, social security taxes, etc., out of the NP’s paycheck. This doesn’t happen in a 1099 role. No taxes are deducted from the nurse practitioner’s pay. Come tax time; the nurse practitioner is responsible for paying income tax, social security tax, Medicare tax, and self-employment tax. Social security and Medicare taxes will be twice as much, since the nurse practitioner doesn’t have an employer paying half. Although it looks like the nurse practitioner is being paid a lot of money at pay time, the NP can’t forget that they will still owe taxes at tax time.
Nurse practitioners must also take into account that they will have to pay for work related and practice expenses that they wouldn’t have to pay for as an employee, such as: LLC fees, licensing board fees, DEA registration, professional liability insurance premiums, AANP dues, business taxes, etc.
Benefits of a 1099 Nurse Practitioner
When working as an independent contractor, the nurse practitioner can demand more money. The employer doesn’t have to shoulder the tax burden, so they should be able to pay the NP much more. Since the NP also won’t receive any benefits as a 1099 contractor, so the NP’s pay should compensate for that. The NP can figure that they can ask for ten to twenty percent more than standard pay for a W-2 employee.
Are You Self-Employed (like a Physician Assistant)?
Some people get confused as to whether an independent contractor is considered self-employed. They are the same thing. Thus, independent contractors often go by other names, such as freelancers, contract workers, small business owners, and more.
When being offered a job as an independent contractor and receiving a contract to sign, it is wise to have the contract reviewed by a trained lawyer to handle these types of things. This way, the NP can be sure that the contract is a binding legal document that will benefit the NP in essential ways and establish the independent contractors role.
Do Nurse Practitioners Make as Much as Doctors?
Do nurse practitioners make as much as doctors? If the NP has ever wondered if a nurse practitioner will make as much as a physician, you may get the answers you desire below. Salary differences are not often published, so it is good to view some estimates. It can help a medical student decide on a career path and professional role.
Difference between a Doctor and a Nurse Practitioner
A doctor or MD is a doctor of medicine. Becoming an MD takes about 11 post secondary years (after high school) of education and training. The duties of a physician include diagnosing illnesses, treating injuries, taking medical histories, ordering diagnostic tests, reviewing tests, and prescribing treatment plans.
A nurse practitioner is a professional who provides care in several different healthcare settings. Becoming a nurse practitioner takes 6 to 8 years of post secondary education and training. The duties of an NP include diagnosing acute and chronic conditions, providing urgent care, treating illnesses and injuries, ordering and performing x-rays, lab work and other tests, prescribing medications or treatment, and counseling.
Costs to Become Nurse Practitioners vs Doctors
Everyone looking to enter the health field must research their state or region for the cost of education for nurse practitioners and doctors. Potential student debt could make a difference on which career path you choose. There can be quite a significant difference in cost. Also, to be considered, the physician has years of residency where the salary is compressed. Nurse practitioner costs are about 20 to 25 percent less than physician’s. So the nursing salary will win in the short term, but after residency is done for a physician, his income will continue to grow.
Examples of Salary Differences
Here are some examples of the pay differences in practicing NPs and physicians.
- In Family Practice, a nurse practitioner earns around $89,000 while a physician earns $176,000
- In Emergency Medicine, a nurse practitioner earns around $103,000 while a physician earns $251,000
- In Pediatrics, a nurse practitioner earns around $82,000 while a physician earns $171,000
The top three highest paid nurse practitioners are:
- Certified Registered Nurse Anesthetist
- General Nurse Practitioner
- Clinical Nurse Specialist
Employment Contracting Basics for the Nurse Practitioner
Is getting your nurse practitioner worth it? Is it worth getting your nurse practitioner employment contract properly reviewed and negotiated? Negotiating a contract is always worth it, so you will have a profitable and productive relationship with your new employer. The overall goal is to be very confident of the contract details and that you won’t hurt yourself in the future with decisions finalized in the contract. Never settle. Know your rights and ensure you keep them.
Know Your Worth
As a nurse practitioner you are a valuable asset to any organization. Your knowledge and skill is in high demand. As an employee of a clinic or a hospital, you contribute to them turning a profit, and you should be compensated fairly.
Contract Negotiation
Negotiating a contract is important to ensure you have clarity on how your potential future employer will reward your performance, not just now but also in the future. Realize that emotion should stay out of it, and you should maintain a calm and focused attitude. You are simply having a conversation. Even better than embarking upon this yourself — have a lawyer do the review and negotiation for you. Someone with experience can better judge what should be included in the contract.
Issues to Review and Negotiate
There are several issues within a contract that need review and possibly negotiation. These include:
- Salary – you should know the average amount a nurse practitioner is paid hourly and annually. When you have this average, you will know how to consider your potential employer’s offer.
- Bonuses – the contract should state how bonuses will be paid and when. It should be well-defined. Don’t let your employer get away with making empty promises.
- Flexibility of Schedule – depending on your lifestyle and scheduling needs, you must ensure it is laid out in the employment contract.
- Vacation Time – most employers already offer about two or three weeks of paid vacation time. You might want to negotiate for a few days more. If no paid vacation is offered, ensure your schedule’s flexibility allows for time away.
There are other points to review, such as continuing education, insurance benefits, and retirement. A thorough contract review and effective negotiation puts your career on the right track.
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When an experienced lawyer reviews your contract, you will find great financial benefits that outweigh the cost of the review. If you need assistance with an employment agreement or contract review, schedule a NP Contract Review with Chelle Law today!