Five Steps to Calculate your Veterinarian Effective Hourly Rate

Relief work has become a hot trend in the veterinary world over the last several years. The attractive attributes are widely known at this point: flexibility, minimal drama, and of course, higher pay. But is that part about higher pay really true? And it seems like every day we hear of a new level of signing bonuses for associates. But is that bonus worth the tradeoffs? What are you giving up to get it? Believe it or not, when you level the playing field, a relief vet charging $100 per hour is actually only making $70 per hour. And associates on pro-sal?  All those extra hours you have to put in (that you didn’t know you were signing up for) are dragging your hourly rate down. Associates actually make about $72/hour (or even less) by the time all the extra hours are included.

Not what you were expecting? We call this the law of diminishing hourly rates. When all is said and done, you can make more as an Associate IndeVet than a relief or associate vet and work LESS.

Here’s how to calculate and compare the effective hourly rates for an associate position, a relief vet, as well as for an IndeVet. First, you’ll need to gather some of the variables.

1. Calculate the number of hours per week that you actually work.

If you’re an associate, you might be scheduled for 40 hours a week, but time spent at work can be much more.

• How early do you arrive for work before the shift starts to read lab results, make calls, and prepare for the day?
• How often do you stay late to finish the last “wellness” appointment of the day that always ends up needing radiographs and labwork?
• How long does it take to finish up records and make calls? And those callbacks you’re doing at home?
• Management meetings? Filling in for a vacationing colleague? Add ‘em up!
• I bet you’re working much more than you think, when it’s all said and done. Not fun!
  • Total hours ________

If you’re a relief vet, your scheduled hours at the clinic are certainly only the beginning. Not only are you practicing medicine, but you are also running a business. That’s called working “on the business” not working “in the business,” and that takes a ton of time and mental space. Consider how much time you spend on the following:

• Sending invoices, processing payments, and balancing your P&L.
• Negotiating your contract with new practices, responding to outreach from existing and new clients, and balancing your scheduling needs.
• Factoring in longer commutes, the number of hours worked dramatically increases.
• These extras can easily add 5-7 hours to a typical workweek.
  • Total hours ________

As an IndeVet, every hour on the clock is an hour you’re paid for.

• You won’t be performing any invoicing, and accounting is non-existent.
• You won’t be wasting time on office politics and guilt-inducing drama.
• Scheduling is as easy as shopping with Amazon Prime.
• You’ll often be paid for your commutes – at the same hourly rate as work.
  • Total hours ________ (put in any number you want!)

2. For all you associates, the first thing is to calculate the financial value of your benefits to add to your yearly compensation package.

These can be more confusing to calculate, which is why I’ve quantified them for you in the chart below based on IndeVets typical benefits. Simply remove any line items you don’t receive or update them if you know the specific numbers from your company. You’re going to add this total to your compensation (Never thought about it that way? You should. All those benefits can add up.)

For those who choose to grow their family and become parents, whether you’re a birthing parent or not, paid parental leave can be a huge factor in your yearly compensation. Not many companies offer paid parental leave, but when they do, like IndeVets, it’s a benefit that adds a ton of value to the total compensation package.

3. But for relief vets, benefits are all paid out of pocket, so instead of adding these benefits, you would subtract them as out of pocket expenses in the equation in the section below.  So, subtract $41,260 from your total compensation.

In addition to accounting, licensing, and CE, you also have marketing, and travel expenses, or others that are not typically in a benefits package. You should add those to this list and calculate the grand total.

4. The final variable you’ll need is your gross salary. That’s the total amount you earn before benefits and taxes. Below are a couple of examples for the sake of calculation.

• Melissa is an associate and earns $140,000. This represents a base salary of $100,000 with a production of $40,000 (20% of $700,000 in revenue for the year).  She calculates that when it’s all said and done, she’s in clinic 48 hours a week.
• Sarah is a relief vet and bills 40 hours a week at $100/hour working in clinic and therefore brings in $208,000 as gross revenue to her business. She works on the business for an additional 6 hours a week, bringing her total hours to 46 hours a week.
• Kelly, an IndeVet, completes a total of 40 hours a week in the clinic on average. She’s also paid an additional two hours for her time spent commuting every week, resulting in $140,000 in annual earnings.

5. Now let’s pull it all together to calculate the effective hourly rate for each. *We’ll use the benefits from the chart for consistency.

Associate (Melissa): $140,000 + $41,500 / (48 hours x 52) = $72.71
Relief Vet (Sarah): $208,000 – $41,500 (46 hours x 52) = $69.60
IndeVet (Kelly): $140,000 + $41,500 / (40 hours x 52) = $87.25

At IndeVets, our goal is to maximize your happiness as a vet; and more importantly, as a person with a rich life outside of work. Compensation certainly plays a role, but having proper peer and administrative support, less drama in the workplace, valuable benefits, job security, and the freedom to choose the practices we work at and when we work, means having ample time to enjoy a full life outside of work.