If you are paying your registrar above the minimum rates outlined in the NTCER, you need to be mindful of the issues you may be creating for yourself, the practice and quite importantly the registrar themself in the long term. While you may pay vocationally-registered GPs 60+% of billings, most commonly this is done as a tenant arrangement, meaning you then don’t have to pay for:
→ Superannuation (10.5%, increasing to 11% in July 2023)
→ Payroll Tax – varies state by state (e.g. VIC = 4.85%)
→ Workers Compensation Insurance – varies by state and size of payroll (eg 0.5%)
→ Annual Leave (7.69%)
38hr/wk x 52 weeks = 1,976 hours annually, 38 x 4 (wks leave) = 152 hours leave annually, (152/1976) x 100 = 7.69%
→ Sick Leave (3.84%)
38hr/wk x 52 weeks = 1,976 hours annually, 38 x 2 (wks leave) = 76 hours leave annually, (76/1976) x 100 = 3.84%
If your registrar is getting 60+% of their billings and then your practice has to cover additional employment on-costs, it is unlikely you will have anything left to cover your practice costs.
Consider also the scenario should you later contract this same registrar once they’re fellowed. To meet the business’ responsibilities of achieving a profit, it’s unlikely you will be able to offer them more than 65% ongoing as a tenant GP. Since this is so close to what they have negotiated as their percentage while training, it is impossible to avoid disappointment when this percentage is no longer accompanied by the sick leave, annual leave, superannuation, workers compensation insurance, etc enjoyed as an employed registrar.
The NTCER sets out the minimum you need to pay your registrar. This is a base line from which you have the flexibility as a business to offer more, but only if feasible in terms of sustainability.
*These percentages are demonstrative only and should not be applied to the calculation of your registrar’s payroll.