Dr. Caroline Brookfield shares her tips as a relief veterinarian : How much to charge and how to manage her self-employed paperwork.
10 March 2020It feels like asking for a first date. Feeling awkward, fearful of rejection, I tentatively sidle up to my target. “Hey, can I ask you something? What do you charge these days?”
In my experience, most locum veterinarians and technologists (RVT) set their rate this way. Or a wild guess.
Some locums just pick a random amount and change it depending on the reactions from clinics. “Oh wow, we could never pay you that” results in a lower rate. Or, “Really? That’s great, can we book you until kingdom come?” results in a higher rate.
When I first started offering locum tenens services in Calgary, I sat down with a calculator and a glass of wine. I compared a salaried, full time position to locum tenens fees, using a similar number of working days, factoring in all the known costs and liabilities. At the time, it worked out pretty evenly. Practice owners who hire locums might shake their fist at the screen in disagreement. What a locum tenens gets paid in one single shift cannot be compared to the take-home pay of a salaried employee for the same length of time. Vacation time, insurance – liability, health and disability, EI payments, CE cost and time off, the list goes on of what is invisibly rolled into an employee’s salary. Additionally, the emotional and cognitive cost of jumping into a new practice and always being “new” takes significantly more energy, for me, anyway. It’s a unique skill to be a locum, and deserves fair compensation.
HOURLY OR DAILY? OVERTIME, ON –CALL AND MILEAGE FEES?
Some veterinarians choose to set a daily rate instead of an hourly rate. When I started, I charged a full day rate (8 hours) and a half day rate (4 hours) with an overtime fee per hour. Now, I have tweaked the language so that I charge a regular hourly rate with a 6 hour minimum. My overtime fees (if I miss a lunch, or stay late) are 1.5 times higher than my regular rate. I hate missing lunch. If a clinic only needs me for a few hours in the afternoon, I still have to turn away a full day elsewhere. And I have to get out of my pajamas. Some locums are fine with charging an hourly rate for a few hours, so do what works for you.
Other common conundrums include; travel time, accommodation, mileage fees, on-call fees, and overtime. I can tell you that from my 20 years as a locum, and coaching other locums, I have seen no consistency. The reason locums choose their lifestyle often has to do with the control they want over their schedule and bills, so there is no cookie cutter approach.
I determine a kilometer radius I’m willing to drive for “free”, and outside of that I charge mileage on additional kilometers. In the past, I’ve been paid a few ways for on-call work such as a base for overnight availability, plus either hourly rate or percentage of billing for any emergencies I had to attend. I require a hotel for an overnight stay, or a private Air BNB style. Avoid staying in the practice owner’s house while they are away, unless you are very confident that it will be comfortable for you. I often hear horror stories of unsanitary living conditions, teenagers having parties, and weird rules.
At the end of the day, setting your rate is just like any product or service. Determine what you think is fair market value, then see what the market can bear. Factor in your vacation and CE time, and time for managing your actual business. You are running a business, treat it that way.
That might seem easier said than done. How do you start? Oxilia provides a very helpful tool that gives an average of the hourly rate for each area in the country. Locum rates in Moncton are much different than those in Vancouver, so this tool is a great way to make sure you are not completely out of line with industry averages.
Using these suggestions and tools, you will find the right price for a win-win solution. One final caveat: If you have special skills, or you are confident that you provide high value services, or you are living in an expensive area and travelling, charge what you think is fair and reasonable. Even if it is higher than the average local rate. Your calendar will tell you the truth about what you are worth.
WHAT CAN I EAT INSTEAD OF AN APPLE A DAY TO KEEP THE TAX MAN AWAY?
For goodness’ sake, whatever you do, keep good records. If you have ADHD (like me), or hate paperwork (like everyone on the planet), this can be a struggle. My philosophy for paperwork is the same as my general life philosophy; get help from an expert, use tools, be willing to pay them, and focus on what you do best. Isn’t that what you want your clients to do?
– Free Apps to manage expenses are helpful. I use WAVE Accounting because it’s free. I can take photos of a bunch of receipts at a time, it reads what it can, and I edit the rest. Boom! Expense sheet for the year. You can also use a Cloud Folder like Google Drive or Evernote to take photos of receipts with a smartphone directly into relevant folders.
– Hire an accountant and/or bookkeeper. Don’t do this on April 1. Do it now. Get their advice on how to maximize deductions.
– Spend one day a month, or an hour a week, or whatever, on paperwork (factor this time in when setting hourly/daily rate).
– Make sure you meet criteria for self-employment. Check out the CRA website or ask your accountant or lawyer for more details.
– Remit your GST and tax payments on time or face stiff penalties. Even better, just get your accountant to do it!
– Deduct a portion of every cheque to put into a tax-free spending account or designated savings account for income tax time, and one for a vacation fund.
– Use Oxilia’s accounting feature to create reports. Review these every few months.
– Oxilia manages your invoicing, so that’s one annoying job you don’t have to do!
– Mileage tracker – I use Mile IQ, which automatically starts when you start driving. Don’t let the drives pile up. Reviewing 4 months of drives is not a great Saturday night date night, according to my husband.
I hope this gives you some ideas on how to structure your fees and paperwork for success. Sure, there are some new skills you need, and new business expenses to pay. The paperwork can be frustrating – but don’t forget the reason you became a locum in the first place. It’s a small price to pay for freedom, right?
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