Pro-Sal Compensation Model
Pro-Sal, or Production + Salary, is a compensation model designed to fairly reward doctors for the revenue they generate. It provides a base salary derived from projected annual production, with the opportunity to earn additional income when production exceeds expectations.
For example, if an associate is expected to generate $600,000 in annual sales, they might be offered a base salary of $120,000. If they exceed $150,000 in quarterly production ($600,000 ÷ 4), they would earn additional compensation based on the surplus.
Key Considerations When Using Pro-Sal
Standard Percentage of Sales as Salary
The typical percentage of gross sales paid to a general practice veterinarian is 20–22%. Ideally, doctor compensation (salary + payroll tax) should account for 16–20% of total veterinary costs, and 20–22% of the doctor’s gross production, excluding payroll taxes.
Are Benefits Included in the 20–22%?
No. Pro-Sal typically excludes benefits such as CE allowances, dues, insurance, and retirement contributions. While most hospitals pay 20–22% on veterinary services regardless of benefits, both employer and employee should consider the total compensation package during negotiations.
How Often Are Bonuses Calculated?
Production bonuses can be calculated monthly or quarterly. Choose a frequency that aligns with your cash flow and incentive goals.
Rolling Over Negative Balances
Will shortfalls roll over to the next period? Rolling negative balances can protect the hospital financially, but may also reduce motivation for associates. Another issue with rollover negative balances is time away for vacation or C.E., both of which negatively impact production and devalue the use of both benefits. Policies should be clearly defined in contracts.
Varying Commission Rates by Sale Type
It is common to adjust commission rates based on profit margins. Services like surgery typically support 20–22% commissions, while products with lower margins (e.g., medications) may not.
Should I Offer a “Competitive” Salary?
Corporate-owned hospitals often offer generous packages thanks to preferred pricing contracts with labs and pharma companies. Independent practices may not have this advantage. Offering salaries that exceed 25% of annual productionmay compromise profitability and the long-term sale value of the practice. Always evaluate total compensation in the context of your cost of goods sold (COGS) and overall business health.
Estimating a Doctor’s Annual Production]
If you have historical data or a comparable associate, estimate production using:
Annual Sales = Average Invoice × Average Weekly Appointments × 51 Weeks
Base Salary = Projected Annual Sales × 0.20
Production Rules by Sales Category
Different product/service categories generate different margins. Use these guidelines to determine commission structure:
| Sales Class | Typical Commission % | Notes |
|---|---|---|
| Professional Services | 20–25% | Exams, surgery, dentistry, diagnostics. Highest-margin services. |
| Lab Work | 15–20% | May be lower if outsourced to reference labs. |
| Pharmacy (Rx) | 5–10%, or none | Low margin; often excluded or minimally compensated. |
| Preventives (flea/tick, HW) | 5–10%, or none | Slim margins; often sold by support staff. |
| Food/Diet Sales | 0% | Rarely incentivized. |
| Boarding/Grooming | 0–5% | Often excluded unless directly managed by vet. |
| Retail/OTC Products | 0–5% | Typically excluded or token commission only. |
Why Tiered Production Makes Sense
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Support staff often handle product sales; incentivizing doctors for these may be inappropriate.
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Service-based incentives focus associate effort on profitable, skill-based activities.
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Diagnostics often reveal additional pathology, generating more treatment opportunities and long-term revenue.
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Determining Production Bonuses
Some PIMS can calculate the production bonus provided they have been programmed with the correct percentage to pay on each class of sale. Unfortunately, some vet software programs, including Avimark, do not allow the user to program these by class. Instead each item must be individually programmed with the production percentage. Call your software provider for workarounds, but it may be easier just to export sales data, by associate, into an Excel spreadsheet, organize sales by product class, and then calculate the total production bonus.