If you’re a doctor considering a move to Canada (or you’re already on your way), you might be curious about how physicians here get paid. While 97% of the doctors in Canada operate under the fee for services model – where physicians are essentially independent contractors who bill the government for their services and time – there are some alternative models of payment as well. How you get paid as a doctor in Canada depends on where you work and the kind of medical services you perform. Sound interesting? Here are a few of the most common ways doctors in Canada get paid:
Fee-for-Service Billing (FFS)
As mentioned above, most of the doctors in Canada operate essentially like a small business, where they bill the provincial governments according to the time and services that they provide. As a doctor, you’re considered self-employed and you submit to the provincial government what is technically an ‘invoice’ for the patient you saw, the services you performed, and the amount you expect to be paid. This amount is set out by the Ministry of Health in the schedule of benefits (SOB) for the province where you live – the Ministry will then reimburse you for this amount, which becomes your salary. In some cases, you can also get reimbursed by a worker’s compensation board (for patients who are injured at work), a private insurance company (for uninsured patients) or by the federal government – these situations are uncommon, and will depend on the kind of patients you see.
Under Canada’s Universal health care system, the fee for services model works in the same way across the country, with doctors reimbursed for their time according to the SOB in their province – the SOB outlines the medical services, procedures, and fees that you can bill for each service and is applicable to all family doctors and specialists working within the province. For example, if you’re working in Ontario as an anesthesiologist and you see a patient for a consultation, you would submit a claim using the fee code A015A (Consultation – Anaesthesia), and can expect to be paid $106.80, which is the corresponding dollar amount for that service.
The service fees are set out by the provincial healthcare bodies and are non negotiable. Typically provincial governments will pay out claims twice a month according to designated cut-off dates, and you’ll bill for your time in bulk – if you’re just starting out with the Canadian system, it’s a good idea to use a billing software, which will help you manage your claims, payments, and rejections.
Even if you’re not getting paid under the FFS model, the Canadian Medical Association recommends every doctor in Canada familiarize themselves with FFS billing, since almost 95% of family doctors and the majority of specialists will bill for their time using this system.
Enhanced Fee-for-Service Billing
Even though you can’t negotiate the fees set for your services by the various provincial governments, bonuses or extra incentives exist in most provinces for certain types of patients (such as seniors, children, or patients with complex or chronic diseases) as well as incentives for coming in at night on the weekend, or from another location. These premiums are also set out in the SOB and will depend on the province where you live, but using these enhanced FFS billing options can increase your salary in the event of long hours or difficult patients.
Alternative Payment Plans & Salaries
Although it’s not the most common form of physician payment in Canada, salaries and alternative payment plans (APP) or alternative funding plans are becoming more popular in many provinces. An APP is essentially an agreement between a doctor (or a group of doctors) and their provincial health body. This agreement outlines the salary, incentives, and bonuses that they agree to receive in exchange for providing their services.
APPs are most popular for family physicians, and are sometimes used in rural areas where high numbers of patients aren’t as common. Without a large number of patients, the fee for services model becomes unrealistic, but these areas still need doctors in order to accommodate patient needs. These programs are often appealing for doctors as they offer income stability and options for maximizing your earnings with bonuses and other incentives.
While it might be common in other countries, generally very few doctors in Canada work under a fixed salary. These kinds of doctor salaries can vary from a typical annual salary to sessional payments, shift stipends, or hourly rates – the kind of salary you receive will depend on your employer, and on your clinical environment. Although doctors in universities, community health centres, and hospitals can all work under the salary model, only a small number of physicians actually do.
The fee for services model is much more common in Canada, and even those working under a salary or payment plan will mostly likely still need to submit FFS claims to their province’s Ministry of Health – although these claims won’t be reimbursed for payment (because you’re paid directly), they’re still used for administrative purposes and typically use the same FFS codes as they would if you were being paid directly for the time. In this case, it’s best to ask your employer for details, since it can vary based on where you work.
Taxes
While salaried doctors in Canada do get the regular benefits of employment – like automatic contributions to the Canada Pension Plan (CPP), Employment Insurance program (EI), medical/dental coverage, disability coverage, and paid leave – very few doctors in Canada earn their income this way. Since the majority of doctors in Canada are self-employed, you will be responsible for keeping track of your own income throughout the year and estimating your taxes accordingly.
Just like a small business, you’ll need to keep track of your income from all different sources over the course of the year (including anything you’ve earned in your home country) using either a tracking spreadsheet or an accounting software like Quickbooks.
Like other businesses, you’ll also need to keep track of any expenses you incur on the job – like how many miles you’ve travelled in your car, the cost of your malpractice insurance, any any portion of the office rent, furniture, or equipment you pay for. At the end of the year, you’ll need to provide this information to your accountant as well set up an account with the government to pay your tax bill. International doctors should also keep track of the number of days you were in Canada in your first year as well as any moving expenses, since moving partway through the year can impact the amount you pay in taxes.
In general, calculating your taxes as a blanket percentage of every paycheque will allow you to plan ahead for anything unexpected. You can get an idea of how much to take by using a simple income tax calculator. Keep in mind that Canadians have to make mandatory CPP contributions as well, so make sure to budget these into your plans in order to avoid any unexpected bills at tax time.
As a physician in Canada, you’ll be in control of your earnings based on where you live, the type of medicine you practice, and the number of patients you see. While your hours and vacation might depend on how busy your practice is or the needs of your employer, Canada’s billing model for doctors is inherently flexible – which means that no matter where you’re coming from, there’s no better time to make the move.
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