Many nurse practitioner entrepreneurs find themselves needing additional provider support about 2 years into their entrepreneurial journey. This is good! It means your niche side practice has grown beyond your wildest dreams and you are tapped out on time and energy. Not only this, but you also might have discovered the awesomeness of passive income. Bringing on another nurse practitioner to your practice will free up your time and it will put passive income cash into your pocket! It is a win win.
But how do you pay this person? How do you setup this arrangement?
Don’t worry too much about this, it is a piece of cake!
First off, you will want to pay this individual as a 1099. MOST states will allow you to pay a provider as a 1099 contractor (some regulatory heavy states don’t though, such as California, so talk with your accountant). The stipulation is that this individual is working for you in an “as needed” capacity and does not have regular hours. Additionally, the individual is not salaried and their term with you is defined in a contract. If the provider will have a set schedule, be salaried, have benefits, and you are controlling what they do, then they are a W2 employee, and you will need to set them up as such. The good news though, is that a contracted nurse practitioner for your practice will be working autonomously and in an as needed basis vs. being there a set number of hours a week which means they qualify as a 1099 in most cases.
Why does this matter? EMPLOYMENT taxes. The employer (YOU) is not responsible for paying employment taxes on a 1099 contractor. Essentially, this saves the employer (YOU) money. For this reason, you want to utilize the 1099 position for your nurse practitioners. You cannot get away with this for your receptionist though. If you are audited, you will have to pay back employment taxes up to 3 years… So, just stick with the 1099 position for your nurse practitioner.
With that out of the way, you will want to define their employment structure. This is what I recommend for the nurse practitioner niche practice:
Have them work on an as needed basis and pay them strictly production.
This is how you do it:
- Have them be a 1099 first and foremost.
- Have them sign a 1099 employment contract. If you need one, email me email@example.com.
- Set up their payroll through your bookkeeping software or have your accountant do it. It is super simple; you literally just issue them a check/direct deposit monthly. That is it. The 1099 contractor is responsible for paying their taxes. This is not your concern.
- Pay them strictly production. I either pay the nurse practitioners a percentage of production or a flat rate. The nurse practitioners working at my men’s health practice make $100 for initial consults and $50 for follow up. It is VERY lucrative for them. They can easily clear $150 an hour.
- Let them work on their time and just schedule patients when they are available.
- Cover their malpractice if you have the extra income. A part-time policy for a nurse practitioner through CM&F group or Berxi shouldn’t be much more than $1,500 for the year. If you don’t have the cash, then require them to carry their own policy and MAKE SURE your LLC is named as an endorsement on it. Make them show proof to you of that.
That is practically it. There is nothing to it. Obviously, you will want to do your due diligence and do a background check and verify their licensure, but that is another topic and one I will cover in more detail in the Elite NP Human Resources for Small Practices course I am developing. Not sure on the ETA for that, hopefully by the end of year…
That is it folks. Don’t complicate it. Post an ad on Indeed or ZipRecruiter looking for a part-time nurse practitioner and then begin to go over the flood of CVs you will get since we are suffering from market saturation. Interview a few of the top nurse practitioners who have experience and fit your job description. Bring them on board as a 1099, pay them monthly, and watch your freedom increase and a passive income stream develop. You will never regret bringing on another nurse practitioner to help you see patients. I guarantee that.