In this article, we’ll be going over my home health physical therapist compensation package, but first let’s talk about wage stagnation. When I graduated PT school in 2014, the median wage for a PT was $74,713 with 6-figures out of reach for even senior therapists. Nearly 10 years later, the bureau of labor statistics records the median PT wage at $97,720 – still not quite $100,000/yr, but more attainable. However, given that $74,713 is now worth $95,512, the median PT salary has really just kept up with inflation.
Wage stagnation means that we need to be smarter about our career trajectory by evaluating the entire compensation package rather than just raw dollars per hour.
Before I go into my compensation package as a physical therapist in home health care, I’d like to share some background.
Background
The fear of inconsistent work during the 2020 COVID-19 pandemic pushed me to start my mobile PT practice. It wasn’t long before I asked myself how much I needed to earn to replace my full-time income. Suddenly, my salary became less relevant and I needed to look at my entire compensation package as a staff physical therapist.
Today, I will be breaking down my annual compensation as a home health physical therapist. If you want a summary, just scroll down towards the bottom.
Related: Can you earn 6-figures as a physical therapist?
Calculating Base Salary
It normally shouldn’t take much to calculate your base salary, but home health care uses a point based system and a quota instead of time based pay effectively causing you to do some math if you want to know how much you’re projected to earn at the end of the year.
My employer considers 1 point equivalent to 80 minutes of work per visit which includes travel time, scheduling and case management. 30 points (6 points/day) to be considered a 40 hour work week.
Currently, I earn $71 per point bringing my annual salary to $110,760 if I decide to work all 30 points per week and work. While I work anywhere between 23 and 30 points because I spend a portion of my work time in my mobile PT practice, for the purposes of this article, we will pretend I do 40 hours with my employer. That being said, here is my calculation.
Calculation: $71.00 x 30 points x 52 weeks
Total Value: $110,760
Retirement Contribution Match
Most companies PTs work for will have either a 401(k)/403(b) retirement plan depending on whether they are for profit or non-profit.
Regardless of what numbers and letters make up the name of your retirement plan, most employers will have access to a retirement plan and may contribute to your retirement. Employer contribution plans, if any, vary greatly.
My sister is a speech therapist for a school system and receives a 4% employer contribution regardless whether or not she contributions.
My wife is an occupational therapist for a big hospital system. She receives a tiered base match based on seniority with the company. It maxes out at 50% of her contributions up to 8% of her salary.
My younger brother works for a tech company and receives a match 100% of his contributions up to 7% of his annual salary. Meaning if he earns $150,000 and he contributes at least $10,500 (7% *150,000), they will match that $10,500 completely. Amazing I know.
Point being, this varies widely and it is important to know what your employers will match. If they do have a match, always find ways to contribute up to the match to take advantage of essentially free money.
My employer matches 33% up to 4% of my annual salary bringing the value of this to a pitiful $1,462.03. While it’s better than nothing, it’s lower than the average making it easier to negotiate for raises.
This means, I only have to contribute about $4,430.40 per year in order to get the full match.
Calculation for minimum needed for full match:
110,760 * 0.04 = $4,430.40
Employer match amount calculation:
$4,430.40 * 0.33 = $1,462.03
Total Value: $1,462.03
Related: Considerations before rolling over your 401k
Mileage reimbursement
My employer reimburses 50 cents on the mile. From speaking with colleagues working with other homecare agencies, it seems this benefit ranges from non-existent to the full government allowable amount of 65.5 cents per mile (2023).
At the current mileage reimbursement rate, I average $50 of travel reimbursement per paycheck which I get each week.
Calculation: $50 x 52 weeks
Total Value: $2,600
Of note, my employer’s mileage reimbursement rate is near 75% of current IRS allowable rate of 58.5 cents per mile in 2022. Since 2018 and until 2015, the IRS no longer allows you to deduct for unreimbursed employment expenses when itemizing your taxes.
Regardless, I was surprised to learn how valuable mileage reimbursement was to my benefit package. Move out of the way 401k, you are no MATCH for what I get from mileage reimbursement! Get it?
Cell Phone reimbursement
My employer gives me the option of using my personal cell phone or receiving a company phone. Some prefer more separation from work and life. I prefer getting my cell phone bill paid for and I likely needing to carry around more than 1 device. However, even for others who choose this option, it requires monthly submissions of expense reports which is a multi-step process that isn’t well documented for employees to follow. Therefore, many leave over $300 on the table each year.
Calculation: $30 x 12 months
Total Value: $360
Employer Healthcare Coverage Value
I was previously enrolled in the high deductible health plan and paid $11.31/week for medical, dental, and vision totaling only $588.12 annually! However, a couple of things to be considered for the purpose of why I am exploring my physical therapist compensation package. First, my situation has changed where I am on a family plan to cover both my wife and our newborn. Second, the amount my employer pays is a special group rate based on the number of employees needing coverage.
What I am paying now for this employer sponsored family health plan is $178.11/week totaling $9,261.72 per year.
Side note: If you’re curious at the cost of your employer-sponsors group health plan, check out your W-2 Form, Box 12, Code DD. The Affordable Care Act requires employers to report this number on your W-2 Form. This is how much your employer pays for your plan.
After looking up equivalent plans to cover my family if I was self-employed and it appears to be quite costly.
Dental PPO Preferred = $109.19
Healthcare = $1,183.95
Estimated Total monthly premium for both = $1402.33
Estimated Total Annual Cost = $16,827.96
This market place health care plan coverage is the closest to my current employer sponsored health care plan, but still not as good with a higher deductible by $5K, but interestingly lower OOP max by $4K
Considering I pay $9,261.72 per year towards my health insurance premiums, my employer saves me $5,912.40 which is the additional cost I would have to pay for equivalent plans if I was 100% self-employed.
Calculation: $16,827.96 – $9,261.72
Total Adjusted value: $7,566.24
Of note, this value actually went down since 2020 when this article was originally written. I’ll be curious to see the trend as I revisit this.
Overtime Compensation or Time and a half:
I have not seen a Physical therapist compensation package with much overtime availability likely due to low profit margins. Currently, my employer does not have overtime benefits. However, if our caseload exceeded what we could reasonably complete during the week and overflowed into the weekend, we would be paid out at 1.5x our normal visit rate. We will also be paid out at 1.5x our visit rate during our assigned weekend rotations. We are mandated to work at least 1 weekend every 2 months. When paid at time and a half, it’s the equivalent of 15 points.
15 point equivalent * 6 weekend cycles = 90 points
90 points * $71/point = $6390 more per year
Adjusting for pure OT benefit at 1.5x visit rate
$6,399 *0.33
Total Value: $2,128.79
If any employer mandates weekend rates without 1.5 payout, I wouldn’t take that position. That being said, most employers offers this and while it could be a financial benefit, it may not be a benefit for your work-life balance.
Paid Time Off:
I feel fortunate that the company offers 3-4 weeks of paid time off. My employer groups their sick leave and vacation in the PTO bank and they have separate the holiday bank which is different from at least some other employers I worked with in the past.
In addition to knowing how your PTO bank is broken up, you want to know the accrual rate. Some companies may simplify their PTO accrual to monthly or quarterly. My employer pays my PTO weekly based on the number of hours I work.
My employer uses a PTO accrual rate of 0.0762/hr. At 40 hours a week, I would accrue 3.048 hours per week
Most people including myself take at least 1 week off during the year, so we’ll account for that in this section.
PTO annual accrual = 51 work weeks * 3.048 = 155.45 hours of PTO
But we need to add back the amount of hours required to work on the weekend which totals to be 80 hours a year
Adjusted PTO annual accrual = 53 work weeks * 3.048 = 161.54 hours of PTO
My effective hourly rate is $53.25 ($71 per point x 0.75) due to my employer’s hourly point value of 80 minutes per point.
Value Calculation: $53.25 hourly rate x 161.54 annual PTO hours
Total Value: $8,602.05
Holiday Pay
Typically, most companies will recognize the standard 6 holidays:
- New Year’s Day
- Memorial Day
- Independence Day (4th of July)
- Labor Day
- Thanksgiving Day
- Christmas Day
In the last couple of years, my employer also added Easter, giving us 7 paid holidays bringing my annual holiday pay compensation to $2,681.7
Calculation: $71 x 6 points (8 hours) x 7
Total Value = $2,982
Covid Sick Fund
I’ve been exposed twice despite safety measures at work. Fortunately, the first time I was negative and seems to have been coincidental with an asthma event and possibly a cold. The second time, I was positive along with the rest of my house hold. This covid-sick fund would obviously not be available if I was 100% self-employed. Both exposures, I’ve been out a week. It has a maximum payout of $1,400 per week which is under what I would earn if I was approved to work, but it’s much better than nothing.
Total Value: $1,400
Equipment Reimbursement:
Usually I go through 2 BP cuffs, 1 Pulse Oximeter, and 1 thermometer per year. My employer will reimburse for the costs once I submit the expense report. My 2021 and 2022 covered expenses averaged to be $150.
Total Value: $150
Worker’s Compensation Insurance
I almost forgot about work comp, which came in handy when my wife tore her a labrum while lifting a patient. It’s not required for employers to carry worker’s compensation insurance in some states, but most employers will have this benefit to protect both themselves and you.
In the event of a workplace injury, you’ll get your medical bills covered along with a percentage of your wage, usually 60% – 66% of your pre-injury wage. In my state, worker’s compensation insurance costs are estimated to be between $1.00 to $1.99 per $100 of payroll depending on the nature of their employees’ work and the risk of injury. Since I don’t know where PT falls on their risk spectrum, I will just estimate employer rate at $1.50. Which is something I would likely have to purchase myself annually to protect myself from being put out of work from a workplace injury
Calculation: ($110,760/$100) x $1.50
Total Value: $1,661.40
My Physical therapist compensation package summary
Base Salary: $110,760
Paid Time Off: $8,602.05
Health Care Coverage adjusted value: $7,566.24
Mileage reimbursement: $2,600
Holiday Pay: $2,982
Retirement Contribution Match: $1,462.03
Overtime/weekend rate: $2,128.79
Worker’s Compensation Insurance: $1,661.40
Cell Phone reimbursement: $360
Equipment reimbursement: $150
Covid Sick fund: $1,400
Total Compensation package value = $139,672.51
My total compensation package as a staff physical therapist working in home health care is $139,672.51 which has increased from $117,652.35 back in 2020.
Discussion
Financial experts estimate that employee benefits are usually worth approximately 30% of their base salary. For me, it looks to be closer to 26%.
This brings me back to the primary reason for calculating my entire compensation package. It means that my business would need a net profit of nearly $140,000/yr before I could replace my income. This is completely achievable provided I see all my patients myself and receive enough referrals to see have at least 25 appointments per week, all paying at minimum of $110/visit which is the avg Medicare + supplement rate in my area. The difference here between full-time employment and self-employment is that the latter is scalability and has a higher income cap if I’m the treating therapist, but all not without inherent risk. Also, who says I can’t explore other business ventures with higher profit margins?
Regardless, this information does put things in perspective in appreciating what I have and when creating a transition plan from full-time employment to self-employment. For now, I’ll continue enjoying the security of the 9-5 HH job while building side-income.
If you’re looking to increase your income by transitioning to home health, check out my course information here where I teach people to earn $120 – $160K in low to mid cost of living areas to $200+ in high cost of living areas.
