If you’re moving for your first physician job after residency training, you are very likely going to get some form of relocation compensation. Learn which expenses are usually included and take note of some of the wrinkles that could be involved.
In its 2024 Review of Physician and Advanced Practitioner Recruiting Incentives, AMN Healthcare found that the average relocation allowance for physicians is $11,284. The review is based on a sample of the more than 2,100 permanent physician and nonphysician provider search engagements that AMN Healthcare’s Physician Solutions division conducted from April 1, 2023, to March 31, 2024.
Leah Grant, president of the AMN Healthcare Physician Solutions division, formerly known as Merritt Hawkins, said conventional assumptions about relocation bonuses need to be reevaluated.
“So much has changed in the health care landscape post-COVID, especially with so many new groups entering the health care space,” Grant said. “This includes relocation compensation.”
What’s covered?
Whereas in years past employers would often reimburse new hires for their relocation expenses up to a maximum negotiated number, many have chosen to simplify the process.
“Employers are looking to provide a white-glove experience,” Grant said. “Many already have a group that they partner with for relocation. So when you sign your contract, you're not doing the legwork of finding the company that's going to relocate you. Instead, they tell you you're going to partner up with company X, who will contact you to coordinate things. This has cut a lot of the minutiae, including bringing back receipts.”
Expenses that an employer is likely to cover include:
- A moving company.
- A house-hunting trip to find lodging in a new location.
- Transportation to the final destination.
- Packing and unpacking services.
- Temporary housing.
If you own a home, some costs associated with selling it may be reimbursed. But assistance with selling a home—or a practice buying a candidate’s home to resell it—is very uncommon in the physician job market, Grant said.
You may get less due to your age
Residents tend to own less, so their moving expenses may be lower than those of more senior physicians. But Grant advises against trying to work the difference between your actual expenses and the maximum offered by the employer into another form of compensation, such as the signing bonus.
“The best advice I can give to individuals is to let that go. This is still your future employer. You are still building a relationship with them,” she said. "The last thing any employer wants is to feel nickel-and-dimed, because then they'll feel like you're just coming for the compensation and not for the passion of practicing medicine. It's not really worth battling over $2,000, $3,000, $4,000, especially when you consider all of the other incentives that you're probably going to obtain by joining the practice.”
Dive deeper:
- Should you expect a signing bonus in your first job after residency?
- Physician contracting: What to look for in pay, benefits
- Finding a lawyer to review your physician employment contract
- To know whether physician job pays enough, assess goals, values
- What to ask when physician employers start talking compensation
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Moving expenses are taxable
Companies will either reimburse an employee based on their receipts or work directly with a vendor, such as a moving company. For now, because of provisions from the 2017 Tax Cuts and Jobs Act, that payment is considered taxable income. But that law expires in 2025, so keep an eye out for changes to the tax code.
“If your employer pays for, say, $10,000 in relocation expenses, you’ll be on the hook for a chunk of that when taxes are withheld from your paycheck,” Grant said. “So you might want to ask them to gross-up that number to cover your tax liability.”
Relocation without strings attached
Another recent change in the compensation landscape is that, while it used to be common for an employer to pay for relocation only if the employee committed to staying at the practice for a minimum length of time, Grant said her firm hasn’t seen that recently.
“They're going to tie retention to your signing bonus way before they tie it to the relocation bonus,” she said. “If you see that in the offer, I would negotiate it, especially if you're relocating your family. Don't get me wrong, if you end up having a relocation expense of $20,000, they may expect you to stay on for at least a year, because that's a pretty hefty amount. But I would say anything up to $10,000 in today's industry is standard. Just be mindful of the terms. I think anything beyond a year can become tricky.”
The AMA Transitioning to Practice series has guidance and resources on deciding where to practice, negotiating an employment contract, managing work-life balance, and other essential tips about starting in practice.
