Newly graduated optometrists embarking on their first year of clinical practice can potentially make a wide starting salary range depending on their practice modality and professional goals. Some new grads already have job opportunities waiting for them, while others prefer additional training through residency in a particular discipline(s). In this article, we’ll explore a broad overview for optometrists’ salaries based on practice modality, geography, and clinical experience.
ODs in Residency
The new grad OD opting to pursue a residency program can expect to earn anywhere between $34,000 and $64,000 depending on their specific program, discipline, and location. The higher paying programs are typically in more rural settings such as Indian Health Services throughout the southwest. The majority of new grad ODs who do not pursue residency usually opt for private practice or commercial settings like Pearle Vision, Lenscrafters, Target, and Walmart. Other avenues for employment directly out of school include some OD/MD practices, correctional settings, consulting, or even becoming an expert witness in malpractice cases. In most cases, practicing community health or hospital based-optometry does require optometrists to be residency trained (i.e. pediatrics, low vision, or ocular disease).
ODs in Volunteer Optometric Services to Humanity/International® (VOSH)
As a quick side note – another non-traditional career opportunity for new grads is through a 1-2 year commitment with VOSH Corps. This program seeks to develop the optometric profession in other countries, usually requiring new grads to be proficient in a foreign language while teaching in academic and clinical settings. This program typically pays $34k-$43k/year with additional stipends for housing and travel.
ODs in Corporate Optometry or Private Practice
New grads seeking to work in private or commercial practices can expect to earn anywhere from $40 to $50 per hour ($90k-$100k/year), depending on how busy the location is. Periodic bonuses are also possible based on optical sales or patient volume and can be discussed accordingly. If you are in one of these modalities, and you feel you have worked toward a raise, CovalentCareers has some tips on how to ask for that raise as an OD!
New grads must also be cognizant of other expenses pertaining to their career and factor these into their overall compensation package. This includes paid vacation/sick time, health insurance, malpractice insurance, and retirement planning (i.e. 403b, 401k). Remember to look at potential job opportunities from all angles, not simply the hourly rate or salary. Also, keep in mind that some job opportunities may require an after-hours call schedule or certain quotas for optical sales/patient volume. While this is acceptable and realistic in some settings, it can become stressful and lead to burnout in others.
Understanding the difference between a W2 Employee and a 1099 Independent Contractor
While some employment opportunities may seem attractive on the surface, especially independent contractor positions, new grads will soon find that after paying for their own malpractice policy, health insurance, and any additional social security/medicare taxes, that their $70/hour position really is closer to $60/hour. The White Coat Investor blog recommends that 1099 doctors earn at least 10% higher than they would as a W2 employee, in order to cover the aforementioned expenses.
While 1099 contractors are able to take additional tax deductions such as mileage and/or home office expenses, in the end, these 1099 job opportunities may actually pay less than an employed position. Be sure to compare your prospective employment opportunities appropriately based on how you will be paid, including any benefits and consult a Certified Financial Planner if you need more in-depth assistance and really want to understand the key differences. We spoke to CFP Adam Cmejla and CPA Gary Topple to help us break down what each opportunity means.
OD Salary Surveys from Review of Optometry and American Optometric Association
According to a 2017 survey in Review of Optometry, average salaries for ODs have continued to grow over the past several years. There is a direct correlation between years in clinical practice and higher earnings. Over 75% of the 500 respondents were either satisfied or very satisfied with their salaries, and there is a tendency for self-employed optometrists to make higher salaries ($109,000-$248,000) when compared with employed ODs ($111,000 – $143,000). This income gap between self-employed and employed optometrists is beginning to close, however. This gap may become less significant in the near future as private practice optometrists continue to see decreasing reimbursements from vision plans as well as face increased competition from online optical sales and telemedicine. In most cases, optometrists employed in hospital/community health settings are dealing more frequently with medical insurance plans with higher reimbursement rates.
Another 2016 income survey from the American Optometric Association showed similar results, with optometrists earning an average net income of $140,913, up from $129,385 shown in a previous AOA survey from 2012.
The highest paid OD’s were either in private (owner) or corporate practice settings($172,491 and $124,727, respectively). Optometrists in multidisciplinary settings (i.e. community health/hospital-based) came close behind with an average income of $122,845. Based on geography, optometrists in the south and southeast also tended to earn higher salaries on average.
Sometimes new grads can get excited to “see a lot of ocular disease” at a local private, commercial, or OD/MD practice, only to find they’re expected to exclusively refract 20+ patients per day instead.
Regardless of the job opportunity, it is important to put everyone’s expectations into a written employment contract, and we have some tips for negotiating a better contract and better starting salary for you. This can include pay, benefits, vacation time, patient-care hours, and allotment for CE time, everything should be in writing. Otherwise, new grads will be surprised when their prospective employers suddenly couldn’t fill their schedule for the day and are politely asked to take the day off (without pay).
Unfortunately, any opportunity where your prospective employer refuses to put things into a written contract is likely not the employment opportunity for you. While there is no right or wrong mode of practice, new grads need to have a solid understanding of the pros and cons of each modality and employment structure – from a clinical, business and income-tax perspective. There is nothing wrong with committing to numerous part-time opportunities to see what works best for your personal and professional goals.
It is also important to remember that most new grads’ first job opportunity may not be their last. Even though we’ve all had a diverse exposure to various clinical settings as third and fourth year students, the exposure may continue after graduation. It is not uncommon for new grads to periodically change practice modalities or geographical locations prior to finding their dream job and ultimate career path.
Taking all things into consideration, aside from just the hourly rate or salary, will better help you obtain your true dream job and ideal lifestyle.