Production-based pay structures have become increasingly common in veterinary practices across the country. For many associate veterinarians, this model offers the potential for higher earnings—if structured fairly. But for others, unclear contract terms, unrealistic expectations, or shifting clinic policies can lead to confusion and under-compensation.
At Mahan Law, we review veterinary employment agreements nationwide and help associate vets understand how production pay really works—on paper and in practice. This article breaks down current trends in production-based compensation and how a contract review can help you protect your income.
What Is Production-Based Compensation?
Production-based compensation—sometimes referred to as “pro-sal” (a combination of production and salary)—ties a veterinarian’s earnings to the revenue they generate. Typically, you’ll see one of the following models in an employment agreement:
- Straight salary: A fixed annual income with no bonuses or commissions.
- Pro-sal hybrid: A base salary plus production bonuses after meeting a certain threshold.
- Straight production: No base pay; income is entirely based on production (less common and riskier for the vet).
In production-based models, the percentage paid to the veterinarian is often calculated using either:
- Gross production: Total revenue generated by the vet.
- Net production: Gross production minus costs, such as medications, lab fees, or write-offs.
National Compensation Trends for Veterinarians
The average base salary for full-time veterinarians in companion animal practices was approximately $119,000, with many earning more under production-based models.
Other trends include:
- The median total compensation for veterinarians (base salary plus bonuses) in private practice reached $125,000 in 2023.
- In many veterinary contracts, when production‑based pay is used, the percentage is often between 18% and 25% of gross (or total billings), especially in straight production or pro‑sal hybrid arrangements
Key Clauses to Watch in Production-Based Contracts
At Mahan Law, we regularly review veterinary employment agreements for production-based pay. Here are some common problem areas we flag for clients:
Ambiguity in Production Calculations
Is it based on gross or net revenue? Are inventory costs deducted? If the contract doesn’t define these terms clearly, your monthly paychecks could be lower than expected.
Delayed Bonus Payouts
Some agreements state that bonuses are paid quarterly or even annually, which may create cash flow challenges or reduce the vet’s leverage if they plan to leave.
Charge Attribution Rules
Are you credited for follow-up visits, tech appointments, or walk-ins? If you’re only credited for initial exams, your production numbers may suffer.
Negative Accrual Policies
In some cases, vets who fall below their base salary during slow periods (e.g., holidays or clinic closures) may have to “make up” the difference before earning bonuses in future periods. This should always be disclosed—and ideally removed.
Restrictive Covenants
Non-compete clauses and non-solicitation terms often go hand-in-hand with production-based contracts. We help ensure they’re reasonable and legally enforceable in your state.
Frequently Asked Questions
What is production-based compensation for veterinarians?
Production-based pay ties your income to how much revenue you generate. You’re paid a percentage, typically 20–22%, of your gross or net production, sometimes in addition to a base salary.
What’s a fair production percentage in vet contracts?
The industry standard ranges between 20% and 22% of gross production. Net production percentages may be slightly higher to offset deductions. The key is clarity and fairness in how production is calculated.
Why should I have my veterinary contract reviewed?
Employment agreements can include ambiguous or one-sided terms, especially around pay. A legal review helps ensure you understand exactly how you’ll be compensated and protects your interests from day one.
Your Income Should Match Your Impact
Production-based compensation isn’t inherently bad, but it is complex. The key to success is knowing what you’re signing. Before accepting a new offer or renewing a contract, take the time to get a legal review.
At Mahan Law, we help veterinarians across the U.S. make informed career decisions by reviewing and negotiating contracts that reflect their true value. Whether you’re a recent grad or an experienced associate, we’ll help ensure that your pay structure supports your financial goals, not someone else’s bottom line. Contact us today for a consultation.