Coffee and Contracts: Upfront dollars and repayment

Physician employment contracts frequently include upfront compensation such as signing bonuses, relocation allowances, and student loan repayments, which can range from $1,500 to over $200,000. These payments serve as recruitment inducements but almost always carry strict repayment provisions if the physician leaves before a defined period, typically one to five years. Forgiveness structures vary significantly, with some balances amortizing monthly or quarterly, while others require full repayment—potentially with interest—if the term is not completed. Critical variables influencing these obligations include the specific reason for termination, such as death, disability, or "for cause" versus "no cause" departures. Understanding whether a bonus is paid upon contract execution or the first payroll is essential for managing tax implications and 401k withholdings. Physicians must evaluate these "blessings" against the long-term service obligations and potential financial "curses" of early contract termination.