“I’m in my final year of orthopedic surgery residency and will do a one-year fellowship (I finish July 2026). I’m in the early phases of talking to potential employers, many of which say they could offer a stipend as I finish my training. Do you have any advice on how a stipend should be optimally structured?”

Stipend secrets: Navigating your final year of residency

As you approach the final stretch of your residency, you’re probably juggling many big decisions. Finding the right job, navigating stipend offers, and preparing for the future can feel like a lot—especially when you’re still in the thick of training. I get it—this is the phase when everything you’ve been working for starts coming together. But with that excitement comes many decisions, and one of the most critical is navigating job offers and stipends as you approach fellowship or your first attending role.

While stipends aren’t as common as they used to be, many future employers may offer them, especially for physicians signing contracts a year or more in advance. While a stipend can provide a welcome financial boost during your final year of training, it’s essential to understand the potential nuances and risks involved.

Signing early: is it really the right move?

While receiving early offers can be exciting and validating, signing a contract too far in advance can limit your options. Most residents begin interviewing for jobs between August and December and receive offers from October to March. While some prefer to sign contracts 6-10 months before graduation, others may benefit from waiting to see the full range of opportunities available.

Before you commit, ask yourself if this is the job you want. Research the employer and the job market in the area. If you’re 100 percent sure, go for it. But don’t rush into anything just to secure a deal.

What is a stipend?

A stipend is a payment, often a salary or allowance, provided to individuals for a specific purpose or period. In the context of medical residency and fellowship, a stipend is typically a fixed amount of money paid to the trainee during their program.

How does it differ from other bonuses?

• Signing bonus: a one-time payment offered upon signing a contract, often intended to attract top talent.
• Commencement bonus: a one-time payment offered upon starting a new position.
• Retention bonus: a one-time payment or series of payments designed to retain employees or trainees.

Who typically offers stipends?

Future employers, such as hospitals or private medical practices, typically offer stipends as part of an early agreement to secure your employment once you’ve completed your training. These stipends are meant to provide financial support during your final year or fellowship and act as an incentive for signing the contract in advance. It’s important to note that these stipends come with conditions, often requiring repayment if you do not join the organization after your training.

Can I negotiate for a stipend if it’s not initially offered?

While it’s not guaranteed, it’s certainly possible to negotiate for a stipend. If you’re a strong candidate and the program has the resources, you can advocate for additional compensation successfully.

Unlocking the true value of a stipend—here’s what you should know

A stipend can make your final year of fellowship more comfortable financially, but make sure you understand how it’s structured and the long-term impact. Here are a few key things to watch out for:

• Repayment provisions: In all cases, the stipend comes with strings attached. If you don’t end up working for the employer after your fellowship, you might need to repay the stipend. Find out how this is handled—do they expect full repayment? Are there any conditions that could cause you to owe the money back? Will there be interest on any repayment?
• How the stipend is paid: Stipends can be distributed in various ways—monthly, quarterly, or as a lump sum. This might seem like a small detail, but it matters. A steady monthly payment could be easier to manage, while a lump sum might tempt you to spend more quickly.
• Impact on future salary: One important consideration is the potential impact of a stipend on your future salary. Unlike an advance typically repaid through future earnings, a stipend can sometimes be deducted from your initial salary as an attending. This can lead to a lower overall compensation package. Negotiating a fair starting salary that is not compromised by any stipend received during training is essential.

What about the future?

Another crucial aspect of your contract is the long-term impact on your compensation. Right now, the orthopedic surgery market may look great, but who knows what it will look like when you finish your fellowship in 2026? The contract you sign today must protect your earning potential and provide flexibility if the market shifts.

What the Contract Diagnostics team has to say:

Dr. Kathryn, MD: “Consider the timeline and specialty market”

“As a physician, I always tell my colleagues to think long-term. Two years might seem short, but the orthopedic surgery market could shift when you complete your fellowship. Locking into a contract too early might limit your options later. Remember the timeline, and ensure your compensation aligns with your future market value.”

Laura, J.D.: “Evaluate the repayment terms carefully”

“When reviewing stipend agreements, one of the most overlooked clauses is the repayment provision. I’ve seen many physicians face financial hardships because they weren’t aware of the repayment terms if they changed their minds. Always ensure you fully understand what happens if you decide not to join the organization or leave early. It’s crucial to clarify repayment obligations upfront.”

Pete, J.D.: “Ensure your stipend doesn’t impact future salary”

“It is great seeing physicians getting offers one or even two years before finishing training. I know how good it must feel to finish training without the stress of the job search weighing on you. When they sign the contract for a year or two, physicians need to know that they are committing to starting with the employer. I have seen physicians come back to me three months before their expected start date, wondering if they can consider this amazing job offer that is closer to home and pays more than the job they are to start. So when signing early, remember this and make sure you, after doing your due diligence, are confident that this is the job you will want one or two years later.”

Anu, J.D.: “Review the legalities of non-compete clauses”

“Early stipend agreements often include non-compete clauses that can be restrictive. In some cases, I’ve seen physicians sign contracts that significantly limited their ability to negotiate other offers down the line. Having a lawyer review these clauses is critical to ensure they don’t prevent you from exploring other opportunities, especially as the market or your needs change.”

Selena, J.D.: “Don’t ignore the benefit of negotiation”

“Negotiation is an integral part of any physician employment agreement. Often, money is left on the table, which you don’t want to miss out on. To ensure you get the best offer, you need to understand where the offer falls relative to current market rates. An attorney can help you better understand the market to strategize an effective counteroffer.”

Wrapping up

Early offers with stipends are great, but they’re not without risk. Ensure you fully understand the terms, repayment provisions, and how they affect your compensation. This is one of the most critical moments in your career, so take the time to get it right.

Remember, knowledge is power. Arm yourself with the information and legal guidance to navigate this evolving situation confidently.

Jon Appino has been the driving force behind Contract Diagnostics since 2011, where he leads a dedicated team on a mission to empower physicians with the knowledge, tools, and confidence to negotiate robust employment contracts and secure the best compensation packages. With over a century of collective experience, the CDx team is a paragon of field expertise. With over 25 years of diverse health care experience, Jon leads this seasoned team of professionals. From Pete’s 20+ years to Anu’s 25+ years, complemented by Jillian and Laura’s 10+ years each, our team boasts a wealth of knowledge. This remarkable tenure is further fortified by the skills and backgrounds of our other team members, including Kathryn Sarnoski, MD, and Jan Schmitz, director of operations. Their combined experience ensures that Contract Diagnostics offers the most seasoned and insightful guidance in physician compensation.

Discover more of Jon’s perspectives on physician compensation by exploring the Contract Diagnostics blog or connecting on social media platforms like LinkedIn, Facebook, YouTube, and Instagram.

The Contract Diagnostics team offers comprehensive consulting services tailored to physicians and their families, addressing employment contracts and compensation structures. Our expertise spans contract physician compensation, schedules, benefits, and more.

Our mission is to establish a central resource where physicians can access information, consulting, and coaching to navigate the intricacies of employment contracts and compensation structures, ensuring equitable remuneration.

Questions? Feel free to reach out to us via our website or at 888-574-5526.