What Is Negative Accrual? How Time Off Can Shrink Your Production Checks
Updated: 1 day ago
Two weeks off, months to catch up
You finally take the trip. Two weeks, no appointments, no surgery schedule, phone mostly off.
Then you get home and look at your production report. Those two weeks show up as a hole, and every production check for the next few months goes toward filling it. By the time you've dug out, it's almost time to plan the next vacation.
Nobody made a mistake. Your pay plan did exactly what it was written to do. Somewhere in it is a sentence that says time you weren't producing follows you forward.
That sentence has a name: negative accrual. And it does more than cost money. It changes how veterinarians take time off.
I've heard it from associates over and over again: "I went on vacation, and all I could think about was all the money I was losing."
As a practice owner, I expect to think about the business while I'm away. Associates shouldn't have to.
Production pay usually means you're paid the greater of your base salary or a percentage of what you produce.
Negative accrual means any period where you fall short of base, like a two-week vacation, is carried forward and taken out of future production checks.
PTO pays your base while you're gone, but with negative accrual, the production you didn't do still counts against you.It's one of the most negotiable terms in a veterinary offer, especially before you accept.
A quick refresher: how production pay works
Most production-based pay plans pay you the greater of two numbers each period: your base salary, or your production rate times the revenue you produce. Produce more than your base covers, and the difference comes to you as a production check. Produce less, and you still get your base.
You'll often hear that production check called a bonus, but it isn't really one. It's a true-up of pay you've already earned through your own production.
Sidebar: Is it really ProSal? Production pay is often erroneously called ProSal. ProSal is a term coined by Mark Opperman for a specific structure with two pay periods each month.
The first paycheck is a forward on your future production check. The second is a true-up based on your actual production from the previous period.
Plenty of pay plans that pay "the greater of base or production" work differently, so it's worth knowing which one you actually have.
So what is negative accrual?
It's what happens to the periods where you come in under base.
Without it, a short month is simply a short month. You're paid your base, and the next month starts fresh. With it, the shortfall is written down as a debt, and your future production has to pay it off before you see another production check.
Meet two doctors with identical years. Both earn a $120,000 base, which is $10,000 a month, at a 20% production rate. That means each doctor has to produce $50,000 in a month before 20% of production covers the base. We'll call that the production threshold. Both normally produce $55,000 a month, and both take two weeks off in July. The only difference is one sentence in their pay plans. These numbers are hypothetical.
How to read the table: each month, 20% of production is compared with the $10,000 base. Dr. A is paid anything above base, and a short month simply resets. Dr. B has to pay back any shortfall before getting another production check.
Month | Production | Threshold | 20% of production | Monthly base | Dr. A's production check (resets monthly) | Dr. B's production check (carries forward) |
Jun | $55,000 | $50,000 | $11,000 | $10,000 | $1,000 | $1,000 |
Jul (2 weeks off) | $27,500 | $50,000 | $5,500 | $10,000 | $0 | $0, short $4,500 (carried forward) |
Aug | $55,000 | $50,000 | $11,000 | $10,000 | $1,000 | $0, $1,000 repays shortfall ($3,500 left) |
Sep | $55,000 | $50,000 | $11,000 | $10,000 | $1,000 | $0 ($2,500 left) |
Oct | $55,000 | $50,000 | $11,000 | $10,000 | $1,000 | $0 ($1,500 left) |
Nov | $55,000 | $50,000 | $11,000 | $10,000 | $1,000 | $0 ($500 left) |
Dec | $55,000 | $50,000 | $11,000 | $10,000 | $1,000 | $500 (last $500 repaid) |
Total | $6,000 | $1,500 |
Where does the $4,500 come from? In July, Dr. B produced $27,500, which is $22,500 under the $50,000 threshold. 20% of that $22,500 gap is $4,500. That's how much more the base paid than 20% of production would have, and with negative accrual, it becomes a shortfall Dr. B owes back.
Same doctor-hours. Same patients. Same vacation. Dr. B doesn't see a full production check again until December, and takes home $4,500 less, exactly the size of the July shortfall.
Slow seasons and new grad ramp-up periods create the same problem. But vacation is where veterinarians feel it most, because it turns time off into something you pay for later.
Try it with your own numbers
Before you scroll, take a guess: how much do you think a two-week vacation really costs you? Then plug in your base, your production rate, and a typical month, and flip negative accrual on and off.
If you're a new grad, try the "New grad ramp-up" pattern too. Building a client base takes time, and that first year is when negative accrual can do the most damage.
Can you spot it?
Here's the tricky part: pay plans almost never use the words "negative accrual." The same idea hides behind phrases like "offset," "reconciled," or "year-to-date." Test yourself on five sample sentences.
Phrases that usually mean a shortfall carries forward:
Production pay is calculated on a cumulative or year-to-date basis
Prior shortfalls must be recovered, offset, or reconciled before a production check is paid
Base salary is described as an advance or draw against production
Overpayments can be recovered from PTO, future pay, or a final paycheck
If the wording is unclear, ask the employer to answer one question in writing: does a shortfall reset each period, and if not, when?
Three more places shortfalls hide
When you resign. We regularly hear from veterinarians who are about to give notice and find out they still "owe" production from months ago. Before you resign, look at how your pay plan handles an open balance and whether it can come out of your PTO payout or final check.
When your practice is sold. If a corporate group buys your hospital, your agreement may be transferred to the new owner. Ask whether any existing shortfall carries over or whether the balance starts fresh under the new owner. It's an easy detail to miss in a busy transition.
In the production threshold itself. Here's a quick math check: divide your annual base by your production rate. That's the yearly production you need to break even. A $150,000 base at 20% means you need $750,000 a year, or $62,500 a month. If your plan sets a higher monthly threshold before production pay kicks in, ask why. Sometimes it's because production is measured on gross revenue, or because of how pay periods are counted, and the gap can quietly raise the bar.
Myth vs. reality
"I have PTO, so vacation doesn't affect my pay." PTO pays your base while you're away. But with negative accrual, the production you didn't do while you were gone becomes a shortfall that comes out of future production checks.
"I'm a good doctor, so I'll always be above base." Production depends on more than skill. Vacation, CE days, a short-staffed month, or a schedule heavy on wellness visits can all pull a strong doctor under base.
"Every offer has it, so there's no point asking." In our benchmark database, about 1 in 5 offers carry shortfalls forward. Most don't, which means it's far from a given.
"If I leave, the shortfall disappears." Not always. Some pay plans recover what's owed from unused PTO or your final paycheck.
This is one of the most negotiable terms we see
Negative accrual is very damaging for veterinarians, and it's also very negotiable. In our experience, when you know what to look for, what to ask for, and how to ask for it, negative accrual can usually be negotiated out.
Common requests include:
Removing negative accrual entirely, so each period stands on its own
Excluding PTO and CE days, so approved time off never creates a shortfall
A reset each month or quarter, so one short period doesn't follow you all year
A grace period of 6 to 12 months while you build a client base
No recovery of shortfalls from PTO or your final paycheck
The best time to ask is before you sign
Production terms often show up first in the offer letter, before the full employment agreement arrives. That's when you have the most leverage, and it's the best moment to have someone look at the numbers with you.
Want to take your vacation without doing the math? A compensation evaluation compares your offer to real offers in our benchmark database and translates the terms into dollars. Negotiation coaching then helps you ask for better terms, including getting negative accrual out, with confidence.
Know a classmate or colleague who's about to sign? Send them the simulator. It takes two minutes and might save them a summer of digging out.
Compensation evaluations and negotiation coaching are not legal advice and do not create an attorney-client relationship.
Frequently asked questions
Is negative accrual the same as ProSal? No. Production pay is often erroneously called ProSal, but ProSal is a specific structure with two pay periods a month: a forward on your future production check, then a true-up. Negative accrual is a separate feature that can appear in many kinds of production pay plans.
Does PTO count against me with negative accrual? It can. PTO usually pays your base while you're away, but you produce nothing, so a plan with negative accrual may record that time as a shortfall. Ask whether approved time off is excluded.
Does negative accrual mean I owe my employer money? It usually means future production checks are reduced until the shortfall is covered. Some pay plans also recover it from PTO or a final paycheck, so check how yours handles leaving.
Can I negotiate negative accrual? Yes. It's one of the most negotiable terms in a veterinary offer. Removing it, excluding PTO, a reset period, or a first-year grace period are all common requests.
This article and the tools on this page are for general educational and informational purposes only. They are not legal advice or attorney advice. Reading this article, using these tools, or contacting us does not create an attorney-client relationship. For advice about your specific legal situation, consult a licensed attorney in your state.
Comments