American Academy of Physician Assistants

About Contracts

Terms and termination

The term, or length, of the contract, should include your starting date and the duration of the initial contract. Termination covers whether the contract can be terminated early if notice is given. Termination provisions are either "with cause" or "without cause."

Contract renewal

Every contract should include an option to renew or a provision to renegotiate based on a performance evaluation. Performance criteria should be included or attached to the contract.

Employee versus independent contractor

It is important to specify whether you are an employee or independent contractor. Your employer's responsibility for employment taxes and pension benefits will be affected.

Services to be provided

The area of medicine in which you practice and your duties and obligations should be clearly defined, including working times, sites and practice duties.

Credentials and privileges

The contract should specify the professional credentials, for example, NCCPA certification, that you must possess or obtain within a specified time. It also should specify whether you must apply for or obtain privileges at certain hospitals.


You can be paid a salary, an hourly rate, a percentage of fees billed or collected or salary plus bonus based on productivity. Terms should be clearly defined in the contract — not only the amount (and/or percentage of productivity income) but also the frequency of calculation and payment. Learn what other PAs in your area earn in AAPA’s Salary Report.

Malpractice insurance

Decide who will pay for malpractice insurance and whether you be listed on your supervising physician's policy or have your own. AAPA Insurance Services offers excellent coverage underwritten by an A++ rated company.

Fringe benefits

Typical benefits include vacation and education leave, travel expenses related to education leave, professional dues, licensure fees, hospital medical staff fees, books and professional journals, NCCPA fees, U.S. Drug Enforcement Administration registration fees, health insurance, disability, life insurance and retirement plans.

Sick leave and disability

The contract should specify if you will continue to be paid if you become sick or disabled, and, if so, for how long.

Purchasing into the practice

If you hope to buy into the practice eventually, the conditions of the buy-in and basic terms of purchase should be spelled out, usually in a separate letter of intent.

Restrictive covenants

A restrictive covenant, sometimes called a "noncompete clause," prohibits you from practicing in a given geographic area or given medical specialty after you leave a practice. This is usually for a defined period of time, often a few years after leaving the practice


Check that the contract specifies whether disputes between you and your employer will be settled by mandatory arbitration or in court, and whether the prevailing party will receive lawyer's fees and costs.

Contacts and Contracts

For more detailed information about the parts of a contract and what each entails, download our comprehensive guide, Contacts and Contracts.