Dentist Side Practice & Locum Work
Maximize income from additional clinical opportunities
Side Practice Opportunities
Many dentists supplement primary employment with side income: locum work (fill-in dentistry at $800-$1,200/day), weekend or evening shifts at secondary practices ($300-$500/shift), specialist consulting or referrals ($200-$400/hour), teaching or continuing education ($150-$300/hour), expert witness or insurance assessments ($250-$400/hour). The Canadian Dental Association (CDA) provides guidance on locum arrangements and professional practice standards.
Side income provides financial flexibility, accelerates debt repayment ($20K-$40K/year extra toward student loans), builds emergency reserves, and diversifies income sources. However, requires strategic tax planning, time management, and professional liability coverage considerations.
Financial Considerations
Tax Structure & Incorporation
Incorporate side practice income through professional corporation if earning $50K+/year. Defer personal tax by keeping income in corporation (11.5% corporate vs 53% personal tax rate). Pay yourself salary or dividends strategically based on total income. Deduct business expenses: malpractice insurance, travel, CE courses, equipment. Understanding CRA business expense rules maximizes deductions.
Incorporation saves $15K-$25K/year in taxes on $50K-$100K side income. Setup cost: $1,500-$3,000 and annual accounting: $2K-$4K but worthwhile for ongoing tax savings.
Income Reporting & GST/HST
Track all income and expenses meticulously using accounting software. Register for GST/HST if side income exceeds $30K annually (charge tax, claim input credits). Issue proper invoices with GST/HST number. Quarterly tax installments required if owing $3K+ annually. Keep receipts for all deductible expenses: insurance, travel, equipment, supplies, CE costs.
Poor record-keeping triggers CRA audits and penalties. Invest in bookkeeper ($100-$200/month) or accounting software ($40-$60/month) to maintain compliance and maximize deductions.
Insurance & Liability Coverage
Ensure malpractice insurance covers all practice locations and activities. Locum work may require additional coverage ($2K-$4K/year). Verify primary employer's insurance doesn't exclude side practice income. Consider umbrella liability coverage ($1M-$2M for $300-$500/year). Disability insurance should cover all income sources, not just primary employment earnings.
Inadequate coverage exposes personal assets to lawsuits. Review insurance annually with broker to ensure complete protection across all professional activities and income sources.
Time Management & Burnout Risk
Side practice income averages $20K-$60K/year (10-20 hours/month additional work). Balance financial benefits against burnout risk and family time. Set boundaries: maximum 1-2 extra shifts/week. Schedule strategically around rest and family commitments. Evaluate regularly: is extra income worth stress and reduced personal time for your situation and goals?
Many dentists reduce side practice after achieving specific financial goals (debt payoff, down payment, emergency fund). Use as temporary accelerator rather than permanent lifestyle to maintain work-life balance.
Sample Side Practice Income Structure
Primary Employment Income
Side Practice Income (Through Corporation)
Side income through corporation saves $12K-$18K/year in taxes compared to personal income, accelerating debt repayment and wealth building
Strategic Use of Side Income
Accelerated Debt Repayment
Direct 100% of side income toward student debt ($250K-$400K) or practice acquisition debt. Pay off student loans 3-5 years faster, saving $30K-$60K in interest. Build equity in practice purchase more quickly, reducing risk and increasing net worth faster than peers without additional income streams.
Practice Purchase Down Payment
Save side income in corporate holding company for practice purchase down payment (20-30% = $100K-$300K). Earn $30K-$50K/year side income for 2-3 years to accumulate down payment while maintaining primary employment income for living expenses. Reduces borrowing needs and qualifies for better financing terms from lenders.
Investment & Wealth Building
Once debt-free, redirect side income to investments through corporate account. Tax-efficient growth at corporate rates (50-52% vs 53% personal). Build $200K-$500K investment portfolio over 5-10 years of side practice income. Provides financial security, retirement savings acceleration, and eventual passive income to reduce clinical work requirements in later career.
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Side practice income provides significant financial opportunities when structured properly. Strategic tax planning and smart allocation can accelerate your financial goals.
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