What does this partnership buy-in cost?
Show the math (medium confidence)
Inputs and assumptions
- The price is your input, not an appraisal; no valuation is computed here.
- The income delta is the practice's number for partner income minus your current net, after tax and costs.
- The share figures are head-count arithmetic, not a valuation.
- Track lengths of 2–5 years are the common range from adviser commentary; the practice's own track governs.
Formulas and sources appear beside each result below.
Rules and sources: Partnership track lengths of 2–5 years from adviser commentary, checked 2026-10-22; the arithmetic is on the numbers entered.
A $150,000 buy-in at a $40,000-a-year partner-income delta is recouped in about 45 months (3.8 years) of the higher income; financing adds $40,168 in interest over the term.
What's at stake
- Payback
- 45 mo
- buy-in price $150,000 ÷ ($40,000 a year ÷ 12)
- Track length
- 3 yr
- the payback outlasts the track (3.8 vs 3 years)
- Financing
- $2,264/mo
- $40,168 total interest at 7% over 84 months, on the standard loan formula.
- Share of the practice
- 12.5% → 10%
- Arithmetic on head count. What a share is worth is a valuation question this tool does not answer.
The strongest case for change
The payback (3.8 years) outlasts the 3-year track, so the first years of partnership income would still be covering the price. Whether the price reflects what the practice holds is a question for its valuer; what the buy-in documents actually transfer is a question for counsel; the tax treatment is a question for a CPA. The answers decide this, not the arithmetic.
Questions to settle first
- The buy-in documents: what is being sold (equity, assets, goodwill), and what happens to it on exit.
- The tax treatment of the buy-in with a CPA: what is deductible, what is amortized, what is not.
- What leaving costs after buying in — the exit terms the same contract sets. Exit terms in the checker