Doctors invest years of education, training, and financial resources to reach their professional goals. While their earning potential is high, many factors—such as taxes, insurance, and other expenses—significantly impact their take-home income. Understanding how much doctors make after taxes and insurance can help medical professionals make informed financial decisions.

Average Physician Salaries Before Deductions

Physician salaries vary depending on specialty, location, and experience. According to recent reports, the average annual salary for physicians is:

• Primary Care Physicians: $250,000 – $300,000

• Specialists: $350,000 – $500,000+

• Surgeons & High-Earning Specialties: $500,000 – $1,000,000+

While these figures seem substantial, a significant portion is deducted for taxes, insurance, and other expenses.

Average Physician Salaries Before Deductions

Physician salaries vary depending on specialty, location, and experience. According to recent reports, the average annual salary for physicians is:

• Primary Care Physicians: $250,000 – $300,000

• Specialists: $350,000 – $500,000+

• Surgeons & High-Earning Specialties: $500,000 – $1,000,000+

While these figures seem substantial, a significant portion is deducted for taxes, insurance, and other expenses.

Tax Implications for Physicians

Physicians fall into the highest federal income tax brackets due to their high earnings. Here’s an overview of tax obligations:

• Federal Income Tax: Physicians in the top tax bracket pay up to 37% on a portion of their earnings.

• State Income Tax: Varies by location, ranging from 0% (e.g., Texas, Florida) to 13.3% (California).

• Self-Employment Tax: Physicians who run their own practices pay 15.3% in self-employment taxes.

• Payroll Taxes: Employed physicians contribute to Social Security (6.2%) and Medicare (1.45%), with an additional 0.9% Medicare surtax on earnings over $200,000.

Example Tax Breakdown

A specialist earning $400,000 per year might pay:

• Federal Income Tax: $100,000 – $120,000

• State Tax (Assuming 5%): $20,000

• Medicare & Payroll Taxes: $10,000 – $15,000

Total tax liability: $130,000 – $155,000, leaving a post-tax income of $245,000 – $270,000.

Cost of Insurance for Physicians

Doctors must also account for multiple types of insurance, including:

• Medical Malpractice Insurance: Ranges from $4,000 to $50,000+ per year depending on specialty and location.

• Health Insurance: Premiums average $5,000 to $12,000 annually for individuals and higher for families.

• Disability Insurance: Costs 1-3% of income, typically $5,000 to $15,000 per year.

• Life Insurance: Term life policies typically cost $500 to $2,000 annually

Example Insurance Breakdown

A cardiologist earning $400,000 might pay:

• Malpractice Insurance: $20,000

• Health Insurance: $10,000

• Disability Insurance: $10,000

• Life Insurance: $1,000

Total insurance costs: $41,000, reducing take-home pay to $204,000 – $229,000 after taxes and insurance.

Additional Expenses for Physicians

Beyond taxes and insurance, doctors often incur additional financial obligations:

• Student Loan Repayments: Many doctors carry six-figure debt, with monthly payments ranging from $1,000 to $4,000+.
• Retirement Contributions: Physicians contribute to 401(k)s, IRAs, or other investment accounts.
• Practice Expenses: Self-employed doctors cover office rent, staff salaries, and operational costs.

Final Take-Home Pay Estimate

While salaries for doctors are high, after considering taxes, insurance, and additional expenses, the actual take-home pay is significantly lower. Here’s a rough estimate for a specialist earning $400,000:

• Post-Tax Income: $245,000 – $270,000
• Insurance Costs: -$41,000
• Student Loan Payments (if applicable): -$36,000 ($3,000/month)
• Retirement Contributions: -$30,000

Final take-home income: $138,000 – $163,000 per year

Conclusion

Physicians earn strong salaries, but their net income is significantly impacted by taxes, insurance, and other financial obligations. Understanding these deductions allows doctors to plan effectively, optimize savings, and protect their financial future. For those looking to maximize their financial security, investing in a strong disability insurance policy can provide essential income protection in case of illness or injury. If you’re a doctor considering disability insurance, request a free quote today to secure your income.