How To Calculate A Physician's Real Income

Many doctors are afraid to hear the truth.

So I shall deliver the truth to you via my daily email lessons and my blog.

After all I know you’re afraid to actually contact me and set up your initial phone consultation to discuss your situation.

Gosh what could happen?

Could I help you develop a sound financial and investment plan and then help you implement that plan to move you closer to financial independence?

Why on earth would you want that?

If I’m wrong set up a time with me by clicking here:

Financial Consultation

OK, let’s do some math.

Today I was speaking to a physician colleague who is pretty frustrated with practicing medicine.

Seems like most physicians feel the same way these days doesn’t it?

He feels like his workload and the demand on his time keep getting bigger.

Basic economics tells us that when demand is high and supply is low, prices tend to go up.

Not for doctors though. Your pay tends to go down.


The basic laws of economics are broken.

This doctor said that his gross annual income is about $250,000.

He claims he works about 45 hours per week and takes 4 weeks vacation.

That’s 2,160 hours per year that he works -- which is about $115 per hour.

I then asked him, “How many hours per week on average do you spend staying longer than the normal work day because of the demands on your time?”

He said about 5 hours per week.

That’s 240 hours per year since he works 48 weeks per year.

What’s his hourly rate now?

It’s about $104 per hour.

“How many hours per month do you spend going to your medical practice and hospital meetings -- you know the ones where nothing is accomplished and are a waste of your time?”

He said about 5 hours per month.

That’s 60 hours per year.

His hourly rate is now down to $102 per hour.

“How much time do you spend driving to your job and back per day?”

He said about 1 hour per day.

That’s 240 hours per year assuming he works 5 days per week for 48 weeks per year.

Now his hourly rate drops to about $92 per hour.

“How much time do you spend with CME, licensing, and taking annual tests and concocting QA projects for board recertification?”

About 100 hours.

His hourly rate just dropped to $89 per hour.

He is now working 2,800 hours per year or about 58 hours per week for 48 weeks out of the year. That’s almost 12 hours per day for 5 days per week.

“How much taxes do you pay?”

He said if he combines Social Security taxes, Medicare taxes, and federal and state income taxes, they totaled about $75,000.

Now his after tax hourly rate is $62 per hour.

This hourly rate represents his real hourly rate. But it doesn’t even include other things like going to depositions when you’re sued, the anguish you suffer when you see a patient that threatens you, calls you take from home, and other medicine related time you spend.

What does this have to do with your finances?

If you’re busting your butt practicing medicine and you’re getting burned out, or if you’re doing just OK but you still have to work and can’t afford to stop or cut back, you’ve got to ask yourself how long you can continue doing this for $62 per hour.

I ain’t Nostradamus, but your real pay will likely go down as you spend more and more of your time to meet the demands of the medical machine which is controlling your every move.

What I want you to do is sit down and calculate your real hourly rate.

Most doctors just focus on their gross income for the year.

But that’s irrelevant.

Your income is only important in relationship to your time and the frustration required to obtain it -- and of course the satisfaction you get by doing the job you do. Unfortunately physician job satisfaction is low.

So take your income and then calculate out all of your “expenses” to get that income. Then come up with your true hourly rate.

If that number angers you, then you need to get your personal finances straightened out   so you don’t have to accept that rate later on if you don’t want to.

This will also be a good decision making tool when deciding whether you want to work that extra shift or take that extra call.

Is your real hourly rate really worth the extra work?

Hope above helps you.

Let me know what you think.

And if you want me to help you take your finances and investments to the next level quickly, just contact me by filling out the short form by clicking here:

Financial Consultation

Setu Mazumdar, MD, CFP®