Doctor (Physician) Salaries – Not as High as You Think

Once upon a time, when I was still in junior high school, I aspired to be a doctor.  Why?  For all the wrong reasons.  First, because my parents wanted me to be one, and second because it was a profession that made a lot of money.  Fortunately, after doing some research in high school about what’s required to be a doctor, I realized that being a doctor is not about the money, it’s about the passion for practicing medicine.

It takes real commitment to be a physician.  To become a specialist, it takes at least a decade of training/education, long hours, low pay, and a large amount of loans (for some) to finally make it to the big leagues.  Even once you’ve graduated, most specialties require long hours along with periodically being on call.

Back to the topic at hand, doctor salaries.  When most of you think about doctor salaries, most think that they are paid like rock stars.  There are some numbers thrown around like some make $500,000/year and more, which is true for some, but not for all.  While the initial figures are high, doctors have to pay a rather large overhead fee which doesn’t include income tax.  This overhead fee includes insurance coverage, a provincial government fee and other misc expenses.

Below is a table that is a bit dated (2005), but includes the average salaries of various doctor specialties in Canada.  I added a third column to the original table to include the overhead as a percentage of their salary.

Gross and net earnings rose in 2005
Gross Net Overhead
Dermatologists $360,000 $240,000 33.0%
Internists $310,000 $200,000 35.5%
Ob/gyns $320,000 $195,000 40.4%
Pediatricians $250,000 $160,000 36.0%
Psychiatrists $190.000 $160.000 15.8%
GPs $260,000 $155,000 40.4%

As you can see from the table, the average doctor pays around 35% of their salary to overhead fees.  What’s left over is then taxed at the highest income tax rate.  Mind you, making a $155,000+ salary (in 2005) is pretty darn good, but for the work and time commitment that doctors put in, they deserve more.

Back to you, was your impression that doctors make more than they actually do?

Any doctor readers out there?  Have doctor salaries increased much since 2005?

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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7 years ago

If it was an easy job everyone would be a doctor. Truth is, it is very difficult getting accepted to medical school, getting through medical school and practicing medicine. Most people have no idea how complicated the practice of medicine really is. Doctor’s deserve every cent they make!

8 years ago

I know these numbers are old but they are flawed. I know first hand a busy oncologist in Toronto will take home close to 1 million with no overhead (i.e. they work out of a cancer centre). Lots of money but well deserved.

It pays to go to school folks.

8 years ago

Doctors can reduce taxes by incorporating. Well, it is actually sheltered within the corp. where one can invest in stocks (sometimes real estate…), etc. and let it grow compound free like a giant RRSP. They can also deduct expenses, cars, fees, etc. to write it off against taxes.

8 years ago

Regarding bonuses, a northern Ontario town (Rainy River) had posted last year for a family med Doc and the total compensation was like $550k or something if the doc signed on for two years.

HealthForceOntario has a program that pays ER docs to go to small towns in need and pays them an extra $150/hr ( on top of the base of $180 approx) plus $600 driving there and $600 driving back (over 4 hours). Thus a 12 hour shift in North Bay, one could $5000 for one day. They will also put you up in the hotel for free.

Pretty good work if you can get it..

8 years ago


Marks are important but you should check very carefully what each Cdn med school allows, etc. For example, some may only look at your top 3 years, allow you to throw away a year and some may allow you to retake some courses (take bird courses) to bump up your grades. For example when my wife was applying UWO allowed you to have some retakes, etc.

So all is not lost but basically you do need to have very good marks and if you get to an interview and you have a few bad marks you have to maturely explain. If you just finished your first year, maybe consider taking a summer course that you can ACE!

Getting into Cdn med school take 3 things: Marks, MCAT, Story
if you have good references/connections that also helps
What I mean by story is are you well balanced, leadership skills, travel abroad, volunteer work, languages, sports achievements, music ,etc. In my wife’s class there were some seriously talented people.

Regarding int’l schools, Canada residency programs to take a few residents from int’l programs. However, there are very few spots but if during med school in say Grenada or Ireland you come over and do some rotations in some specialites and make connections with staff it can be done. We know a guy who was Cdn, med school in UK and got the one ENT spot for an int’l student at UOttawa.

My thoughts are that the UK route is not good because it’s too long. Their residency/program takes many years and then you would come back to Canada and do another residency. best bets are Ireland, Caribbean or the USA. CAribbean schools aren’t looked up in great light but if you go and then start clerkship in the US (as they do) and then get a few interships, shadows back in Canada at a couple of different University than you have a chance. First though, I would keep tring for Canada.

8 years ago

As far as I understand, it’s $100k paid in two parts, book-ending the 3-year contract.

I’m sure there are a few creative ways to drastically reduce taxes on that sum.

Perhaps a mental shift is in order for people who are “disappointed” at receiving tens of thousands of dollars in ‘bonus’ money instead of a hundred thousand. :)

8 years ago

SST: while a $100k bonus is great many people forget about the taxes associated with it. I have a friend (not a doctor) who got a $100k bonus as part of his companies annual bonus program. This equalled his salary per year. He was ecstatic at first but then got the actual payment and was disappointed to see it was about half that amount. I didn’t ask the exact number but he was disappointed.

Don’t get me wrong, a $100k bonus is awesome, but anyone who gets that definitely won’t take home anywhere near that original amount.

8 years ago

I know of a person who is going to med school somewhere in the Caribbean. Same level/quality of education, but I believe it is one year less of schooling than US/Canadian unis.

A recent development from the government of British Columbia which offers a $100,000 signing bonus for a 3-year contract to practice in a rural setting.

Something to think about.

8 years ago

Very interesting article. I’ve been spending about 3 hours reading through it and I found a lot of useful information (the arguments between engineers and doctors were irrelevant in my opinion). I’m an undergraduate student approaching the end of my first year, about to decide what to specialize/major/minor in. This article could really help an undergraduate student, or any student wishing to pursue a career in medicine, since it offers information regarding the type of lifestyle and path to a medical career through the viewpoints of many different knowledgeable people. After reading this article I know that I still want to become a Medical Doctor and have reinforced my confidence in knowing I am following in the right path. However unfortunately my marks have not been stellar first year, so I’m concerned about my chances of getting into a Canadian medical school and have begun considering international medical schools (i.e. in the U.S. or Caribbean). Can anyone shed some light on one’s actual contingency of practicing as a physician in Canada if a degree is earned internationally? Any help would be appreciated. Thank you.

8 years ago

Figures on doctors’ incomes are from gross billings not their reported income on personal tax returns. The numbers are before overhead, malpractice, professional organization dues or any other costs come off. Most doctors employ at least 2 additional individuals. Incorporation does work for those doctors who have excess income after expenses as a way of deferring taxes but eventually taxes have to be paid. There is no free lunch. Do people really think that the government would let someone pay the small business corporate tax rate and then let them take the money out later with no additional tax owing? Incorporation is a tax deferral tool that itself costs several thousand dollars a year to set up and according to the OMA is only useful to doctors with 70k+ in excess earnings over what it costs them to live. Many doctors aren’t able to take advantage of incorporation because they either don’t have a high enough net income or do but get caught up in a lifestyle that forces them to spend too much money on the personal side.

Also, I don’t think the income of radiologists represents the reality for almost all other doctors. They work in an environment where they often have many people doing work for them but to whom they don’t have to pay salaries. Overheads are very low or zero and patient volumes are very, very high.

Many current medical students are running up debts for school in the 200k range after undergrad and medical school. Residents are not paid enough to get out from under this debt before finishing their 3-8 year postgraduate training. I would say that the estimate made above about $0 net income for 13 years is the reality for many if not most medical trainees these days.