Your contract says $400K. Your bank account says otherwise. Here is exactly where the money goes for 12 physician specialties in 2026.
Physician salary after taxes by specialty for 2026. See actual take-home pay for 12 specialties after federal tax, FICA, and state taxes with real calculations.
A cardiologist signs a contract for $550,000. After federal income tax, FICA, Medicare surcharges, and state taxes, the actual deposit hitting their checking account each year is closer to $340,000 to $408,000. That is a gap of $142,000 to $210,000 that vanishes before they ever see it.
Every physician knows taxes are significant. Very few know exactly how significant. The difference between a pediatrician in Texas and a cardiothoracic surgeon in California is not just a salary gap — it is a fundamentally different financial reality shaped by marginal tax brackets, FICA thresholds, and state tax policy.
This analysis uses 2026 projected federal tax brackets (married filing jointly with standard deduction), current FICA and Medicare rates, and representative state tax rates to calculate what physicians in 12 specialties actually take home. No hand-waving. Real math.
Before we get to the specialty-by-specialty breakdown, you need to understand the three distinct layers of taxation that hit a W-2 physician's paycheck. Each layer has its own rules, thresholds, and quirks.
The 2026 projected federal income tax brackets for married filing jointly (assuming TCJA extension) are:
| Taxable Income Range | Marginal Rate |
|---|---|
| $0 – $23,850 | 10% |
| $23,851 – $96,950 | 12% |
| $96,951 – $206,700 | 22% |
| $206,701 – $394,600 | 24% |
| $394,601 – $501,050 | 32% |
| $501,051 – $751,600 | 35% |
| Over $751,600 | 37% |
The standard deduction for married filing jointly in 2026 is projected at approximately $31,300, which reduces your taxable income before the brackets apply. Every physician reading this is in at least the 24% bracket. Most are in the 32% or 35% bracket. A handful hit 37%.
Critical distinction: your marginal rate (the rate on your last dollar) is not your effective rate (the average rate across all your income). A neurosurgeon earning $825,000 has a marginal rate of 37% but an effective federal rate of roughly 26%. This distinction matters enormously for tax planning.
FICA is the tax that almost nobody talks about, but it hits hard:
Combined FICA for a physician earning $550,000: approximately $21,593. This is on top of federal income tax, and there is no deduction to offset it.
This is the variable that creates the largest swing in take-home pay. Nine states levy zero income tax: Texas, Florida, Tennessee, Nevada, Wyoming, South Dakota, Alaska, New Hampshire, and Washington. At the other extreme, California's top marginal rate is 13.3%, and New York City residents face a combined state and city rate above 12%.
For a physician earning $550,000, the state tax difference between Texas and California is roughly $66,000 per year. Over a 25-year career, that is $1.65 million — before accounting for investment growth on the savings.
The following table calculates after-tax take-home pay for 12 physician specialties using 2026 projected compensation data, married filing jointly with standard deduction, and W-2 employment. The two right columns show take-home in a zero-tax state versus a high-tax state (using ~12% effective state rate as a proxy for California or New York City).
| Specialty | Gross Salary | Federal Tax | FICA | Eff. Rate | Take-Home (No State Tax) | Take-Home (High-Tax State) |
|---|---|---|---|---|---|---|
| Cardiothoracic Surgery | $1,200,000 | $357,000 | $37,000 | 32.8% | $806,000 | $662,000 |
| Neurosurgery | $825,000 | $218,000 | $28,000 | 29.8% | $579,000 | $480,000 |
| Orthopedic Surgery | $703,000 | $174,000 | $25,000 | 28.3% | $504,000 | $420,000 |
| Cardiology | $550,000 | $121,000 | $22,000 | 26.0% | $407,000 | $341,000 |
| Dermatology | $475,000 | $96,000 | $20,000 | 24.4% | $359,000 | $302,000 |
| Radiology | $425,000 | $80,000 | $19,000 | 23.3% | $326,000 | $275,000 |
| Anesthesiology | $425,000 | $80,000 | $19,000 | 23.3% | $326,000 | $275,000 |
| Emergency Medicine | $375,000 | $68,000 | $17,000 | 22.7% | $290,000 | $245,000 |
| Psychiatry | $300,000 | $50,000 | $16,000 | 22.0% | $234,000 | $198,000 |
| Internal Medicine | $290,000 | $48,000 | $15,000 | 21.7% | $227,000 | $192,000 |
| Family Medicine | $265,000 | $42,000 | $15,000 | 21.5% | $208,000 | $176,000 |
| Pediatrics | $245,000 | $37,000 | $14,000 | 20.8% | $194,000 | $165,000 |
Assumptions: Married filing jointly, 2026 projected brackets with TCJA extension, standard deduction of $31,300, W-2 employment, no pre-tax retirement contributions, single earner. High-tax state uses a blended effective rate of approximately 12%. Your actual situation will vary based on filing status, deductions, spouse income, and specific state.
A cardiothoracic surgeon earning $1.2M keeps between $662K and $806K. A pediatrician earning $245K keeps between $165K and $194K. The gross salary gap is 4.9x. The after-tax gap narrows to 3.4x–4.1x. Progressive taxation compresses the spread, but not as dramatically as many assume.
To show exactly how this math works, let us walk through the full calculation for an emergency medicine physician earning $375,000, married filing jointly.
Step 1: Taxable income. Gross salary of $375,000 minus the standard deduction of $31,300 equals taxable income of $343,700.
Step 2: Federal income tax. Apply each bracket to the corresponding slice of income:
| Bracket | Income in Bracket | Tax |
|---|---|---|
| 10% | $23,850 | $2,385 |
| 12% | $73,100 | $8,772 |
| 22% | $109,750 | $24,145 |
| 24% | $137,000 | $32,880 |
| Total Federal Tax | $68,182 | |
The effective federal income tax rate is 18.2% — far below the 24% marginal bracket this physician sits in.
Step 3: FICA. Social Security (6.2% on the first $176,100) = $10,918. Medicare (1.45% on all $375,000) = $5,438. Additional Medicare (0.9% on $125,000 above the $250K threshold) = $1,125. Total FICA: $17,481.
Step 4: Combined federal burden. $68,182 + $17,481 = $85,663, for a combined effective rate of 22.8%.
Step 5: State taxes. In Texas or Florida: $0. In California (effective rate ~11% on this income): approximately $41,250. In New York State plus NYC: approximately $37,500.
Result: Take-home ranges from $289,337 in a no-tax state to approximately $248,000 in California. The difference: $41,000 per year, or about $3,420 per month.
State taxes are the single most controllable variable in a physician's tax picture. Unlike federal brackets, which apply uniformly, state taxes are a function of where you choose to practice. Here is what a $425,000 salary (radiology or anesthesiology) looks like across five different states:
| State | State Tax Rate | State Tax Owed | Total Take-Home |
|---|---|---|---|
| Texas / Florida | 0% | $0 | $326,000 |
| Illinois | 4.95% | $21,000 | $305,000 |
| Massachusetts | 9.0% | $38,000 | $288,000 |
| New Jersey | 10.75% | $42,000 | $284,000 |
| California | ~12.3% | $51,000 | $275,000 |
The same radiologist takes home $326,000 in Houston or $275,000 in San Francisco. That $51,000 annual gap compounds dramatically over time. Invested at a 7% real return over 25 years, that annual savings difference grows to approximately $3.2 million in additional wealth.
This does not mean everyone should move to Texas. Compensation in zero-tax states is sometimes lower (though physician salaries show less geographic variation than many professions). Cost of living, spouse career opportunities, family proximity, and quality of life all matter. But every physician should understand the magnitude of this lever.
The calculations above cover the big three — federal income tax, FICA, and state tax. But several additional tax provisions disproportionately affect physician incomes:
An additional 3.8% tax on investment income (interest, dividends, capital gains, rental income) for married couples with modified AGI above $250,000. Nearly every physician triggers this on their non-retirement investment returns. On a portfolio generating $50,000 in annual investment income, that is an extra $1,900 per year.
While the SALT (State and Local Tax) deduction cap of $10,000 remains a significant constraint under the current TCJA framework, physicians in high-tax states are hit hardest. A California physician paying $51,000 in state taxes can only deduct $10,000 of that against federal income — leaving $41,000 in double-taxed income.
The average medical school debt of approximately $210,000 is repaid with after-tax dollars. A physician in the 32% marginal federal bracket plus a 10% state rate needs to earn roughly $362,000 in gross income to generate the $210,000 needed to pay off their loans. That is a hidden 72% markup on the face value of the debt.
The Alternative Minimum Tax remains relevant for physicians exercising incentive stock options (ISOs) or with large state tax deductions. While TCJA raised the AMT exemption amounts, physicians in the $500K+ range with significant ISOs should model AMT exposure before exercising.
Tax planning is one of the few areas of personal finance where the return on effort is both large and guaranteed. Here are the strategies that create the most after-tax value for physicians, ranked by impact:
The 401(k) or 403(b) limit in 2026 is $23,500 ($31,000 if over 50). For a physician in the 32% federal bracket plus 5% state, that $23,500 contribution saves approximately $8,700 in taxes this year. If your employer offers a 457(b), you can contribute an additional $23,500 on top of that. This is the single highest-impact move available.
Physicians almost always exceed the income limits for direct Roth IRA contributions. The backdoor Roth strategy — contributing to a traditional IRA and immediately converting — allows $7,000 per person ($8,000 if over 50) in annual Roth contributions. The tax savings are not immediate, but the decades of tax-free growth on those contributions are substantial.
If you have a high-deductible health plan, the 2026 HSA family limit is approximately $8,550. HSAs are triple tax-advantaged: deductible going in, tax-free growth, and tax-free withdrawals for medical expenses. For physicians who can afford to pay medical expenses out of pocket and let the HSA grow, this is the most tax-efficient account in the entire tax code.
As shown above, practicing in a zero-income-tax state versus a high-tax state can produce $30,000 to $150,000 in annual tax savings depending on specialty. This is not a strategy for everyone, but for physicians who are geographically flexible — particularly early in their career — the compounding effect over a full career is extraordinary.
Systematically selling losing positions to offset gains (and up to $3,000 of ordinary income per year) reduces your investment tax bill. For a physician with a $2 million taxable portfolio, disciplined tax-loss harvesting can save $5,000 to $15,000 per year, depending on market conditions and portfolio turnover.
If you give to charity, bundling multiple years of donations into a single year through a donor-advised fund (DAF) pushes you above the standard deduction threshold, converting what would have been non-deductible giving into a meaningful itemized deduction. Donating appreciated stock directly avoids capital gains tax entirely.
Physicians who earn any 1099 income — locum tenens, expert witness fees, consulting — should consider a solo 401(k), which allows up to $69,000 in total annual contributions (or $76,500 if over 50). Combined with an S-corp election to manage self-employment tax, this can shelter a substantial portion of side income. However, the administrative complexity means this only makes sense above approximately $30,000 in annual 1099 income.
A physician earning $425,000 who maximizes 401(k) contributions, executes a backdoor Roth, funds an HSA, and practices disciplined tax-loss harvesting can realistically reduce their annual tax bill by $15,000 to $25,000 compared to a physician who does none of these things. Over a 25-year career, that is $375,000 to $625,000 in additional after-tax wealth — before compounding.
After-tax income matters, but it is not the whole story. Two physicians with identical take-home pay can have vastly different financial outcomes based on three variables:
Savings rate. A family medicine physician earning $265K gross who saves 30% of take-home will build wealth faster than a cardiothoracic surgeon earning $1.2M who saves 5%. The math is unforgiving: $208K take-home with a 30% savings rate means $62,400 invested annually. That beats the surgeon's $40,300 (5% of $806K) every single year.
Time to first dollar invested. The average physician begins earning attending-level income at age 33-35. They have roughly 30-32 years until a traditional retirement at 65. That is a shorter compounding runway than most high-income professions, which makes the savings rate in the first five attending years disproportionately important.
Lifestyle inflation control. The transition from a $55,000 resident salary to a $300,000+ attending salary is the single most dangerous financial moment in a physician's career. Every dollar of permanent lifestyle inflation during that transition is a dollar subtracted from the savings rate for the rest of your career. The physicians who build the most wealth are the ones who expand their lifestyle slowly over 3-5 years, not overnight.
The goal is not to maximize gross income. The goal is to maximize the gap between after-tax income and after-tax spending. That gap, invested consistently, is the entire engine of physician wealth building.
The average physician salary of roughly $350,000 results in take-home pay between $240,000 and $275,000 depending on filing status and state of residence. In a zero-income-tax state filing married jointly, the effective combined federal and FICA rate is approximately 22-23%. In a high-tax state like California, an additional 10-13% in state taxes drops take-home into the low $240,000s. These figures assume W-2 employment with only the standard deduction.
Cardiothoracic surgery leads with estimated after-tax take-home pay of $650,000 to $807,000 on a gross salary of $1.2 million. Neurosurgery follows at $480,000 to $579,000 on a gross of $825,000. However, these top earners face the steepest marginal rates: every additional dollar above $751,600 in taxable income is taxed at 37% federally, plus state tax and the additional Medicare surcharge, for a combined marginal rate that can exceed 50% in high-tax states.
The highest-impact strategies in order: maximize 401(k)/403(b) contributions ($23,500 in 2026, $31,000 if over 50), execute backdoor Roth IRA contributions, fund an HSA if eligible ($8,550 family limit), and practice tax-loss harvesting in taxable accounts. Physicians with 1099 side income should explore solo 401(k) plans which allow up to $69,000 in total contributions. Geographic arbitrage — practicing in a zero-income-tax state — offers the largest single lever, potentially saving $30,000 to $150,000 annually depending on salary.
Physician compensation in 2026 ranges from $245,000 for pediatrics to $1.2 million for cardiothoracic surgery. After taxes, that range compresses to roughly $165,000 at the low end and $806,000 at the high end.
Three things matter more than most physicians realize:
First, the effective tax rate for most physicians is 21-33% (federal plus FICA), not the 32% or 37% marginal rate they often cite. Understanding this distinction prevents both over-pessimism and under-planning.
Second, state taxes are the single most controllable variable, creating swings of $30,000 to $150,000 per year. This is not a rounding error. It is a career-defining financial variable.
Third, the combination of maxed retirement accounts, backdoor Roth contributions, HSA funding, and tax-loss harvesting can realistically reduce your annual tax bill by $15,000 to $25,000 — wealth that compounds for decades.
Gross salary is the number on your contract. After-tax income is the number that determines your financial life. Know the difference.
See where you stand
Model your after-tax income and build a plan around the numbers that actually matter.
Try PhysicianWealth Free