Medical Resident Salary
Do residents get paid during residency? The short answer is yes, residents do get paid.
The average salary for a resident in the United States is around $64,000. Likely, you will not get $64,000 in your first year of residency. Usually, 45 to 50 is an average amount in your first year out of your internship. It can increase over time because you’ll be able to do more things as your training moves on. And then certainly, if you’re in fellowship, it will be more than that, or likely more than that, simply because you’ll be able to do more things. It will be frustrating when you break down your hourly rate as a resident.
Ways to Make More Money Outside of Residency
If you make $64,000 a year and you’re working 70 hours a week, you’re working for somewhere between 20 to $25 an hour, which is very likely less than the RNs working in the hospital or healthcare network or wherever you’re working.
Now, there are ways of making more money outside of residency, and let’s talk about that next if you have followed the proper steps, work, locums, or moonlighting during residency. It is also specialty-dependent. It will depend upon the state’s licensing requirements where you complete your residency. Most states will give a full license to a physician once they’ve at least completed their PGY-1 and they’ve completed the steps of the USMLE. In that scenario, most states will grant a license.
Residents’ Locum Tenens Position
Others will require the resident to complete a second or third-year residency before they grant a full license. But with that license, if you have taken those steps, it will allow you to do, as I said before, locums or mood lighting. If you don’t know what those are, a locum tenens position is a fill-in where a hospital or hospital network will need a particular specialty to meet the requirements.
Maybe if they’re a Level I trauma center or something like that, they would need someone in your specialty. And so, they’ll bring them in on a short-term basis. It’s not a long-term position and is usually paid as an independent contractor. And that is a way of making a decent amount of money quickly.
Earning Pay by Moonlighting During Residency
Moonlighting is more of filling in for private practice. If you’re in internal medicine and could work urgent care on the weekend, I would consider moonlighting. That certainly is not a locum. Those are two things that you could do.
Telemed certainly has significantly increased since COVID hit in the spring of 2020. And so, there are very likely Telemed opportunities. Once again, specialty-dependent, but that might be something you want to investigate. There are many Telemed companies where if you get on their panel, you can log in, and there’s just a queue of patients that need assistance. And all you need to do is log in, hit whoever is in the line, see a few patients, log off, and that’s it. That might be another opportunity to make a little bit more money.
The first statement that you’re probably thinking is, well, great. I only have a little time to do these things. Yes, that’s true. You have a huge time commitment as a resident or fellow, and doing any locums or moonlighting work will be difficult. But if you need the money, you can make four or five times your hourly rate as a resident. And it can add up quickly, even one day a week.
However, if you can find one of those Telemed jobs that allow you to log in on your own time, see as many patients as you want, and then log off, that is usually ideal. Because if someone is home at night and has an hour or two to kill, there might be a way of making some quick money.
Residents Get Paid: Resident Salaries
Now, regarding the employment classification during residency, you make a salary, but you are considered an employee. And so, the employer will take FICA taxes for Social Security and Medicare out of that.
A Supreme Court case in 2011 guaranteed that all medical residents would be classified as employees, not students. If you were classified as a student, then you likely wouldn’t have to pay FICA. But in this case, the Supreme Court has rendered a decision. Therefore, all residents are considered employees. So, yes, medical residents do get paid. The average salary is around $64,000 in residency.
It will be a little bit less when you start, could be a little bit more when you’re finished. It’s also specialty-dependent. And then, you have some opportunities to do outside work if you have completed the USMLE and the number of years of training required by the state that you’re looking to get licensed.
A few states have training permits, which would most likely not allow you to do any outside activities until you get fully licensed. But the best way to do this is to check with the medical board where you’re training and see the requirements. Then, you can plan accordingly if you want to get to the point where you can do some work outside the residency program.
Medical Residents are Employees, Not Students
Is a medical resident considered a student or an employee?
When you come out of med school, you have your first internship year, then you transition into residency, and you will get paid a salary, albeit a small one. Many residents still determine the tax classification once they enter residency and fellowship. So, let’s discuss that today.
There was a Supreme Court case in 2011 called Mayo Foundation versus the United States. And essentially, in that case, the Supreme Court found that medical residents are employees, not students. Therefore, their salary will have taxes deducted, so the FICA includes Social Security and Medicare.
Residents Tax Classification
Now, as most of you are reading this blog are either a resident or a fellow; you understand that you usually work 50 to 80 hours a week. Your base compensation is not commiserated with the time you spend working. So, any amount of money that one can save is significant. It may change anytime, but the employer will take FICA taxes from your salary.
So, let’s talk about the different classifications in employment and why it matters to the physician. You are either an employee or an independent contractor when you are working. And when you get out of training, you’ll have the decision to make as far as if you’re going to pursue a job with one or the other.
Let’s talk about the benefits of both.
Tax Benefits for Resident Employees and Independent Contractor
As an employee, taxes are subtracted from it, but you will benefit from having a lot of ancillary things provided to you. As an employee, you will receive health, vision, dental, disability, and life. They’re going to pay for your underlying premium for your malpractice insurance. They will provide you with potential productivity incentives, moving expenses, and signing bonuses.
When you’re an independent contractor, generally, you won’t get any of those things. There are a few independent contractor jobs where they will pay the underlying premium for your malpractice insurance, but everything else will be on you. So, as an independent contractor, you’ll get paid in amount, and the employer will take no FICA taxes out of it. You will not get any health benefits. They will not pay for your dues and fees, board, DEA, credentialing, and privileging—it will all be on the physician.
Now, why would you do one over the other?
Ideally, the independent contractor relationship allows some more flexibility than being an employee, meaning you can work for multiple organizations as an independent contractor. Whereas, as an employee, almost every employment contract will have exclusivity or prohibited outside activities. The employer will have veto power if you want to work for another organization while employed with them. Most of the time, organizations are okay with moonlighting, and locums work if it doesn’t interfere with your day-to-day activities for that employer.
Employment after Residency Training
If I had to say what is better, anyone coming out of training is unlikely to enter multiple independent contractor relationships. It would help if you built up the network when you leave training. Nine out of 10 people enter employment classified as an employee. There are a few specialties that are more likely only to offer independent contractor opportunities.
So, for whatever reason, anesthesia and dermatology use independent contractor agreements much more liberally than any other position. Now, if you work for a hospital or hospital network, you’re always going to be an employee. You’re not going to work as an independent contractor. The only time you’d work as an independent contractor, or a better way of saying that is the organizations that offer these, are usually smaller physician-owned groups, between two to eight physicians. And in that scenario, they may offer it.
Do you want the security of having all those benefits?
First, the flexibility of being an independent contractor where you can get in and out of the contract, meaning the notice requirement to get out of it will be less. You can work for multiple organizations simultaneously. Now, one other consideration is restrictive covenants. So, non-compete, non-solicit. Almost any employment contract for a physician will have a non-competition clause if you’re not in a state where they’re prohibited.
There are four or five states where non-competes are entirely prohibited, just illegal. However, most states do allow non-competition clauses.
Guaranteed Job After Residency
Is a resident guaranteed a job after training?
The short answer is no. You’re not.
However, it’s doubtful that you will not be able to find any position when you get out of training. When you are a resident, the length of the residency depends upon what specialty you’re in. But most residents will start looking for a job either in their second to last or at the very beginning of their final year of training. And there are various avenues to find employment, which I’ll go through a bit. But there is no guaranteed feeder system for any resident or fellow. It will be the physician’s responsibility to go out and find a job themselves.
Finding a Job after Residency
There are times when the training program you’re in is looking for a physician, and then it’s a smooth transition if they offer you the job and it’s somewhere you want to stay. But honestly, that is rare.
As somebody who’s reviewed thousands of physician contracts over my career, I know the number of residents staying with the hospital or health network where they trained is deficient. Most of the time, people look outside their employment training program.
Now, the way to look for a job is where you want to be. And that is probably the most significant factor when finding a new job. And I’ll use an example.
Look for Jobs in Your Desired Location
Let’s say you want to move to a desirable location. For instance, I live in Scottsdale, a desirable location because of the weather, lifestyle, and all that good stuff. Because many people are moving here, the competition for jobs is much higher than in other areas.
But if you want to live in rural Idaho or something like that, where there’s very little competition—if you want to move to a remote location, you will make more money and have less competition. So, it would be much easier to find a job. However, many people don’t want to live in a remote area and they want to live in a big city.
Finding a Job in a Medical Specialty
And if you first think, okay, where do I want to move to? That can dictate the ease of finding a new position. So, that’s the first thing.
The second is the specialty. Some specialties could get a job wherever they want, whenever they want. Many of the surgical specialties, and some of the subspecialties of internal medicine, are always in need. And you’ll be able to find a job relatively quickly. Whereas for someone in primary care, peds, or something like that, the competition for those jobs might be much higher. And it might be much more difficult to find a position in the exact location where you want to be. Once you’ve identified where you want to live, there are several ways of finding jobs.
Using a Physician Recruiter to Find Work
The next could be through a physician recruiter.
They can be helpful, and you can skip paying the physician recruiter. The employer will ultimately have to pay if they decide to bring you on. There’s no downside to using a recruiter. It would be best if you found a recruiter familiar with the area you’re looking to move to. If you want to move to California, you should see a recruiter who recruits in that area.
Although it’s much easier to work remotely now than three years ago, finding someone with relationships in the community is still helpful. So, if you want to use a physician recruiter, find someone in the area or someone who focuses on the place you want to move to.
Building a Network through Colleague
Networking through colleagues is another way of doing it. People, attendings, and other physicians who work for the network may have potential job opportunities for you.
Obviously, classmates as well. If all the people in your specialty are looking for jobs, they may have leads. Those are the best ways to find a new job. As I said before, nothing is guaranteed. But if you can identify where you want to live and do the work, you should be able to find a job.
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