Salary question: Hourly translating to Annually

[RustedFox]

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Hey all,

Thanks in advance: I'm sifting through jobs right now, and the hourly rates that I'm being quoted seem to range between 150 and 180/hr, with most at around 160. Most jobs are employee status; one or two IC joints thrown in there. These are all about the same "type" of shop... 25-35K/yr in volume, with a mix of 8s, 10s, and 12s in terms of shift lengths. I'd be happy with any of these jobs, its really going to come down to finding the 'one that I like the best'.

My question is: since I'm a total neophyte at this... can anyone ballpark what these rates will add up to annually (pre-tax and post-tax figures would be nice, but I'm not looking for exactly precise figures. Big ballpark is just fine).

 

[Apollyon]

My question is: since I'm a total neophyte at this... can anyone ballpark what these rates will add up to annually (pre-tax and post-tax figures would be nice, but I'm not looking for exactly precise figures. Big ballpark is just fine).

Just math it out - hrs/week x weeks x $/hr. Will you be taking a vacation? Then it won't be 52, but 50 or 48 weeks.

Alternately, take the hours/month (if you are guaranteed/required "X" number of hours per month) and multiply by 12, and by per hour.

When I was with my last group, I had a set number of hours per month, and a set amount I was paid - but, if I worked more or less, I was paid more per each hour worked or deducted. So, provided I got my hours, I knew each month what I would make.

Very roughly, figure 1/3 off for taxes.

 

[EM_Rebuilder]

Also remember the IC jobs will probably be more money over the course of the year, but compare apples to oranges...

The tax structure is a different for IC.. plus, as an employee you usually have Health Insurance either provided or at a discount rate that you 'purchase' plus there tends to be some sort of retirement plans. That package can easily be worth nearly 50K a year difference in pay..

My experience was that IC vs employee in similiar markets honestly becomes a 'wash' at the end of the day.... Some people dont like screwing around so much with their taxes, figuring out retirement plans, etc.. so the employee model becomes more attractive. Others like having more control of their finances and health insurance options so the IC becomes more attractive. Regardless of the 'model', the main key is being happy where you are working....

It was already stated above how to figure out approx how much you will make. Each job should be giving you a sample contract or at least saying X number of hours are expected of you each month. Consider that the minimum and multiple it out... Ask to see a schedule also so you can see how the newer guys are treated shiftwise and to see how many shifts others are working....

 

[EMFreakz]

what do you think of contracts where there is no minimum? I found it a bit odd as there's no guarantee, and basically there's no difference between part time or full time. Contract was with one of the big contract groups. Is this common? Concerning? There doesn't seem to be a problem getting shifts though from what I've heard of the guys working there.

 

[The White Coat Investor]

Hey all,

Thanks in advance: I'm sifting through jobs right now, and the hourly rates that I'm being quoted seem to range between 150 and 180/hr, with most at around 160. Most jobs are employee status; one or two IC joints thrown in there. These are all about the same "type" of shop... 25-35K/yr in volume, with a mix of 8s, 10s, and 12s in terms of shift lengths. I'd be happy with any of these jobs, its really going to come down to finding the 'one that I like the best'.

My question is: since I'm a total neophyte at this... can anyone ballpark what these rates will add up to annually (pre-tax and post-tax figures would be nice, but I'm not looking for exactly precise figures. Big ballpark is just fine).

Let's say fifteen 10s a month at $160/hour. =15*10*12*160=$288K Expect ~ 25% in taxes, leaving you about $200-220 after taxes.

 

[Arcan57]

what do you think of contracts where there is no minimum? I found it a bit odd as there's no guarantee, and basically there's no difference between part time or full time. Contract was with one of the big contract groups. Is this common? Concerning? There doesn't seem to be a problem getting shifts though from what I've heard of the guys working there.

There's some risk that you might not get enough shifts to earn the money you are expecting if there's no minimum. You may be able to negotiate a minimum, although I don't know of any groups (including the big ones) that will pay a doctor for a shift they didn't work.

 

[RustedFox]

Thanks all, I already "mathed it out", but I didn't trust my own sentiments seeing as how I'm a total neophyte at it all.

I figured on closer to 40% in taxes. Yes/no ?

 

[EctopicFetus]

Thanks all, I already "mathed it out", but I didn't trust my own sentiments seeing as how I'm a total neophyte at it all.

I figured on closer to 40% in taxes. Yes/no ?

1st let me say what the others on here said. You def want a minimum number of hours or else you may not get the hours you want. As reimbursement declines (through more medicaid patients, more no pay) people may be forced to work more.

Assume 275k/yr, you will have some deductions but lets look at worst case

Let me give you a shot at your tax burden...
1) Federal tax ~75k if single
~68.5k if married


http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

2) Social Security assume 6.2% of 108K (or 6500) for an employee or double that or 12.4%/13k if you are an IC

3) Medicare 1.45% of every penny you make if you are employee say 3500 or 2.9% if IC $7000

4) State income tax (highly state dependent) from 0% to about 10%.

Expecting 200k post tax to spend would be fair.

Obviously it would be wise to put money away in retirement to lower your tax burden. You may have some other deductions depending on your situation. Being an IC is a great way to write stuff off but you def need a good accountant who knows how to do things to help you out.

 

[future_dr_house]

Thanks all, I already "mathed it out", but I didn't trust my own sentiments seeing as how I'm a total neophyte at it all.

I figured on closer to 40% in taxes. Yes/no ?

40% is only your marginal tax rate, overall, it should average out to as others allude to around 25% of your total take home

 

[EctopicFetus]

40% is only your marginal tax rate, overall, it should average out to as others allude to around 25% of your total take home

Currently the top marginal tax rate is 35% on your federal monies.

see my workup above.

 

[future_dr_house]

Currently the top marginal tax rate is 35% on your federal monies.

see my workup above.

just using what he threw out there

 

[EctopicFetus]

just using what he threw out there

If you consider state, federal, Social security, Medicare you arent too far from that 40%.

 

[touchadream]

Thanks all, I already "mathed it out", but I didn't trust my own sentiments seeing as how I'm a total neophyte at it all.

I figured on closer to 40% in taxes. Yes/no ?

In 2012, you can contribute and deduct up to 50K to a 401k Profit Sharing Plan, which you can set up as an IC for yourself. This could save about 15-20K in taxes, so pretty good deal, esp if you live in high state tax state. You can also get a very reasonable health ins policy with a high deductible and then contribute to a health savings account deductibly saving another few thousand a year which you don't have to spend, but could if you needed to on health expenses, dental, vision, etc. If married and needing life insurance, you can actually do that deductibly too, or tax advantaged inside a Section 79 plan if you incorporate yourself, operates like a Roth for people who make too much to qualify.

Essentially, you have to pay taxes on your lifestyle costs, food, clothing shelter, entertainment, what you spend to live, but beyond that there are enough shelters for doctors that you shouldn't have to pverpay. Unfortunately, many accountants are historians more than planners, and will have unwanted liability for making suggestions to you about savings ideas since they are also signing your returns as preparers, so not very motivated to look hard for deductions that aren't common. You can very legitimately have some less common ones, like the 79 plan, or a defined benefit plan, which will come later in your career, but will help you catch up in retirement savings you missed in early years while training and schooling so long...

When you think about marginal vs. average rates of tax you pay, there are 6 brackets currently. The first dollars you earn are taxed at the lowest rate (the first 10,000) but the last dollars you earn are all 35% dollars, more if state taxed, also at the max state rate, so the deductions you get count against those expensive dollars, not the first ones that are less highly taxed.

So, in your new "bracket" as a new member of the "highly taxed," taxes are going to be one of your biggest ticket items, and the more you make the more that will be so. Paying yourself tax-free fringe benefits as an IC, done carefully over a career, can make a significant difference. It is, however, a bother, but worth a million or more in extra retirement $. The earliest dollars you let slip away are also the most significant losses, or can be your most significant gains because of the power of compounding. Doctors start late anyway, so do the best you can to save something early, even if you can't do the max early. BTW, congratulations!

 

[RustedFox]

Thanks all for the advice. Most jobs that I'm looking at are employee-based, with one or two ICs thrown in the mix.

I am single.
Jobs are in a no-state income tax state.

Gotta drive back home today from a wedding. 500 miles, short nap, then night-shift.

Wish me luck.

 

[EctopicFetus]

As an employee there are fewer ways to write off expenses.

In the end look at the breakdown I gave you. Expect 75k in taxes will be less if you dump 50k in retirement. Keep in mind your first job will be 6 months of residency and 6 months of attending-dom. so your taxes will be low there.

In the end honestly, take the job where the dudes who have been there for 10 years arent miserable. $$ isnt the end all be all but it is important but your longevity is key.

IMO longevity is proportional to happiness at work.