You’d think the answer would be simple. “Do residents get paid?” It’s a question almost every future doctor has asked—often with more urgency than they’d like to admit. Yet, despite how frequently it comes up, there’s still a fog of half-truths and outdated assumptions around the topic.
Let’s clear the air: yes, residents are paid. But how much, why it varies, and what it actually means for your financial life—that’s where the real story begins. And if you’re heading into this chapter blind, you’re setting yourself up for confusion at best, and poor planning at worst.
The implications of misunderstanding residency pay go far beyond the number on your direct deposit. Compensation influences where you train, what specialty you choose, and even how long you can afford to defer loan repayment. We’ve seen clients walk away from offers or opportunities because they misjudged what their financial life would actually look like during residency. Others have chosen specialties based on flawed assumptions about earning potential and lifestyle.
This article strips away the noise. No fluff, no sugarcoating—just a sharp, detailed guide to how residency pay works in practice. Whether you’re about to enter the Match or weighing your options for the future, we’ll equip you with the clarity you need to plan strategically, spend wisely, and set yourself up for success beyond residency.
The Nature and Role of Residency in a Medical Career
Residency isn’t a continuation of school—it’s your first real job as a physician. After earning your MD or DO, you don’t step into another classroom. You step into the hospital—and you start working. This isn’t academic theory. It’s 4 a.m. pages, complex cases, split-second decisions, and real accountability. It’s also, crucially, paid employment.
Why? Because residents aren’t just “in training”—they’re integral to how hospitals function. From triaging patients in the ER to managing complex inpatient care, residents are on the front lines. Hospitals rely on their labor. Without residents, many teaching hospitals would simply cease to function. It’s why the system is designed to compensate them—modestly, yes, but formally and consistently.
Residency programs vary widely. Internal medicine typically runs three years; general surgery stretches to five; neurosurgery can go seven or more. There are categorical programs (where you match directly into a full-length program), prelim years (single-year programs often preceding specialties), and transitional years (broader clinical foundations before specialization). Each program operates under the strict oversight of the ACGME (Accreditation Council for Graduate Medical Education), which governs work-hour limits, educational content, and supervision standards.
Here’s where confusion often creeps in. Medical school rotations—aka clerkships—are educational: students observe and assist under supervision but are not held to the responsibilities (or liability) of licensed physicians. Observerships, often done by international graduates, are shadowing experiences—not hands-on training, and definitely not paid. Unpaid internships, common in other industries, don’t exist in the U.S. medical residency system. If you’re working as a resident in a U.S. hospital, you are getting paid. Period.
In short, residency is the proving ground of your medical career. You are not a student. You are not an intern. You are a physician-in-training with a license, a salary, and an escalating set of responsibilities. Understanding that distinction is the first step toward navigating this stage strategically—and with your eyes wide open.
How Much Do Medical Residents Earn?
Let’s get straight to the numbers. According to the AAMC’s 2023 Survey of Resident/Fellow Stipends and Benefits, the average first-year resident (PGY-1) earns approximately $61,000 annually, with salaries increasing incrementally each year of training. By PGY-3, residents typically earn around $66,000 to $70,000, depending on the program and location. Senior residents (PGY-4 and beyond) may see salaries approaching or exceeding $75,000, though this varies widely.
But raw salary figures only tell part of the story. Several factors significantly influence resident compensation:
- Geographic Location: Urban centers with high living costs, like New York City or San Francisco, often offer higher salaries to offset expenses. Conversely, programs in rural or lower-cost areas may offer lower stipends, but the reduced cost of living can balance the scales.
- Institutional Funding and Prestige: Well-funded academic medical centers or prestigious institutions may provide more generous compensation packages, including additional benefits or bonuses.
- Specialty Choice: Surgical specialties or programs with demanding schedules might offer higher salaries or additional stipends, reflecting the intensity and hours required. However, this is not a universal rule, and variations exist across institutions.
Beyond base salary, residents often receive benefits that can substantially impact their financial well-being:
- Benefits Packages: Most programs offer comprehensive health insurance, retirement plan options, and sometimes subsidized housing or meal plans. These benefits can add significant value to the overall compensation package.
- Overtime/On-Call Differentials: While less common, some institutions provide additional pay for extra shifts or on-call duties, offering residents opportunities to augment their income.
However, when assessing these figures, it’s crucial to consider the real cost of living. A $70,000 salary in a city with exorbitant rent and living expenses may stretch thinner than a $60,000 salary in a more affordable locale. Residents must budget carefully, accounting for student loan repayments, daily living costs, and potential savings.
In essence, while residency provides a salaried position, the financial landscape is complex. Understanding the nuances of compensation, benefits, and living expenses is vital for residents to navigate this phase strategically and set the foundation for future financial stability.
Comparing Residency Pay with Other Stages and Professions
One day you’re paying tuition, the next you’re earning a paycheck. That’s the mental leap many med students face as they enter residency—and it can be jarring. After years of accumulating debt and living on financial aid, that first resident paycheck feels like a lifeline. But make no mistake: while you’re now a paid professional, the financial picture still demands scrutiny.
Compared to other medical roles, residency pay slots are modest. Registered nurses often earn $75,000 to $90,000 annually. Physician assistants—who require fewer years of education—typically start in the $95,000 to $110,000 range. Attending physicians, of course, operate in a different stratosphere, with average salaries ranging from $200,000 to over $400,000 depending on specialty.
So why the gap? Because residency is still a training period. Yes, you’re licensed. Yes, you’re treating patients. But you’re also under supervision, not yet responsible for the full legal and administrative load carried by attendings. Your hours are long, your responsibilities real, but the system is structured to reflect that you’re still building toward clinical independence.
For many, residency income is their first reliable stream of wages—and it arrives just as federal loan repayments loom. This is where the complexity sharpens. That $65,000 salary doesn’t go far when you’re managing six figures in educational debt. But here’s the good news: most residents qualify for income-driven repayment plans, and Public Service Loan Forgiveness (PSLF) can offer significant long-term relief if you remain in nonprofit or academic medicine.
Bottom line: residency pay isn’t designed to make you rich—it’s designed to support you through a period of accelerated growth and responsibility. Understanding its place within the broader professional and financial arc of medicine is key to managing your money (and expectations) wisely during these formative years.
Exceptions, Nuances, and Financial Misunderstandings
Let’s put one myth to bed immediately: you do not pay for residency. If you’re entering an accredited U.S. program, there are no tuition bills, no course fees, no “training charges.” Residency is employment, not an educational subscription.
That said, the road isn’t free of costs. Residents shoulder a range of professional expenses: licensing applications (both state and DEA), board exam fees, scrubs and textbooks, and even union dues in certain systems. These aren’t program fees—they’re the price of maintaining a medical career in motion. And while your employer may cover some of these costs, assume the burden falls to you unless told otherwise.
There’s also moonlighting—optional paid clinical work outside your standard residency duties. This is generally available only to PGY-2 residents and above, depending on program policy and state law. It can be a valuable source of supplemental income, but it’s tightly regulated and shouldn’t be relied on to fix a broken budget.
International Medical Graduates (IMGs) face an extra layer of complexity. Visa status can influence everything from where you match to how much flexibility you have in taking outside work. Some programs may restrict moonlighting entirely for visa-holders. Others might offer slightly different compensation structures or require additional credentialing steps before pay begins. These nuances can significantly impact the financial outlook for IMGs, so advance research is essential.
As for the persistent rumor of “unpaid” residency programs: any legitimate, ACGME-accredited residency will pay you. If a program isn’t offering a salary, it’s either non-accredited or part of a non-traditional training route—often with major limitations on licensure and board eligibility down the road. In short: if you’re not being paid, you shouldn’t be there.
Understanding these distinctions keeps you out of financial traps and helps you navigate the system like a professional—not a passenger.
Strategic Financial Planning During Residency
Residency is the training ground for your finances, too. Start by setting a budget—tight but realistic—and stick to it. Track spending. Build an emergency fund. Avoid lifestyle creep. The habits you build now will compound in value long after you’re making attending-level money.
When it comes to loans, deferment and forbearance may offer temporary relief, but they often grow your balance silently. Income-driven repayment plans keep you current while protecting cash flow. If you’re at a nonprofit or academic hospital, you’re likely eligible for Public Service Loan Forgiveness—ten years of qualifying payments, and the rest is wiped clean.
Finally, don’t confuse short-term salary with long-term payoff. A primary care residency might pay the same as a surgical one, but your earning potential post-training could differ by six figures. Choose your specialty based on alignment with your skills and goals—not just your PGY paycheck. Financial strategy starts now.
Clarity, Confidence, and Next Steps
Yes, you’re paid during residency—but that paycheck comes with context. Knowing how much, why it matters, and what variables shape it is essential for making informed, strategic decisions in your medical journey.
Residency isn’t just a training ground for clinical skills—it’s your launchpad for financial discipline. The habits and frameworks you establish now will echo throughout your career.
As you navigate the complexities of medical training and career development, strategic guidance can make all the difference. Schedule a free consultation with MBA Exchange to gain insight on how to position yourself for long-term success.
