A Guide for New Doctors in Calgary & Vancouver
Stepping out of residency and into your role as a practicing physician is an exciting milestone. After years of long hours and modest pay, you’re finally earning a full salary. However, with this transition comes new financial responsibilities—student loans, taxes, and investment decisions that can shape your long-term financial future.
At MMT CPA, we specialize in helping physicians in Calgary and Vancouver make smart financial decisions. Whether you plan to pay off debt, invest in your future, or open a private practice, a solid financial strategy is essential.
Understanding Your New Income
One of the biggest changes after residency is the increase in income. While every physician’s earnings vary based on specialty and location, your pay structure will also play a significant role in your financial planning.
- Employed Physicians receive a fixed salary with possible bonuses. Taxes are deducted at the source, and financial planning is more straightforward.
- Fee-for-service physicians bill patients or insurance providers directly, meaning income fluctuates and tax obligations are higher.
- Incorporated Physicians operate as business owners and have greater tax planning opportunities.
Understanding how you’re compensated will help determine how to manage cash flow, taxes, and savings.
Managing Student Debt and Loan Repayment
For many new doctors, medical school debt is a major concern. A structured repayment strategy can help you clear your loans efficiently while balancing other financial goals.
- Should You Prioritize Debt or Investing? Investing may offer higher long-term returns if your loans have a low interest rate. However, paying off high-interest debt quickly can free up cash flow.
- Loan Repayment Assistance Programs – Some government programs offer loan forgiveness or repayment support for physicians working in underserved areas.
- Debt Consolidation & Refinancing – Refinancing can lower interest rates and make payments more manageable if you have multiple loans.
Setting Up a Financial Plan
Transitioning to a higher salary requires financial discipline. Many new physicians fall into the lifestyle inflation trap—spending more as they earn more. Instead, consider these steps:
- Budgeting for Stability – Create a financial plan that accounts for loan payments, savings, taxes, and everyday expenses before increasing discretionary spending.
- Building an Emergency Fund – Aim for 3–6 months of living expenses in an easily accessible savings account.
- Working with a CPA – A financial expert can help you structure your income and expenses wisely.
Tax Planning for New Physicians
Taxes can be complex for physicians, especially for those who are self-employed or considering incorporation.
- Maximizing Tax Deductions – Eligible expenses may include continuing education, medical equipment, home office expenses, and professional memberships.
- When to Incorporate – Incorporate can provide financial benefits if you’re earning significantly more than your expenses and want to defer tax.
- Managing Tax Payments – Fee-for-service physicians must pay estimated taxes quarterly to avoid penalties.
A CPA can help you navigate tax laws and reduce your tax burden while complying with CRA regulations.
Smart Investment Strategies for Physicians
With a higher income, starting investing for your future is important.
- Retirement Planning – Contribute to RRSPs and TFSAs for tax-efficient savings.
- Diversified Investments – Consider stocks, bonds, real estate, and private investment opportunities to build wealth over time.
- Professional Financial Guidance – Working with an advisor ensures your investments align with your long-term goals.
Insurance and Risk Management
Your income is your greatest asset—protecting it is crucial. Key insurance policies for physicians include:
- Disability Insurance – Protects your income if you’re unable to work due to illness or injury.
- Malpractice Insurance – Required for practicing physicians to cover legal risks.
- Life Insurance – Essential if you have dependents relying on your income.
Choosing the right coverage ensures financial security for you and your family.
Planning for Your Future Practice
Many physicians eventually choose to run their own practice. If that’s your goal, financial planning should start early.
- Should You Open Your Own Practice? Weigh the benefits of autonomy and income potential against the responsibilities of managing a business.
- Buying Into a Clinic vs. Starting Fresh – Existing clinics offer an established patient base, but a new practice allows full control.
- How a CPA Can Help – From business planning to tax structuring and cash flow management, working with an accountant can make the transition smoother.
Set Yourself Up for Financial Success
The shift from residency to full-time practice is exciting, but financial planning is key to making the most of your new income. You’ll build a strong financial foundation by focusing on debt repayment, tax efficiency, investing, and risk management.
At MMT CPA, we specialize in helping physicians in Calgary and Vancouver navigate this transition. Whether you need tax planning, incorporation advice, or investment guidance, we’re here to help.
