Many people strive to make a six figure salary. This obviously should not be your #1 reason for becoming a pharmacist. I believe you should be passionate about what you do, however, it should be something that pays well too. People will always tell you to “follow your passion” and not worry about the $$$ involved. “Money is not important, money does not buy happiness”. I think this is ideological advice that will bite you in the ass. Those who have an inheritance from their parents/family are the only ones that can afford to truly follow their passion without worrying about how much money they are going to make.
Growing up in a modest income family, I learned to work hard and be conscious about earning and spending money. I will not inherit any assets, in fact, I will be the provider for my family in the end. I have accepted the role of being financially responsible for my parents when they are not able to support themselves anymore. In addition, I will always be there if my brother needs financial help. Without proper management of my finances I would be unable to do this. Thus it was important to me to also consider salary when choosing a career to pursue.
As a high school student I never thought I would make a six figure salary. I grew up in a family of 4 with my parents only making about $40k per year. My goal in high school was to make at least $50,000 per year after college. I far exceeded this goal. Now I have new goals to be financially independent by the age of 40. If everything works out my goal is to scale back to 16-24 hours a week. I may have to work full time past my goal, as I suspect my parents will need my assistance in the future.
What is the Pharmacist Take Home Salary?
When I was in college I found out pharmacists were making a six figure salary. I imagined if I could be a pharmacist I would be wealthy and all my problems would go away. Not true. What most people do not take into account is taxes and increasing expenditures as income rises. The average pharmacist take home salary comes no where close to a six figures. Granted pharmacists get compensated well above many other professions. The problem is most new graduates start living a much more extravagant lifestyle with vacations, going out, luxury cars, large houses, and just buying unnecessary “stuff”. If everyone increases their lifestyle to match their income, technically nobody will ever become “wealthy” or even be prepared for retirement. It is not how much you make, but how much save!
The national median salary for a pharmacist comes out to be $116,670 in 2012 according to the Bureau of Labor and Statistics.
To keep things simple let‘s assume this pharmacist used the “standard deduction” to account for taxes. The median salary take home salary for pharmacists ends up being $84,744 (note: state/city income tax not included). Definitely less than six figures. To calculate the numbers on the chart:
- I used TurboTax Calculator to get the federal income tax total. This is not as easily calculated due to the incremental steps in the federal income tax brackets.
- Medicare Tax 1.45%
- Social Security tax is 6.2% up to a gross income of $117,000 for the year of 2014.
*NOTE: This does not include State Income Tax or City Income Tax. This will be variable depending in which state you work in. I work in Washington and there is no state income tax or city income tax.
Now we know that the median income pharmacist pays a lot in taxes, $31,926.26 to be exact. Why does this matter? It is important to understand tax concepts to help you make financial plans. There are many ways to save money on taxes.
Would you like to see more articles on how to save money on taxes?
I hope the recommendations above will help guide, motivate, and inspire you to achieve your goals. Follow my blog for more tips and advice on finances and being a pharmacist. What are your experiences? Please comment below and share your thoughts.