Reading the Money Parts of Your First Attending Contract: Salary, RVUs, Bonuses, and Benefits

You spent more than a decade learning medicine and roughly zero hours learning employment law. Then a PDF lands in your inbox with your name on it, twenty-some pages long, and somewhere inside is the number that will shape your household's next ten years.

It is easy to read a first attending contract the way you would read a consent form at 2 a.m. You skim for the salary, check the start date, tell your spouse it looks fine, and sign, because the recruiter has been patient and you are tired. That is a human response to a long training pipeline. It is also the point where several large financial decisions get locked in before anyone has walked you through what the words mean.

This is a walkthrough of the money parts. Not the legal parts, which belong with a health care attorney, but the parts that translate into what hits your bank account, what your tax bill looks like in April, what retirement savings you can reach, and how your student loans behave once you start. For the wider view of the transition, our financial planning page for new physicians and the attending transition checklist cover the first-year decisions that come after you sign.

The Same Document Needs Two Different Readings

A physician employment contract gets read twice, by two different sets of eyes, for two different reasons.

The first reading is legal. That covers the restrictive covenant and its radius, the termination provisions and how much notice each side owes, the definition of cause, indemnification language, and call obligations. A health care attorney reads those. The American Medical Association's guidance on negotiating a first employment contract makes the same recommendation and names the provisions new attendings most often skim past: exit clauses, work locations, on-call duties, and who pays for tail coverage after you leave.

The second reading is financial, and it asks a different question. Not "is this term enforceable?" but "what does this offer actually do to our household?" How much cash arrives, in what months, taxed how. Whether the retirement plan lets you save meaningfully or barely at all. Whether the employer type changes your student loan strategy. That is the reading nobody is assigned to give you.

Base Salary Is a Floor, and Sometimes It Is Not Even That

Many employed attending offers open with a base salary paid for a defined starting window, often the first twelve to twenty-four months. You cannot produce at a full pace while your schedule is still filling, so the employer carries you through the ramp.

There is one distinction inside that arrangement worth understanding before anything else, because it changes the entire shape of year two. A guarantee can be a true floor, meaning the money is yours regardless of what you produce. Or it can be structured as an advance, sometimes called a draw, that is recoverable against your later production. Under the second version, a slow first year does not simply mean a smaller bonus later. It can mean you owe the difference back, out of future paychecks. The language is usually short and undramatic, something about amounts being "credited against" or "reconciled with" future compensation.

The other question the base salary raises is what replaces it. In many employed settings, once the guaranteed period ends, your pay converts to a production formula, and production is measured in relative value units. The American Medical Association's overview of the resource-based relative value scale explains the system that sits underneath nearly every one of those formulas. It has been the basis for physician payment since 1992, and your contract almost certainly borrows its vocabulary whether or not anyone explains it to you.

RVUs, Explained the Way Someone Should Have Explained Them in Fellowship

If nobody walked you through this in training, you are not alone. You absorb the acronym from hallway conversation and then find it embedded in the compensation exhibit of your first contract. Here is the plain version.

What a work RVU measures

Every billable service in medicine carries a relative value, and that value is split into three pieces: the physician work involved, the practice expense of delivering it, and the professional liability cost. The work piece is the one your contract cares about, usually written as wRVU. It is meant to capture the time, technical skill, mental effort, and stress a service demands relative to every other service. According to the American Medical Association, the physician work component makes up roughly half of the total relative value of a service, with practice expenses accounting for most of the rest.

The nuance that surprises people: a work RVU is not a dollar amount and it is not tied to what your employer collects. A level four office visit carries the same work RVU whether the payer reimburses generously or poorly, and whether the patient pays at all. That cuts both ways. Your production credit is insulated from your employer's collection problems, and a busy panel of poorly reimbursed patients can still generate strong work RVU numbers.

The conversion factor

Work RVUs become money through a conversion factor, which is simply a dollar amount paid per work RVU. Your contract states it. Medicare has its own conversion factor, updated annually, but the number in your employment agreement is a separately negotiated figure and the two are not interchangeable. Sometimes the contract fixes it for the full term. Sometimes it is reviewed annually, tied to an outside benchmark, or left to the employer's discretion. Those arrangements produce very different levels of predictability in your household budget, and the difference is easy to miss because the sentence describing it is usually one line long.

How thresholds work

Production pay usually starts above a threshold rather than at zero. A common structure sets an annual work RVU target roughly equal to what your base salary is meant to buy. Produce below it and you receive the base. Produce above it and the excess work RVUs are multiplied by the conversion factor and paid as a bonus. Other structures pay from the first work RVU with no base at all, and some use tiers where the conversion factor steps up as production rises.

Several details inside that structure carry real money, and they tend to live in an exhibit at the back rather than the body of the contract. Whether the threshold is prorated if you start in September rather than July. Whether a shortfall in one year carries forward into the next. Whether visits shared with an advanced practice clinician generate full credit, partial credit, or none. Whether teaching, committee work, or a medical director role earns work RVU credit, protected time, a separate stipend, or nothing at all. A physician who spends one day a week on administrative work under a contract that credits none of it is taking a pay cut.

Sign-On Bonuses and Relocation Money Arrive With Strings

The sign-on bonus is the line that lands hardest when an offer arrives. It arrives at the exact moment your savings account is thinnest, and it feels like the profession is finally paying you back. It usually amounts to a loan with a service commitment attached.

The clawback language sets out what happens if you leave before the commitment period ends. Some agreements prorate the repayment by month served. Some require the full amount back regardless of how long you stayed. Some are triggered by any departure, including one the employer initiates without cause, and some are not. Whether the repayment obligation accounts for the taxes you already paid is a separate question, and physicians who leave in year two sometimes discover they owe back the gross amount while having received only the after-tax portion.

Which brings up the other surprise. A sign-on bonus is wages. It runs through payroll, it is subject to withholding at the supplemental rate, and it carries Social Security and Medicare tax like any other compensation. The number that lands in your account is meaningfully smaller than the number in the offer letter, and the final tax on it is settled when you file rather than when it is paid. In a year where you go from a resident salary to an attending salary partway through, the withholding on that bonus may not match your actual bracket in either direction.

Relocation money follows similar logic. Employer payments for moving costs are generally treated as taxable wages for most employees rather than a tax-free benefit, so a stated relocation allowance does not go as far as it reads. Some employers gross the payment up to cover the tax and some do not. Relocation dollars are also commonly subject to the same repayment terms as the sign-on bonus. If the move crosses state lines, the picture widens further, which we covered in our article on the state tax questions worth raising before you sign a new attending job.

The Benefits Column Often Moves More Money Than the Salary Column

Two offers that look far apart on base salary can end up much closer, or reversed, once the benefits are priced out. This part of the document tends to get the least attention, and it can move more money than the salary line.

The retirement plan and what makes one better than another

The employee contribution limit is set by the Internal Revenue Service, not by your employer, so that number does not vary between offers. Per Internal Revenue Service guidance on 403(b) contribution limits, the elective salary deferral limit is $24,500 for 2026, and the total that can go into the plan from all sources, yours and the employer's combined, is $72,000. What varies between employers is how much of that larger number is actually reachable in their plan.

A plan with a generous match, a non-elective employer contribution that arrives whether or not you defer, and the internal features that allow after-tax contributions above the deferral limit is a very different instrument than a plan offering a small match and nothing else. That gap never appears as a dollar figure anywhere in the offer, so it gets noticed only when someone sits down and calculates it.

Vesting, and why it interacts with the clawback

Your own contributions are always yours. Employer contributions are subject to a vesting schedule, meaning you earn the right to keep that money over a period of service. The Internal Revenue Service explanation of retirement plan vesting describes the two common forms. Cliff vesting gives you nothing until a set date, typically three years, and then everything at once. Graded vesting hands you a percentage each year, often twenty percent annually until you are fully vested at six years.

Here is where two provisions in the same offer start talking to each other. If the sign-on bonus carries a two-year commitment and the retirement match cliff vests at three years, then leaving at thirty months means walking away from the employer money while having satisfied the bonus commitment. The two dates rarely line up on purpose, and knowing where they sit relative to each other is a different exercise than reading each provision alone.

If a 457(b) is on the list

Many hospital and academic employers offer a 457(b) in addition to the 403(b) or 401(k), which sounds like a straightforward chance to defer more income. The distinction that matters is whether the plan is governmental or non-governmental, and the offer letter almost never says. A governmental 457(b) holds assets in trust for you. A non-governmental 457(b) does not. In a non-governmental plan, the balance remains an asset of the employer and is exposed to the employer's creditors, which means the money is not fully yours in the way a 403(b) balance is. Our team advises caution here and generally steers physician families away from contributing to non-governmental plans. We walk through the full distinction in our article on how to tell which kind of 457(b) your hospital is offering.

Continuing education money and the small line items

The continuing medical education allowance is real compensation that gets treated as an afterthought. What it covers varies widely. Some employers fold state licensure, Drug Enforcement Administration registration, board recertification, and professional society dues into the same pool, and some pay those separately. Whether education days come out of your paid time off, and whether unused allowance rolls into the next year, are also worth knowing. In a specialty with expensive board maintenance, two offers can differ by several thousand dollars a year on this line alone.

Malpractice coverage and the tail nobody thinks about at signing

Depending on how the employer's policy is written, coverage for the care you delivered can stop the moment you leave, and tail coverage, formally an extended reporting endorsement, is the purchase that closes that gap. The mechanics run deeper than a contract walkthrough needs, so we cover them separately in the full guide to malpractice tail coverage. For the contract reading, two things matter: who pays for it, and that it can be a large one-time cost.

Tail is expensive. The American Medical Association's overview of what resident physicians should know about tail insurance notes that this is one of the coverage questions least understood by physicians finishing training, and that the gap can affect the ability to change jobs for years. Who pays for the tail is a contract term, not a default. Some agreements put it on the departing physician, some on the employer, and some shift the burden so the employer's share grows with each year of service. In procedural specialties the cost can be large enough that it functions as a barrier to leaving.

The Money Parts at a Glance

Here is what the financial elements of a typical first attending contract tend to mean in plain English, alongside the questions that come up when physicians review an offer with a planner and an attorney.

What the Offer Does to Your Household, Not Just Your Paycheck

A contract reaches well past the compensation exhibit. Three parts of it shape decisions you will be making for years, and none of them are labeled.

The first is the employer's tax status. Whether you are employed by a nonprofit hospital or a private group practice does not change your salary, but it determines whether your payments count toward Public Service Loan Forgiveness. For a physician carrying a large training balance, that single fact can outweigh a meaningful salary difference between two offers, and it points the entire loan strategy in a different direction. We laid out how that comparison typically gets weighed in our framework for forgiveness versus refinancing as a hospital-employed physician. It is also easy to get wrong, since a physician can practice inside a nonprofit hospital while being employed by a separate private entity that bills through it.

The second is timing. Your last resident paycheck and your first attending paycheck are often six to ten weeks apart, and the first one may be partial. The sign-on bonus might arrive at signing, at start date, or after ninety days. Moving costs, licensing, board exams, and a deposit on a house do not wait for any of that. Mapping those dates against actual expenses is unglamorous work that heads off the credit card decisions physicians tend to regret later. If home buying is part of the plan, our overview of how physician mortgage loans work covers how lenders treat a signed contract before you have a pay history.

The third is the tax year itself. The calendar year you finish training is unlike any year before or after it. Part of it is taxed at a resident income level, part at an attending level, and withholding tables set at the start of the year are unlikely to reflect either accurately. A physician starting in July with a sign-on bonus and a relocation payment can end up with an unusual return, which is why this is a conversation to have with a tax professional in advance rather than the following April.

The Questions That Tend to Matter Most

Beyond the items in the table above, four questions come up repeatedly when a first attending contract gets read carefully rather than quickly:

• What exactly does the compensation formula look like the day the guarantee ends, in numbers rather than description?
• Is administrative, teaching, or medical director time compensated separately, credited toward production, or unpaid?
• Is the employing entity a qualifying nonprofit for loan forgiveness purposes, and can that be confirmed in writing?
• Where do the bonus commitment date and the retirement vesting date fall relative to each other?

Asking these is not adversarial. Employers hire physicians constantly and have answered them many times before. What tends to happen is that the answers are clear in the employer's mind but nowhere in the document, and the written version is the one that governs your next five years.

Where the Different Kinds of Help Fit

The legal terms belong with a health care attorney who reviews physician contracts for a living. That review typically costs a fraction of one month of attending pay, and the restrictive covenant alone justifies it.

The financial reading is a separate job. It looks at how the offer converts into monthly household cash flow, what the tax picture looks like in the transition year and the year after, whether the retirement plan gives you room to save at the level your income allows, and how the employer type interacts with your loan balance. It also puts two competing offers side by side in terms your family can compare, which is rarely the base salary number.

For twenty-five years our work has been with physician families, many of them arriving somewhere in this stretch of the career, contract in hand and a start date approaching. A first contract touches loans, housing, taxes, and the pace of saving all in the same season. What we do is help sort everything out at a moment when everything seems to be due at once.

If a contract is on your desk and you would rather not be the only one reading the money parts before you sign, you can sit down with our team or email contact@physicianfamily.com. No sales process, just a conversation about whether we are the right fit to help your household.

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