Where Should Physicians Practice? A Data-Driven Guide
Pay, cost of living, taxes, demand and non-compete law all change by location. How physicians can weigh them with 2026 data instead of gut feel.
Where should physicians practice? Pick the place where your pay, after state taxes and local prices, still covers the life you want, in a market that needs your specialty, under laws that don't lock you in. Pay alone is a poor guide. In 2025 the top-paying metro in Doximity's survey paid about 30% more than the lowest, and cost of living reshuffled that ranking almost completely [1].
This guide covers the five numbers worth comparing, shows where the usual shortcuts go wrong, and ends with a step-by-step way to decide.
Key takeaways
The best-paying metros in 2025 were not the usual suspects. Oklahoma City led at $495,617 on average, and Durham-Chapel Hill was lowest at $381,424 [1].
Dividing your salary by a cost-of-living index overstates what an expensive city costs you, because your savings and loan payments don't get pricier when you move. The more you save, the less local prices matter.
State income tax matters less than most doctors assume. California's 13.3% top rate doesn't start until $1 million of income [2].
The shortage is mostly a rural problem. HRSA projects nonmetro areas will have 42% of the physicians they need in 2038, versus 95% in metro areas [3].
Non-compete law is now a location factor in its own right. Eighteen states generally ban or void physician non-competes [4].
Where should physicians practice? Compare five numbers before you compare cities
Most of us choose a location the way we chose a residency: a feeling on interview day, a partner's job, a city we already know. None of that is wrong. It just helps to know what you're giving up when you follow your gut, and that takes numbers.
Five things change when you change your zip code:
Pay. What employers in that market pay your specialty.
Buying power. What that pay actually buys at local prices.
Taxes. Mostly state income tax, plus payroll quirks like California's disability tax.
Demand. How many employers need you, which sets your leverage now and your options later.
Practice environment. Malpractice costs, non-compete law, and how long licensing takes.
Then there's everything that won't fit in a spreadsheet: family, training ties, the kind of medicine you want to practice. We'll get to those last, because in real life they usually decide it.
Pay: the highest-paying metros are not where you'd guess
Doximity's 2026 compensation report draws on nearly 23,000 full-time physicians surveyed in 2025 [1]. It controls for specialty, years in practice, hours worked, and gender, so a metro full of neurosurgeons doesn't look rich just because of who lives there [1]. That makes it one of the better public sources for comparing places rather than specialties.
The results don't match the old "go to the coast for money" advice. Oklahoma City topped all 60 metros at $495,617, after a 12.9% jump in a single year [1]. Sacramento, Rochester (Minnesota), Los Angeles, and Louisville filled out the top five. Durham-Chapel Hill came in last at $381,424, just behind San Antonio, Ann Arbor, Birmingham, and Providence [1].
Source: Doximity Physician Compensation Report 2026, all specialties, 2025 survey data [1].
Two patterns stand out. First, academic towns sit near the bottom. Durham, Ann Arbor, Boston, and Baltimore all have big academic centers, and Doximity's academic setting averaged $389,591, against $480,961 in single-specialty groups [1]. Some of what looks like a low-paying city is really a low-paying employer type, and you can sometimes find a different employer without leaving town.
Second, pay growth is lumpy. The national average rose only 2% from 2024 to 2025, while a handful of metros jumped by double digits [1]. One good year isn't a trend. Look at more than one year of data before you move for a number.
For pay by specialty nationally, start with our 2026 physician salary guide.
See how your offer compares
Compare real pay data before you sign anything
Buying power: why "divide by cost of living" gets it wrong for doctors
The usual move is to divide a salary by a cost-of-living index. The best public index is the Bureau of Economic Analysis's regional price parities, where the national price level equals 100 [5]. In 2024, California was highest at 110.7 and Arkansas lowest at 86.9 [5]. Doximity's own cost-of-living ranking uses these same BEA figures [1].
Two things about that index matter a lot for physicians.
First, housing drives most of it. BEA notes that rents are often the main reason states differ, and the spread is enormous: a rent parity of 154.3 in California versus 54.2 in West Virginia [5]. The index is mostly telling you what it costs to live there.
Second, it prices what you spend, not what you save. Your 401(k) contribution doesn't cost more in Seattle. Neither does your student loan payment. When you divide your whole paycheck by the index, you treat those dollars as if they were rent.
Here's what that does to a real decision. Take two offers in states with no wage income tax, so state taxes don't muddy things: $440,000 in Washington (price parity 107.0) and $400,000 in Texas (97.1) [5][2]. Assume one earner, married filing jointly, W-2 pay, the standard deduction, and $100,000 a year going to retirement and loans in either city. Federal tax uses 2026 brackets, the 2026 Social Security wage base, and the Medicare surtax [6][7][8].
The shortcut calls it a tie, with Texas a hair ahead. The fuller math says the Washington offer buys about $7,400 more a year in local goods and services, while saving the exact same $100,000. The shortcut was charging Washington prices on money that never gets spent in Washington.
Two honest caveats. These are statewide averages, and a Seattle address costs more than Washington as a whole, so run your actual metro. And if you plan to retire in the same expensive place, your savings will meet those prices eventually. The rule still holds: the bigger the share of income you save or put toward loans, the less local prices should drive the choice. That's most true in your first years out, when debt payments take a big bite.
We go deeper on the method in cost-of-living-adjusted physician pay .
Compare locations on pay and buying power on the market board.
State taxes: real money, but usually less than the internet says
Eight states levy no individual income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Washington taxes capital gains only [2]. Elsewhere, top marginal rates run from 2.5% in Arizona and North Dakota to 13.3% in California [2].
That 13.3% gets quoted constantly. What gets quoted less is that California's top rate, with its millionaire surcharge, starts at $1 million of income [2]. A new attending making $350,000 there faces a lower marginal rate. Maryland, Massachusetts, New Jersey, New York, and DC also reserve their top rates for income at or above $1 million [2].
California does have one cost that catches people off guard. Its State Disability Insurance withholding is 1.3% in 2026 with no wage cap, so it applies to every W-2 dollar [9]. On $400,000, that's $5,200 a year regardless of your bracket.
A few more things to keep straight:
No income tax isn't no tax. States without one often lean harder on property or sales taxes, which land hardest on people buying bigger homes.
Pay gaps usually beat tax gaps. Inside Texas alone, Doximity's metro averages ran from $454,042 in Dallas to $384,329 in San Antonio [1]. That $69,713 spread is more than a flat 13.3% would take from all $400,000 of income ($53,200), and nobody actually pays that.
Our best states for physicians breakdown puts taxes next to pay and malpractice, and the physician tax guide covers the federal side.
This article is educational and is not tax or financial advice. Consult a CPA or licensed financial advisor about your specific situation.
Demand: the shortage is real, but it lives in specific places
HRSA's latest projections, published December 2025, put the national shortfall at 141,160 full-time physicians by 2038, with 30 of 35 specialties short [3]. The national number hides the real story, which is geography. HRSA projects nonmetro areas will have just 42% of the physicians they need in 2038, compared with 95% in metro areas [3].
It varies by specialty too. HRSA projects vascular surgery at 66% of need and family medicine at 76%, while emergency medicine sits at 116%, a surplus [3]. An emergency physician and a family physician looking at the same town are not looking at the same market.
Doximity's job posting data lines up. Internal medicine, family medicine, and psychiatry were the three most recruited specialties in 2025 [1].
Why demand should shape your decision:
Leverage. An employer that has been recruiting for a year negotiates differently than one with a stack of applications.
Loan repayment. The National Health Service Corps offers primary care physicians up to $75,000 for two years of full-time work at an approved site in a primary care shortage area [10].
Exit options. In a thin market, leaving a bad job can mean leaving town. In a dense one, you can change employers without changing your kids' school.
That last one is easy to forget when an offer is generous. Before you sign, count how many employers in the area hire your specialty.
For the bigger picture, see the 2026 physician job market, which specialties are most in demand, and how to read job openings by specialty.
The practice environment: malpractice, non-competes, and licensing
None of these show up in a salary comparison, and each can cost you real money or real freedom.
Malpractice premiums. The AMA's April 2026 analysis of Medical Liability Monitor data found premiums rising for a seventh straight year [11]. Location drives big gaps. In one AMA example, the reported Florida rate was $59,736 for internists and $243,988 for ob/gyns and general surgeons, while Connecticut ranged from $22,467 for internists to $159,537 for ob/gyns [11]. California's premiums were lower than every other state in that exhibit, which the AMA ties to its cap on noneconomic damages [11]. If you're employed, your employer usually covers this. It matters most if you're independent, paid on a 1099, or negotiating who pays for tail. Our explainer on tail insurance covers that fight.
Non-competes. As of a September 2026 legal survey, 18 states generally ban or void physician non-competes, and there's still no federal ban, since the FTC's 2024 rule never took effect [4]. Even states that allow them differ a lot. In Texas, agreements signed or renewed on or after September 1, 2025 are capped at one year and five miles, must include a buyout no higher than your annual salary and wages, and can't be enforced if you're let go without good cause [4]. Washington voids all non-competes on June 30, 2027, no matter when they were signed [4]. If there's any chance you'll want to stay in the same city after your first job ends, the state's non-compete law matters as much as the salary. See whether your physician non-compete is enforceable.
This article is educational and is not legal advice. Contract terms vary by state and employer. Have any agreement reviewed by a licensed attorney before signing.
Licensing. The Interstate Medical Licensure Compact offers an expedited path to licensure across 41 states plus DC and Guam [12]. If you're weighing a move, or want telemedicine or locums work on the side, compact membership in both states can shorten the wait.
What a spreadsheet can't tell you: training ties, family, and the job itself
Where you train pulls hard. Of physicians who finished residency from 2015 through 2024, 55.7% practice in the state where they trained, ranging from 33.6% in DC to 75.7% in California, with Texas at 64.9% [13]. Some of that is inertia. A lot of it is real: your referral network, your reputation, and the attendings who will pick up the phone for you.
Most of us will also trade money for a better life. In a July 2026 Doximity poll of nearly 1,000 physicians, about three in four said they'd accept lower pay for more autonomy or better work-life balance [1]. Three-fourths also said they were open to relocating for the right job [1].
So be honest about what you're actually trying to fix. If the problem is your schedule, a new city with the same call burden won't solve it. Look at physician jobs with no call before you look at moving trucks.
How to choose where to practice: a 7-step process
Write down your non-negotiables first. A partner's job, family nearby, schools, climate, faith community. These narrow the map before any number does.
Get specialty-specific pay for each finalist. All-specialty averages hide too much.
Convert each offer to buying power the right way. Start with take-home after federal and state tax, subtract what you plan to save and repay, then adjust only what's left for local prices.
Count the employers. How many organizations nearby hire your specialty? That's your fallback if the job goes sideways.
Read the state's non-compete law. Then read your contract's clause against it.
Check practice costs. Malpractice and tail if you'll be independent, licensing time if you're crossing state lines.
Score it, then sleep on it. Use the scorecard below. If the winner on paper makes your stomach drop, take that seriously and figure out why.
Set your own weights. The point is to make the trade-offs visible, not to let a spreadsheet pick your life. Before you sign anything, run the offer through our guide on how to evaluate a physician job offer.
The bottom line
No dataset can tell you where to live. But the numbers can stop you from moving across the country for a raise that disappears after taxes, or from turning down an expensive city that would have left you better off. Put the real numbers next to the things you actually care about, and then decide.
Compare locations on pay and buying power on the market board.
REFERENCES
Doximity. Physician Compensation Report 2026. Doximity, Inc. Released August 25, 2026. https://www.doximity.com/reports/physician-compensation-report/2026. Accessed October 28, 2026.
Fritts J, Loughead K. State Individual Income Tax Rates and Brackets, 2026. Tax Foundation. February 17, 2026. https://taxfoundation.org/data/all/state/state-income-tax-rates-2026/. Accessed October 28, 2026.
Health Resources and Services Administration, National Center for Health Workforce Analysis. Physician Workforce: Projections, 2023-2038. December 2025. https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/data-research/physicians-projections-factsheet.pdf. Accessed October 28, 2026.
Newitt P. Physician noncompete crackdown: A 50-state guide. Becker's Hospital Review. October 6, 2026 (summarizing a September 2026 Tucker Arensberg state survey). https://www.beckershospitalreview.com/quality/hospital-physician-relationships/physician-noncompete-crackdown-a-50-state-guide/. Accessed October 28, 2026.
U.S. Bureau of Economic Analysis. Real Personal Consumption Expenditures by State and Real Personal Income by State, 2024 (BEA 26-10, includes 2024 regional price parities). February 19, 2026. https://www.bea.gov/sites/default/files/2026-02/rpp0226.pdf. Accessed October 28, 2026.
Internal Revenue Service. Revenue Procedure 2025-32 (2026 inflation adjustments, Table 1 and standard deduction). October 2025. https://www.irs.gov/pub/irs-drop/rp-25-32.pdf. Accessed October 28, 2026.
Social Security Administration, Office of the Chief Actuary. Contribution and Benefit Base (2026 wage base $184,500). https://www.ssa.gov/oact/cola/cbb.html. Accessed October 28, 2026.
Internal Revenue Service. Questions and answers for the Additional Medicare Tax. https://www.irs.gov/businesses/small-businesses-self-employed/questions-and-answers-for-the-additional-medicare-tax. Accessed October 28, 2026.
CalChamber, HRCalifornia. 2026 Social Security Taxable Wage Base, California SDI Withholding Rate Increase. December 2025. https://hrcalifornia.calchamber.com/articles/2026-social-security-taxable-wage-base-california-sdi-withholding-rate-increase. Accessed October 28, 2026.
Health Resources and Services Administration. NHSC Loan Repayment Program (web page) and NHSC LRP Fact Sheet (February 2025). https://nhsc.hrsa.gov/loan-repayment/nhsc-loan-repayment-program. Accessed October 28, 2026.
Hardiman A. Policy Research Perspectives: For the seventh consecutive year, medical liability premiums continue to rise. American Medical Association. April 2026. https://www.ama-assn.org/system/files/prp-mlm-premiums-2026.pdf. Accessed October 28, 2026.
Interstate Medical Licensure Compact Commission. U.S. State Participation in the Compact. Page updated October 28, 2026. https://www.imlcc.com/. Accessed October 28, 2026.
Association of American Medical Colleges. Table C6. Physician Retention in State of Residency Training, by State. 2025 Report on Residents. https://www.aamc.org/data-reports/students-residents/data/report-residents/2025/table-c6-physician-retention-state-residency-training-state. Accessed October 28, 2026.
FAQs
There's no single answer, because it depends on your specialty, how much you save, and your family. On 2025 data, Oklahoma City, Rochester (Minnesota), Little Rock, and Omaha came out ahead after cost of living, while Boston, DC, and Baltimore came out lowest [1]. Our best-states breakdown compares pay, taxes, and malpractice side by side.