How much do you actually keep from a moonlighting shift?
Someone offers you $180 an hour for a Saturday urgent care shift. Twelve hours. $2,160. Your brain has already spent it.
Then April arrives, and the shift that felt like $2,160 turns out to have been closer to $1,300. Nobody lied to you — you just did the math with the wrong tax rate. Most physicians do.
The mistake: using your average tax rate
Your overall "effective" tax rate — total tax divided by total income — might be 25%. But moonlighting income doesn't get taxed at your average rate. It stacks on top of everything you already earn, which means every extra dollar is taxed at your marginal rate: your highest bracket, plus state tax, plus payroll taxes.
For a typical attending, that stack looks like 32–35% federal, 5–10% state, and 2.9–3.8% Medicare. Extra income is your most heavily taxed income. Evaluating a side gig with your average rate flatters it by 10–15 percentage points.
1099 vs W-2: the question that changes everything
Most moonlighting is paid on a 1099, which makes you an independent contractor. Three things follow:
Self-employment tax. As a W-2 employee, you and your employer split payroll taxes. On a 1099, you're both halves. The headline rate is 15.3%, but there's a critical carve-out for physicians: if your main W-2 job already pays you past the Social Security wage base ($176,100 in 2025), you've maxed out Social Security for the year — your 1099 income only owes the Medicare portion, roughly 3.8% for high earners. This one detail can swing a shift's value by hundreds of dollars, and it's the most common thing physicians get wrong in both directions.
Nothing is withheld. That $2,160 lands in your account looking whole. The tax bill arrives later, with a side of quarterly estimated payment obligations. The money was never yours; it just visited.
Deductions become real. 1099 income lets you deduct legitimate business expenses — travel to the site, licensing costs for that gig, possibly a solo 401(k) contribution, and potentially the QBI deduction. This partially claws back the tax disadvantage, but only if you actually track and claim it.
The costs nobody puts in the offer
A two-hour drive each way is four hours of your life the hourly rate doesn't cover. Overnight gigs mean lodging. Weekend shifts can mean childcare at weekend rates. A $185/hr gig 90 minutes away with $150 in costs routinely loses to a $150/hr gig ten minutes from home — but you only see it when you compute the net hourly rate on true hours, not the sticker rate on scheduled hours.
When a "worse" rate is actually better
Because taxes and costs hit offers differently, rankings flip. A W-2 shift at $160/hr can beat a 1099 shift at $180/hr once you account for the employer's half of payroll taxes and malpractice coverage typically being included. A lower rate with zero commute can beat a higher rate with a drive. The only fair comparison is net-per-true-hour — which is exactly the number nobody prints on the offer.
The question behind the question
Once you know a shift nets $1,300, the real decision starts: is a Saturday of your life worth $1,300 to you, right now? Early-career with loans, often yes. Mid-career with young kids, often no. The math can't make that call — but you can't make it honestly without the math.
This article is an educational overview, not tax, legal, or financial advice. Tax rules change and individual situations differ — confirm decisions with a CPA or qualified advisor.