Experience

• Experienced dermatologists earn the highest average salaries, according to Payscale. For example, dermatologists with more than 20 years of experience earn an average salary up to $305,209, while those with less than a year practicing in the field earn salaries up to $203,473, as of December 2010.
  
  

Location

• The location where a dermatologist practices is a factor in the earnings he can make. Dermatologists in California earn an average salary of $121,010 to $301,674, while those in Pennsylvania earn a salary range of $100,000 to $200,000, according to Payscale. Cost of living is one factor that causes salaries to vary in different states. According to My Salary, the cost of living in Los Angeles is 23 percent higher than it is in Philadelphia.
  
  

Employer Type

• Dermatologists can work in hospitals, for a private practice or be self-employed and own a dermatology practice. Those physicians working for a private practice earn the highest average salaries of $144,745 to $270,225, and those working for a hospital earn from $87,000 to $247,174, according to Payscale.
  
  

Benefits

• Dermatologists who work for a hospital or private practice earn benefits in addition to an annual salary. Self-employed doctors must pay for benefits, such as time off and insurance, on their own. A dermatologist sometimes receives benefits, such as health insurance, paid vacations, paid sick time, malpractice insurance and 401k plans. Employers use benefits to attract qualified and skilled dermatologists to a position. According to the Bureau of Labor Statistics, the benefits paid to an employer increase the value of an annual salary by almost 30 percent. On an average annual salary of $50,000, this adds an additional $15,000 to the salary in benefit costs. Paid time off has a value of 6.7 percent of the annual salary, and retirement plans have a value of 3.6 percent.