Specialist advice for Locum Doctors

Working as a Locum can give you flexibility and a varied work experience, but making sure you are being paid correctly and not storing up trouble with HMRC can be more difficult, which is where we can help.

Contact us today

What is the Best Way to be Paid as a Locum?

Making the right choice can be difficult

Locums carry out many different types of work and can be paid in a variety of ways.

The locum doctors we work for include:

  • Salaried GPs completing single session appointments or regular retainer sessions in general practice.
  • GP principals completing out-of-hours work or other private work.
  • Doctors completing short-term or ad-hoc service contracts at hospitals.
  • Consultants providing cover outside their NHS contracted work.
  • Doctors working on longer term appointments to cover maternity leave, illness or sabbaticals.

How are locum doctors paid?

There are four main ways locum doctors can be paid:

  1. By a PAYE salary from an employer or an agency.
  2. Payment from an umbrella company.
  3. Payment from your own limited company (personal service company)
  4. Payment as a self employed contractor.

As a locum it is not simply a matter of being able to choose how you want to be paid, you need to make sure it meets with HMRC approval as well.

A combination of your contract and various tax rules may determine which payment method you have to use. Since 2017, the ‘off payroll’ working rules, (IR35) covers all NHS authorities. These now force many locums to be paid under the PAYE system.

Working for a Locum Agency

If you are engaged through an agency, the agency will almost certainly dictate how you are paid. For example, an agency is unlikely to pay you as a self employed individual and many offer you a higher sessional rate if you are engaged through an umbrella company or your own limited company (personal service company). Many agencies now have to comply with ‘off payroll’ working rules, (IR35) when they pay locums.

Counting the Costs

There are different costs associated with the different methods of being paid. If you are engaged through an agency, the agency will take its charges or commission. An umbrella company will charge separately for its services and you will probably need an accountant if you run your own limited company (personal service company) or trade as a self employed contractor.

NHS Pension Contributions

Certain categories of work carried out for NHS employers will be superannuable. However, you will not be able to make superannuation contributions if you are engaged through an agency, trading through an umbrella company or trade through your own limited company (personal service company).

How can we help

The best way to be paid is different for each locum doctor. We will review your contract and individual circumstances and advise you of your best option.

We are very experienced at this work helping many locum doctors throughout the UK with making sure they use the best method to optimise their earnings and pensions. Why not contact us today and we can start the process of helping you with your situation.


Contact us for specialist medical accountancy services for Locums

If you’re looking to plan your finances for the future or trying to find an answer to a problem then get in touch today.



Are you in danger of being hit with a huge tax bill on your pension growth? Our NHS Pension Review Service can provide an advance warning of impending pension issues.

Learn more →



HMRC have increasingly got GPs in their sights and many Practices have been subject to lengthy tax investigations. Make sure you’re covered with our annual insurance scheme.

Learn more →



Talk to one of our Medical Accounting Team for free. We can discuss your circumstances and how we can help you achieve better financial management, reduce your tax bills or plan for the future with a tailored fixed price plan.

Meet our team

We have a panel of subject experts and a team of professional accountancy support staff to make sure your specific needs are met reliably and cost effectively.


A specialist healthcare team to advise you
Call free for support at any time
Keep you up to date with the latest changes
No fuss, smooth process to change to us
Members of AISMA - Association of Independent Specialist Medical Accountants

What our clients say…

Dr Ravi Bansal, Locum GP

I’ve been with Nichols and Co for nearly 10 years with Debra being my accountant. I first contacted them when I received letters for tax arrears due to the wrong tax codes being applied during my hospital jobs.

Debra sorted this matter out and has always provided helpful and honest advice regarding tax matters. She has also helped my wife with her tax returns. I would definitely recommend their services for accounting matters with a special interest in helping doctors with their tax affairs. They are approachable, helpful and efficient.

Dr Jayran Mistry, Locum

Thank you for everything you at Nichols & Co have done for me with regard to my tax returns to date. I have always felt I am able to approach you with any question and that the answer is always helpful and thorough.

I am very grateful for how detailed, clear and efficient you are with tax returns and letters and for expediting things when needed. Every time I make contact with you I am met with polite staff and helpful advice and I have spoken with many of my friends about the service you provide and how good I think it is. I always recommend you. Thanks very much again, I really appreciate your hard work and help.