Locum Tenens vs. Permanent Position: A Complete Salary and Benefits Comparison

Locum tenens physicians typically earn higher gross hourly rates — often 25-75% more than equivalent permanent positions. However, the total compensation comparison is more nuanced. Permanent physicians receive benefits worth $40,000-$80,000+ annually (health insurance, retirement contributions, malpractice coverage, CME allowance, PTO). When you subtract the cost of self-funding these benefits from locum income, the net difference narrows significantly. Some specialties (emergency medicine, hospitalist medicine) see strong locum premiums, while others (primary care in desirable locations) may not see a meaningful difference after benefits.

Most locum tenens agencies provide malpractice insurance as part of the assignment — this is standard practice and one of the key benefits of working through an agency. The policy is typically claims-made coverage provided by the agency, with tail coverage handled differently by each agency. Some agencies provide free tail coverage; others do not. Always confirm malpractice coverage details before accepting an assignment, including policy limits, tail coverage provisions, and whether the policy covers the specific state where you will practice.

Locum tenens physicians are typically classified as independent contractors (1099) rather than employees (W-2). This means you are responsible for both the employer and employee portions of FICA taxes (15.3% on the first $168,600 of income, then 2.9% Medicare tax above that). However, 1099 status also allows significant tax deductions: travel expenses, lodging, meals during assignments, home office, health insurance premiums, retirement contributions to a solo 401(k) or SEP IRA, and all business-related expenses. Many locum physicians find that strategic deductions offset much of the additional self-employment tax burden.

Credentialing for locum tenens assignments typically takes 60-120 days, though some facilities can expedite the process to 30-45 days for urgent staffing needs. The process involves verification of medical education, residency training, board certification, state licensure, DEA registration, malpractice history, and references. Keeping a comprehensive, up-to-date credentials file with certified copies of all documents can significantly speed up the process. Some locum agencies maintain your credentials and can facilitate faster placement at facilities where they have established relationships.

Yes, many physicians do locum work as supplemental income alongside a permanent position. This is sometimes called "locum lite" or moonlighting. Common approaches include picking up weekend shifts, holiday coverage, or taking locum assignments during vacation weeks. Review your employment contract first — many have moonlighting clauses that require written approval or restrict the geographic area where you can practice. Also verify that your malpractice coverage extends to outside clinical work or confirm the locum agency provides separate coverage.