Physician compensation comparison
Compare locum tenens and employed W2 compensation beyond the headline rate
Locum tenens rates can look larger than salary because the contractor may be replacing benefits, paid nonclinical time, payroll-tax sharing, malpractice coverage, and income continuity. An employed package can also hide employee premium costs, call expectations, and benefits that are worth less to a particular clinician.
Put both paths on an annual schedule first. Then run conservative and optimistic cases for shifts, unbilled weeks, expenses, and taxes.
How to use this tool
Build the employed package
Combine reliable salary and bonus with employer-funded benefits, then subtract your premiums.
Set a sustainable locum schedule
Use shifts and working weeks you could actually maintain after travel, credentialing, and time off.
Assign uncovered costs
Confirm who pays travel, lodging, malpractice, tail, licensing, credentialing, and CME.
Compare the break-even quote
Use the calculated shift rate as a starting point for contract review and scenario testing.
Contract terms can outweigh a small modeled edge
- Cancellation and minimum-shift guarantees
- Occurrence versus claims-made malpractice and tail obligations
- Travel reimbursement rules and taxable stipends
- Call, overtime, charting, and orientation compensation
Keep lifestyle assumptions visible
A dollar model cannot value schedule control, continuity of care, team relationships, administrative burden, or geographic flexibility. Treat those as separate decision criteria rather than burying them in a tax percentage.
Educational estimate only, not medical employment, legal, accounting, insurance, or tax advice. Review the actual agreement and obtain a complete multistate tax projection when applicable.
Sources and further reading
- IRS: Self-employment tax — Federal Social Security and Medicare rules for self-employed people.
- SSA: 2026 contribution and benefit base — 2026 Social Security wage base used in the estimate.
- IRS Publication 535 archive and business-expense guidance — Starting point for federal business-expense resources and successor publications.
Frequently asked questions
What should I use for employed benefits?
Include employer contributions you would otherwise need to replace: health coverage, retirement match or nonelective contributions, malpractice, disability, life insurance, CME, licensing, and other material benefits.
Does the calculator assume every locum physician is a 1099 contractor?
The modeled locum side is self-employed. Actual staffing arrangements can use W2 employment or another structure, so use the tool only when that assumption matches the offer.
How should I count travel reimbursement?
Enter only costs you expect to bear. Reimbursement and stipend tax treatment depends on the arrangement and facts; confirm it before excluding a cost or treating an amount as tax-free.
Does the break-even rate include retirement savings?
Only employer benefits entered on the W2 side are counted. Personal retirement contributions are savings, not a cost by themselves, but employer contributions and administrative costs can differ and should be reflected where appropriate.