The Financial Perks of Being a Locum Tenens Provider

Posted on: April 22, 2021

written by

Tayla Holman

More healthcare providers are becoming interested in locum tenens, and for good reason. While locum tenens offers providers flexibility and can help improve job satisfaction, there are also financial perks to taking on locum tenens assignments.

Increased Pay Rates

According to the National Association of Locum Tenens Organizations (NALTO), the pay rates for locum tenens providers are market-driven. That means the pay rates will reflect the demand for a particular provider. For example, if there is a shortage of specialists, such as anesthesiologists, being a locum tenens anesthesiologist would make you very attractive to a hospital in need of one. How much you are able to make might vary slightly by geographical location or patient volume, but there is also room for negotiation. Since you are not an employee of the hospital or staffing agency, you are not locked into a flat salary rate. You can accept or decline assignments based on your desired pay rate. Locum tenens is also typically paid by the day, but you may be paid extra for longer shifts, weeknight or weekend calls, according to NALTO.

As a locum tenens provider, your hourly or daily rate will typically be higher than that of a full-time employee at the same facility. Your agency will also typically cover costs such as malpractice insurance, licensing, travel, and accommodations.

Earn Extra Income

If you have a full-time, salaried job, locum tenens work can also be a great way to earn extra income. This can help you build your savings or pay down debt. According to the Association of American Medical Colleges, the average medical school debt for 2019 graduates was $201,490. So if you have a lot of student loan debt, locum tenens work can help you pay them down faster. How much extra income you can earn will depend on how much additional work you are willing to take on, giving you more control over your earning potential.

Customize Retirement Accounts

According to Finity Group, a wealth management firm, another benefit of locum tenens work is the ability to customize and max out your retirement account funding. Locum tenens providers are self-employed independent contractors, meaning they are both the employer and the employee. This means you would be able to contribute $57,000 to a self-employed 401k account, compared to only $19,500 for an employer-sponsored account.

There are also some tax advantages to being a locum tenens provider, according to White Coat Investor. You can contribute to your retirement account using pre-tax dollars, which is often the largest tax deduction for physicians. If you contribute to pre-tax accounts while you are young, you can withdraw money in retirement at lower tax rates. For certain accounts, you may even be able to make tax-free withdrawals.

As a locum tenens provider, you are not confined to just a 401k. You can also set up an SEP-IRA or Backdoor Roth Ira. You can also take advantage of a Health Savings Account (HSA). The money is protected from taxes as it grows, according to White Coat Investor, and if you spend it on healthcare now or in retirement, it will come out tax-free.

There are several financial perks to being a locum tenens provider. Once you decide which ones are the most appealing to you, you can check out Barton Associates’ Locum Tenens Salary Tool to learn how much you can make as a locum tenens provider.

Want to learn more about locum tenens with Barton Associates? Fill out the form and one of our representatives will reach out to you!

About Tayla Holman

Tayla Holman is a Boston-based writer and editor, specializing in health and technology. She received her B.A. in print journalism and English from Hofstra University, and her M.S. in health communication from Boston University. You can find her at or @TaylaHolman on Twitter.

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