A salary, a locum hourly rate and a private consultation fee are three different numbers. Comparing them directly can produce a misleading answer about which work is financially worthwhile.
The useful question is what you receive in exchange for the complete commitment, including costs, administration, benefits and uncertainty. That does not mean every decision should be reduced to money. It means the financial part should be calculated honestly so that professional and personal preferences can be considered separately.
This guide provides a comparison framework, not personalised tax, pension or investment advice. All numerical examples are hypothetical and are not current pay benchmarks.
Begin with the correct unit
For salaried work, the starting point is annual gross remuneration and the actual working commitment, alongside the benefit package. For self-employed or contracted work, start with receipts and subtract the relevant business costs before considering personal tax.
For private practice, distinguish the patient's total bill, the clinician's receipt and the practice's contribution after delivery costs. Hospital charges, investigations and other services may not all be income belonging to the doctor.
For company work, company turnover is not personal take-home pay. Keep the entity's receipts, expenses, tax and amounts extracted by the owner separate. A comparison that ignores these distinctions is not repaired by a more sophisticated spreadsheet.
Count all committed time
Include clinical sessions, preparation, documentation, travel, billing, meetings and work that continues after the scheduled finish. Record the actual pattern over several weeks rather than relying only on a contract's headline hours.
Do not count the same time twice. If administrative work is already included in a session, do not add it again as an external cost. Similarly, ensure annual leave is treated consistently when comparing annual earnings and hours worked.
For irregular work, use a range. A new clinic or unfamiliar placement may have uncertain administration and overruns. A single precise hourly figure can conceal that uncertainty rather than help resolve it.
Calculate a transparent pre-tax measure
One useful measure is receipts minus directly attributable costs, divided by total committed time. It is a contribution-based comparison, not a final take-home figure and not a complete valuation of employment benefits.
Imagine an illustrative employed role paying GBP80,000 over 1,600 actual committed hours in a year. The simple gross figure is GBP50 per hour. An illustrative contracting portfolio receiving GBP110,000 with GBP10,000 of costs over 1,800 hours produces GBP55.56 per hour before personal tax and other differences.
The contracting option is not automatically better. The comparison has not yet valued pension arrangements, paid leave, sickness protection, stability or the additional risk and administration. The calculation makes one part visible so that the remaining differences can be examined.
Treat benefits as real but not interchangeable with cash
Paid leave, pension arrangements, sickness provisions, professional development support and other contractual benefits can matter substantially. Establish what the actual role provides rather than assuming every employed or contracted arrangement is the same.
Be particularly careful with pension comparisons. Do not simply add a published employer contribution percentage to salary and present the result as cash available to spend. Obtain suitable advice on the nature and value of the relevant benefits.
For GP locums, the BMA's pension guidance is useful because the treatment depends on the work and engagement. A platform's invoice function does not itself make every session pensionable.
Include the cost of uncertainty
A confirmed substantive role and an unfilled calendar of potential locum sessions carry different income risk. A private clinic with established demand is different from one whose projections depend on paid marketing that has not been tested.
Use conservative assumptions for available work, cancellations and collection. Calculate a base case and a lower-volume case. Avoid funding fixed personal commitments from the most optimistic scenario.
Uncertainty also consumes time. Searching for shifts, negotiating terms and chasing payment may not generate revenue directly, but they belong in the working commitment. A higher nominal rate can partly compensate for that burden rather than represent pure additional value.
Understand tax status before comparing take-home pay
Different engagements can have different tax treatment. HMRC's off-payroll guidance explains that the rules operate on a contract-by-contract basis where relevant intermediary arrangements exist.
Do not assume that a platform label, company invoice or remote working arrangement settles status. The actual relationship and the applicable rules matter. A sole-trader arrangement also requires a proper assessment of employment status rather than reliance on terminology alone.
Use an accountant or adviser to model the full portfolio when the decision is material. Other income, deductions, pension choices and the timing of extraction can change a comparison that looks straightforward at the gross-fee level.
Compare private practice with contribution margin
Suppose a hypothetical private appointment brings GBP250 into the practice and costs GBP100 to deliver, leaving GBP150 contribution before fixed overheads, owner remuneration and tax. If the appointment and associated work consume 75 minutes, the contribution is GBP120 per hour on that limited measure.
The remaining question is how many such appointments can appropriately be delivered and what fixed costs support them. Empty clinic capacity, marketing, administration and facilities can materially reduce the overall return.
Do not compare this contribution figure with an employee's take-home pay. Use consistent stages of the calculation and explain what remains excluded. The apparent advantage of private work can shrink when the entire service is included.
Put sustainability into the decision explicitly
A short commute, predictable finish and supportive team may be worth accepting a lower nominal rate. Those are legitimate preferences, not failures to optimise income.
Likewise, a role that develops a capability you want may provide long-term value not captured by this year's receipts. Distinguish that investment from immediate earnings rather than claiming it must already be financially superior.
Write down the non-negotiables: recovery, family commitments, learning, clinical scope and the type of work you find sustainable. A numerical ranking should not override these boundaries simply because one option produces a slightly higher figure.
Build a repeatable decision sheet
For each opportunity, record the engagement type, expected receipts, costs, hours, benefits, uncertainty and qualitative fit. Add a note identifying the assumptions that would change the decision.
Review the actual outcome after a month or a quarter. Did the sessions overrun? Was income collected as expected? Did the administrative workload differ from the estimate? Improve the model using experience rather than repeatedly starting from advertised numbers.
iatroX CPD can help keep learning visible within a portfolio, but no app decides what your time is worth. A good comparison makes the trade-offs explicit and leaves room for the professional life you are trying to build.
Related reading: improving locum earnings without adding hours and private-practice break-even calculations.
FAQs
Can I compare a private consultation fee with a locum hourly rate?
Not directly. Subtract delivery costs and include associated work, then account for fixed overheads and other differences. The patient's fee is not automatically the doctor's personal income.
Is limited-company turnover comparable to salary?
No. Company expenses, tax and extraction are separate stages. Compare equivalent measures and obtain advice before drawing conclusions about personal take-home pay.
Should I always choose the highest effective hourly figure?
No. Benefits, income stability, clinical support, recovery and career development also matter. Use the calculation to clarify the financial trade-off, not to override professional or personal priorities.
Keep clinical learning visible within your working portfolio with iatroX CPD.