The usual advice is that a contractor should charge 25–40% more than a salary. That rule of thumb is built around ordinary incomes, where the extra self-employment tax alone costs 7.5% of take-home. Physician pay works differently. Above the Social Security wage base the tax cost of working on a 1099 stops growing, so at locum incomes it is a small, nearly fixed amount. What decides whether locum work beats an employed offer is the benefits you give up, how many shifts you actually fill and, for married doctors, the QBI deduction.
Short answer (single filer, 2026, no state income tax): a $300,000 salary leaves $215,177 after tax. To take home the same as a locum you need $315,113 of 1099 profit, only 5.0% more. Over a 7-on/7-off year of 182 shifts that is $1,731 a shift, against the salary's $1,648. If the job also came with $40,000 a year of benefits, you need $379,520 (26.5% more), or $2,085 a shift.
Federal tax only, as in a state with no income tax. Standard deduction, no retirement contributions on either side, no QBI deduction. "Profit" is locum pay after any expenses you cover yourself. Runs in your browser; nothing is sent anywhere.
An employee and a locum pay into Social Security and Medicare at the same combined 15.3%. The employee pays 7.65% and the employer quietly pays the other 7.65%; the locum pays both halves as self-employment tax, on 92.35% of profit, and deducts half of it from income. At ordinary incomes that costs the contractor about 7.5% of take-home.
The 12.4% Social Security part stops at the 2026 wage base of $184,500. An employee reaches it at a $184,500 salary; a locum reaches it at $199,783 of profit (92.35% of which is $184,500). Above that, both pay only Medicare: 2.9% of 92.35% of profit for the locum against 1.45% for the employee, plus the same 0.9% Additional Medicare Tax above $200,000 single or $250,000 married. On the next $1,000 earned at $300,000, the locum pays $379 of tax and the employee $374. The gap almost stops growing:
| Same pay | W-2 total tax | Locum total tax | Extra as a locum |
|---|---|---|---|
| $200,000 | $51,073 | $61,580 | $10,507 |
| $250,000 | $66,818 | $76,379 | $9,561 |
| $300,000 | $84,823 | $94,209 | $9,386 |
| $400,000 | $122,173 | $132,104 | $9,931 |
| $500,000 | $159,523 | $169,999 | $10,476 |
Single filer, 2026, no state income tax, standard deduction, no QBI deduction. Federal income tax and Social Security and Medicare only.
So at physician incomes, working on a 1099 costs roughly $9,400–$10,500 a year in extra tax, whether you earn $250,000 or $500,000. As a share of pay it keeps falling.
The question that matters for an offer is the reverse: how much locum profit leaves you with the same money as the salary? This is the profit whose take-home equals the salary's, found by search:
| W-2 salary | Take-home on the salary | Locum profit for the same take-home | How much more |
|---|---|---|---|
| $200,000 | $148,927 | $214,268 | 7.1% |
| $250,000 | $183,182 | $264,698 | 5.9% |
| $300,000 | $215,177 | $315,113 | 5.0% |
| $350,000 | $246,502 | $365,552 | 4.4% |
| $400,000 | $277,827 | $415,991 | 4.0% |
| $500,000 | $340,477 | $516,869 | 3.4% |
Single filer, 2026, no state income tax. Married filers come out within a few tenths of a point: 5.1% at $300,000. At $150,000 the figure is 7.5%; see W-2 vs 1099 for why it holds steady below the wage base.
Locum work is quoted per shift or per hour, not per year, so turn the annual figure into a shift rate. A 7-on/7-off hospitalist schedule is 182 shifts a year (26 weeks of 7). Dividing by the same 182 shifts compares the two jobs like for like:
| W-2 salary | Salary per shift (182) | Locum rate, tax only | Locum rate replacing $40,000 of benefits |
|---|---|---|---|
| $250,000 | $1,374 | $1,454 | $1,802 |
| $300,000 | $1,648 | $1,731 | $2,085 |
| $350,000 | $1,923 | $2,009 | $2,362 |
| $400,000 | $2,198 | $2,286 | $2,640 |
Two adjustments decide whether those rates are realistic for you:
Tax explains about 5 points of the difference at $300,000. Everything else is the package an employer pays for and a locum buys out of after-tax money. Here is the profit that matches a $300,000 salary for different amounts of benefits:
| Benefits to replace each year | Locum profit needed | More than the salary | Per shift (182) |
|---|---|---|---|
| None (tax only) | $315,113 | 5.0% | $1,731 |
| $20,000 | $347,317 | 15.8% | $1,908 |
| $40,000 | $379,520 | 26.5% | $2,085 |
| $60,000 | $411,724 | 37.2% | $2,262 |
Each $20,000 of benefits adds about 10–11 points, twice what tax adds in total. So the number worth working out carefully is your own benefits figure. From an employed offer or your current job, count what the employer pays:
The table treats benefits as spending out of take-home pay. Self-employed health insurance premiums are deductible for income tax if you are not eligible for an employer plan (including a spouse's), so the true cost of replacing health cover is somewhat lower. Paid time off is handled by the shift count, not here.
Sole proprietors can usually deduct 20% of their business profit, the qualified business income (QBI) deduction. Medicine is a "specified service" business, so for doctors the deduction phases out between $201,750 and $276,750 of taxable income for single filers, and between $403,500 and $553,500 for married couples filing jointly (2026). Our calculator leaves it out, so these are the lines it does not show:
| Same pay, married | Extra tax as a locum | QBI deduction saves | Result |
|---|---|---|---|
| $250,000 | $11,128 | $8,933 | Locum pays $2,195 more |
| $300,000 | $11,178 | $11,914 | Locum pays $736 less |
| $350,000 | $11,547 | $14,465 | Locum pays $2,918 less |
| $400,000 | $11,916 | $16,822 | Locum pays $4,906 less |
Three things shrink this in practice. A spouse's income counts toward the same threshold, so a two-physician household can be well past it. Solo 401(k) contributions and self-employed health insurance reduce the profit the 20% is figured on. And the deduction lowers income tax only; the self-employment tax is still paid in full.
A locum can open a Solo 401(k) and contribute as both employee and employer: up to $24,500 of employee deferrals in 2026, plus an employer contribution of up to 20% of net self-employment earnings, within a $72,000 total. That is often more room than an employed physician's plan gives, and every dollar comes off income tax.
If you keep a W-2 job alongside locum shifts, the $24,500 employee deferral is one limit per person across all your 401(k) and 403(b) plans, so deferrals at the job use it up. The employer contribution to your Solo 401(k) is separate and still available. A 457(b) at a hospital has its own limit. See Solo 401(k) vs SEP-IRA for the limits at each income.
The 1099 physician tax calculator covers your state, expenses, Solo 401(k) contributions and whether you still get the QBI deduction.
Open the physician calculator →About 5% more profit for the same take-home: $315,113 for a single filer in a state with no income tax. If the salaried job included $40,000 a year of benefits, you need $379,520, 26.5% more.
No, smaller as a share of pay. Social Security tax stops at the $184,500 wage base, so above about $200,000 the extra tax on a 1099 is roughly fixed: $9,386 at $300,000 and $10,476 at $500,000 for a single filer.
Over 182 shifts, a 7-on/7-off year, about $1,731 a shift matches the take-home, or $2,085 if you also replace $40,000 of benefits. The salary itself works out to $1,648 a shift.
Single filers lose it between $201,750 and $276,750 of taxable income in 2026. Married couples keep it up to $403,500, and with no other household income it saves a $300,000 locum $11,914, more than the $11,178 of extra tax.
Most agencies provide malpractice coverage for the assignments they book, often including tail coverage, and usually pay travel and housing too. If you contract directly with a hospital or group you may have to buy your own; the premium is then a deductible business expense.
Figures come from the same 2026 engine as the calculator: IRS Revenue Procedure 2025-32 brackets and standard deduction, the $184,500 Social Security wage base, the 0.9% Additional Medicare Tax, and no state income tax unless stated. QBI thresholds are the 2026 amounts for specified service businesses. See the methodology. For informational purposes only; consult a CPA for your situation.