Locum Rate Audit
Independent pay estimate
What is that Inside IR35 rate really worth?
See how an advertised assignment rate becomes taxable salary, then compare it with the money likely to reach your bank account.
Estimated true take-home equivalent
Weekly take-home
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Annual take-home
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Where the assignment rate goes
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Locum GP and consultant Inside IR35 take-home pay explained
A locum job can look extremely attractive when an agency quotes an hourly or daily rate. The difficulty is that an Inside IR35 umbrella assignment rate is not the same thing as a normal employee's gross wage. It is the larger amount paid to the umbrella company to cover your salary and certain employment costs. If you compare that figure directly with a salaried post, a bank shift or an outside-IR35 company rate, you may overestimate what the placement is worth.
How to use the Locum GP Inside IR35 calculator
Start with the rate shown in the advert, agency email or Key Information Document. Select Hourly if the agency has offered a rate such as £90 per hour. Select Daily for a figure such as £750 per day. When you choose a daily rate, enter the number of paid hours that make up that day. This matters because a £750 eight-hour day is worth £93.75 for each paid hour, whereas the same fee for a ten-hour day is worth only £75 per hour.
Next, enter the hours you expect to work in an average paid week. Use paid hours rather than the time you spend travelling or completing unpaid administration. Enter the number of weeks you realistically expect to work during the tax year. A locum may work 46 paid weeks rather than 52 after allowing for annual leave, study, illness, gaps between placements and family commitments. The tool uses your paid weeks to calculate annual assignment income, which is important because Income Tax is based on annual earnings.
Finally, enter the umbrella company's margin. A margin is the fee charged for operating payroll and employing you. It may be quoted weekly, monthly or per payslip, so convert it into a weekly amount before entering it. The calculator then displays estimated annual gross salary, employer costs, PAYE Income Tax, employee National Insurance and net pay. The large result at the top is the estimated true take-home hourly equivalent: annual net pay divided by your total paid hours.
Why the advertised assignment rate is not your gross salary
When you work through an umbrella company, the agency normally pays the umbrella an assignment rate. The umbrella becomes your employer and pays you through PAYE. Before it can establish your taxable gross wage, it has to account for costs associated with employing you. These may include employer's National Insurance, the Apprenticeship Levy where applicable, the umbrella margin and other items shown in the contractual reconciliation statement.
Employer's National Insurance and employee National Insurance are different charges. Employer NI is an employment cost that sits between the assignment income and your gross wage. Employee NI is deducted later from your gross wage on the payslip. Seeing both is not automatically double charging. However, an agency should not describe an assignment rate as your gross salary and then unexpectedly remove employer costs. Ask for the agency's Key Information Document before accepting a placement because it should illustrate the assignment rate, employment costs, minimum expected gross pay and deductions.
Inside IR35 is often used loosely to describe any PAYE or umbrella engagement, but the precise contractual arrangement matters. Under the off-payroll working rules, the organisation responsible for payment may have to operate PAYE because the engagement resembles employment for tax purposes. IR35 status concerns tax treatment; it does not by itself guarantee the full employment rights, pension arrangements or benefits attached to a permanent NHS contract.
How the calculator works out employer costs, PAYE and NI
The calculation begins with your rate multiplied by weekly hours and paid weeks. It removes the umbrella margin, then works backwards to find the gross salary that can be supported after employer NI and the levy. This reverse calculation is necessary because employer NI is itself calculated from gross pay above the employer threshold. Simply subtracting 15% from the whole assignment rate would be a rough shortcut and would not treat the threshold correctly.
For the 2026/27 tax year, the default employer NI rate in the tool is 15%, with a £5,000 annual secondary threshold. The Apprenticeship Levy field defaults to 0.5%. The levy applies to qualifying employers and is subject to an employer-level annual allowance, so the way it appears in an umbrella reconciliation may depend on the provider. Both percentages are editable so that you can reproduce the figures in a real assignment document rather than forcing every contract into one assumption.
Once gross pay has been estimated, the tool applies the standard Income Tax bands for England, Wales and Northern Ireland. It includes the reduction of the Personal Allowance when adjusted net income exceeds £100,000. The allowance falls by £1 for every £2 above that level and can disappear entirely. This creates the well-known high effective marginal tax rate in the taper zone. Employee Class 1 NI is then estimated at 8% between the primary threshold and upper earnings limit and 2% above it.
Actual PAYE is calculated by payroll period and normally works cumulatively under your tax code, whereas this page uses an annualised estimate. Your payslip can therefore differ because of rounding, irregular weeks, emergency tax, previous employment, benefits, allowable expenses, several concurrent jobs or a non-standard tax code. Scottish taxpayers have different Income Tax bands and should not use the displayed PAYE figure as a Scottish tax estimate.
How a medical locum can audit an advertised placement
Do not judge a placement by the headline rate alone. First confirm whether the quoted number is an umbrella assignment rate, PAYE gross rate, direct-engagement rate or fee payable to a limited company. Ask whether holiday pay is paid on top, advanced with each payslip or retained until leave is taken. Holiday pay should be clearly identified; it is not an umbrella profit and should not vanish inside an unexplained rate.
Check the margin, pay frequency and whether a margin is charged for every payslip. Look for employer pension costs, employee workplace pension deductions, professional indemnity requirements, agency fees, expenses and any student loan or postgraduate loan deductions. For doctors with NHS employment elsewhere, the calculator's assumption of one job can be especially important: your Personal Allowance may already be allocated to your substantive post, and additional locum earnings may be taxed at a higher marginal rate.
Compare the estimated take-home hourly equivalent with the workload and risks of the role. A GP placement may include unpaid results, referral letters or home visits after the booked session. A consultant shift may involve on-call availability, handover, travel or work beyond the scheduled finish. Divide expected take-home pay by the hours you will actually commit, not merely the most favourable hours in the advert.
Before starting, request the Key Information Document, assignment schedule and umbrella employment contract. After the first payment, reconcile the timesheet, agency remittance, umbrella reconciliation statement and payslip. The assignment income should lead transparently to employment costs, gross pay and employee deductions. Challenge unfamiliar deductions promptly and keep copies of the documents.
Hourly and daily locum rate examples
Imagine a locum GP is offered £100 per hour for 40 paid hours per week and expects to work 46 weeks. The headline assignment income is £184,000, but that is not the doctor's taxable salary. The weekly umbrella margins, employer NI and levy are accounted for before gross pay is produced. PAYE and employee NI are then deducted from gross pay. The calculator turns what remains back into an hourly number, making it easier to compare the offer with another agency quoting a true PAYE gross rate.
For a daily example, suppose a consultant is offered £800 per day. If a paid day is eight hours, the assignment-rate equivalent is £100 per hour. If the shift regularly lasts ten hours but only attracts the same daily payment, the practical assignment rate is £80 per hour even before umbrella employment costs and personal taxes. Selecting Daily and changing the paid day length makes this difference visible immediately.
These examples are comparisons rather than promises of net pay. They are most useful when the same assumptions are entered for each offer. Keep weeks, hours, margin and day length consistent, then compare the highlighted take-home hourly equivalent and the annual breakdown.
Frequently asked questions
Is the advertised Inside IR35 rate the amount I am taxed on?
Not usually when it is an umbrella assignment rate. Employer costs and the umbrella margin are normally reconciled first. PAYE Income Tax and employee NI are applied to the resulting gross pay.
Why does the calculator deduct employer's NI?
It does not treat employer NI as an employee payslip deduction. It shows it as an employment cost funded from the higher assignment rate before your gross salary is established. The distinction should be clear in the agency and umbrella documents.
Does this calculator include NHS pension contributions?
No. Umbrella employment is not automatically pensionable under the NHS Pension Scheme. The estimate also excludes workplace pension deductions. Check your contract and pension enrolment information.
Does it include holiday pay?
No separate holiday-pay adjustment is made because contracts handle it differently. Check whether holiday pay is additional, advanced or accrued, and compare the calculator with the reconciliation supplied for your exact placement.
Can Scottish locum doctors use it?
The employer-cost conversion is still informative, but the PAYE result uses England, Wales and Northern Ireland Income Tax bands. Scottish taxpayers should obtain a calculation using Scottish bands before relying on a take-home estimate.
The most useful question to ask an agency
“Is this figure the umbrella assignment rate or my gross taxable pay, and can you send me the Key Information Document showing every employment cost?” A clear answer makes different locum GP and consultant offers much easier to compare.