Sole Trader vs Limited Company for Locum GPs
What your NHS locum fees leave you, as a sole trader or through a limited company, counting the NHS pension a company gives up.
Illustrative estimates only, not tax, pension, or financial advice.
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See what it can do →What this calculator does
It runs the same year of NHS locum fees through both structures and shows what each leaves you: take-home pay, and what goes into a pension. Generic incorporation calculators all stop at the first number but as a locum GP it’s actually the unique ability to pay into the NHS pension, despite being self employed, which decides it.
Locum work is only NHS-pensionable when you invoice as a person. Invoice through a limited company and the practice stops paying the 14.38% employer contribution on 90% of your fee, and the work builds no NHS pension at all.
A worked example
If you earnt £100,000, with £5,000 of expenses, and were in the usual 12.5% NHS pension contribution tier, and assuming £1,500 a year of extra costs if running a company:
- As a sole trader you take home £59,661, and £24,192 goes into the NHS pension, £12,942 of it paid by practices on top of your fees. The year builds £1,667 a year of pension for life.
- Through a company paying a £12,570 salary and the same £11,250 into a private pension, you take home £56,827. That is £2,834 less, with £12,942 less going into your pension.
- Through a company paying nothing into a pension, take-home is £62,140, £2,479 more than the sole trader, in exchange for £24,192 a year not going into a pension.
When a company can still make sense
For income that could never be NHS-pensionable anyway: private medicals, medico-legal reports, teaching, media work. Many GPs keep their NHS locum sessions as a sole trader and put that work through a company alongside. Leaving profit in the company rather than paying it all out, which this calculator does not model, is the other case, and both are conversations for a specialist medical accountant.
The sole trader vs limited company guide goes through each part of the decision, and the NHS pension vs SIPP calculator shows what a private pension would need to return to match the NHS one.
Frequently asked questions
- Can a locum GP pension work done through a limited company?
- No. NHS Pensions only treats locum work as pensionable when the GP is engaged personally as a self-employed practitioner. Work invoiced through a limited company cannot go on a Form A, the practice pays no employer contribution, and the income builds no NHS pension.
- Does a limited company save a locum GP tax?
- On NHS work, usually not once the pension is counted. On the calculator's default £100,000 example, a company matching your NHS contribution into a private pension takes home £2,834 less than a sole trader. Paying nothing into a pension, it takes home £2,479 more, while £24,192 a year stops going into your pension.
- What salary should a locum GP's company pay?
- Most single-director companies pay a salary equal to the £12,570 personal allowance, which is free of income tax and employee National Insurance, costs 15% employer National Insurance above £5,000, and is deductible for corporation tax. The rest comes out as dividends. A company whose only employee is its director cannot claim the Employment Allowance.
- Does IR35 apply to locum GPs working through a company?
- It can. For IR35, GP practices providing NHS services count as public authorities, so the practice decides whether each engagement through your company is inside or outside IR35. Inside, it deducts income tax and National Insurance from your fee as if you were an employee, and most of the company's tax saving is gone. This calculator assumes every engagement is outside IR35, the company's best case. Sole traders are not affected.
Sources
Checked September 2026. Rates and factors change. The primary source wins if it disagrees with anything here.
- Corporation Tax rates and marginal relief, GOV.UK, 19% and 25% with marginal relief between £50,000 and £250,000
- Rates and thresholds for employers 2026 to 2027, GOV.UK, employer National Insurance and the Employment Allowance
- Tax on dividends, GOV.UK, the dividend allowance and 2026/27 rates
- GP locum Form A and Form B, NHSBSA, who can pension locum work and the 14.38% employer rate
Read the guide
Sole Trader vs Limited Company
Why NHS locum work through a company loses the NHS pension, 2026/27 company tax, IR35 explained, and worked figures at three fee levels.
Read guide →GP Locum Tax Guide
Every deduction that comes out of a newly qualified locum's fees: tax, Class 4 NI, student loan, pension, expenses and the first 31 January.
Read guide →NHS Pension vs SIPP
Compare the NHS 2015 CARE pension with investing the same contributions in a SIPP, income, break-even return, and death benefits.
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