What Does Being a Locum Tenens Clinician Cost? An Overhead Budget

A directional all-in annual self-employed overhead budget runs roughly $15,000-$60,000+ before health insurance and retirement, and $40,000-$100,000+ once those are included. The honest answer is that it depends heavily on three things: (a) whether you take agency assignments where the staffing agency pays malpractice plus licensing and credentialing, versus true independent contracting where you carry those costs yourself; (b) your specialty, since malpractice premiums swing more than tenfold; and (c) how many states you work in, because each one can add a license, possibly a separate DEA registration, and a nonresident tax return. The table below is the working budget — every category is explained in its own section, and most of these costs are tax-deductible (the distinct angle versus our deductions guide: this guide is what it costs, the deductions guide is what you can legally write off). Figures are directional 2026 ranges, not quotes for your situation.

On most agency locum assignments, the staffing agency pays for malpractice during the assignment — typically a claims-made policy at $1M per occurrence / $3M aggregate. Do not assume every locum pays their own malpractice. CompHealth, Barton Associates, and AMN Healthcare all provide claims-made $1M/$3M coverage on their assignments. The self-carried numbers in the table apply to (a) true independent contractors who bill facilities directly, (b) moonlighting or private clients, or (c) gap coverage between assignments. When you do self-carry, premiums swing enormously by specialty and state: PracticeLink puts most estimates in the $7,500-$20,000 range, with OB-GYN at $60,000-$100,000+ and neurosurgery at $150,000-$200,000+, and primary care toward the lower end. CRNAs carrying their own coverage independently typically run $3,000-$10,000+. Two notes the public data is thin on: anesthesiology generally sits mid-range, well below OB and surgery; and Anesthesiologist Assistants (AAs) are typically covered under the supervising anesthesiologist's or group's policy rather than buying their own. Whether premiums are claims-made or occurrence drives whether you will later owe tail coverage — covered in the next section.

Tail coverage (an Extended Reporting Period, or ERP) is a one-time cost — not an annual one — and it is the trap most locums miss. A claims-made policy only covers claims reported while the policy is active, so when that coverage ends or non-renews, you need a tail to cover claims filed later for incidents during the policy period. Budget roughly 150%-300% of the final year's premium, charged once: a $12,000 family-medicine premium implies roughly an $18,000-$36,000 tail (lower-risk specialties cluster near 150-200%, higher-risk surgical lines near 200-300%). You do not owe a tail if the policy was occurrence-based, or if claims-made coverage stays continuous (for example, a new carrier provides 'prior acts' or nose coverage). Critically, confirm in writing who is contractually responsible: on agency assignments the agency often carries it, while self-carried independents owe it themselves. For the full mechanics, see our locum tenens malpractice tail coverage guide.

Licensing is per state, and the cost multiplies with the number of states you work in. Expect roughly $300-$800 per state for the medical license itself, plus a one-time Interstate Medical Licensure Compact (IMLC) Letter of Qualification (LOQ) of $700, which is valid for 365 days and lets eligible physicians obtain licenses in participating states faster (per-state fees still apply on top). DEA registration is $888 for a three-year practitioner registration (Form 224), about $296 per year — and it is per registered address: some states require a separate state controlled-substance registration, and clinicians prescribing controlled substances across multiple states may need additional DEA registrations, which multiplies the cost for multi-state locums. All of these are deductible business expenses. Note that the IMLC applies to physicians; CRNAs and AAs follow their own state licensure pathways.

These are the recurring administrative costs of running yourself as a business, and together they typically run a few thousand dollars a year. CME spend is roughly $1,900-$4,000 per year across courses, travel, and materials, plus Maintenance of Certification (MOC) fees — ABIM charges $220 for a first certificate and $120 for each additional certificate in 2026. Accounting and tax prep for a clinician running an S-corp runs $1,200-$4,000 (an 1120-S return plus K-1s), with optional bookkeeping at $300-$2,000 per month if you use it; more state returns push the cost up. Entity and franchise fees range from $0 to $800 per year depending on the state of formation: California's LLC minimum franchise tax is $800, Delaware is $300, Texas charges $0 in franchise tax below its no-tax-due threshold (a Public Information Report is still required), and many states fall between $0 and $300. Two things to get right here: a single-member LLC is a disregarded entity, so the franchise fee buys liability separation for business and contract matters — not tax savings, and not protection from a personal malpractice claim against you. Tax savings come only from a valid S-corp election (reasonable compensation plus distributions); see our locum tenens S-corp guide. Whether a PLLC or PC is required, whether a state recognizes the S-corp election, and franchise-tax treatment all vary by state.

Multi-state tax is not double taxation, but it is not free either. The mechanic: you generally file a nonresident return in each work state, and your home state grants a credit for taxes paid elsewhere — that reduces, but does not eliminate, home-state tax on that income, and if a work state's rate exceeds your home rate, the excess is a real net cost. Nine states levy no income tax (AK, FL, NV, NH, SD, TN, TX, WA, WY), so work there adds no state income tax. The largest recurring cost is the added tax-prep complexity from more state returns, which is itself deductible. On retirement: the 2026 §415(c) total annual addition limit is $72,000, the 401(k) elective deferral is $24,500, the age-50 catch-up is $8,000, and the ages-60-63 super catch-up is $11,250. A Solo 401(k) generally beats a SEP-IRA at the same income for locums (it allows a Roth option and a higher contribution via the employee deferral; a SEP-IRA cannot take Roth or employee deferrals). Two landmines: under SECURE 2.0, catch-up contributions must be Roth (after-tax) if your prior-year FICA (Social Security) wages from the plan-sponsoring employer exceeded $150,000 (2026) — this hinges on FICA wages, so it bites high-earning S-corp locums (who pay themselves W-2 wages and base contributions on those wages) but not pure sole proprietors, who have no FICA wages on self-employment income. And on QBI: physicians, CRNAs, and AAs are a specified service trade or business (SSTB), so the §199A QBI deduction fully phases out above $276,750 single / $553,500 MFJ (Rev. Proc. 2025-32) — for most full-time locums it is $0 (the OBBBA $400 minimum deduction does not rescue an SSTB above the phase-out, because its QBI is reduced to zero), so do not assume a QBI deduction offsets overhead. It matters mainly where large pre-tax retirement contributions can pull taxable income below the phase-out. Finally, note the deductibility caveat: retirement and the self-employed health insurance deduction are above-the-line adjustments with income and earned-income limits, distinct from the ordinary Schedule C business expenses in our deductions guide.

Health insurance is often the single largest line item once you are off an employer plan, and it is unsubsidized for most locums earning above ACA subsidy thresholds. Budget roughly $7,300-$12,000+ per year for single coverage and $20,000-$30,000+ for a family. For 2026, the average lowest-cost Silver ACA premium is about $611 per month for a single person. As an employer-coverage benchmark, the KFF 2025 Employer Health Benefits Survey put average annual premiums at $9,325 for single and $26,993 for family coverage. The good news for the self-employed: the self-employed health insurance deduction is an above-the-line adjustment (not a Schedule C business expense), so it reduces adjusted gross income directly, subject to earned-income limits.