{
  "slug": "locum-tenens-vs-hire-cost",
  "title": "Locum Tenens vs Permanent Hire Cost Calculator",
  "heading": "Locum Tenens vs Permanent Hire Cost Comparison Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/locum-tenens-vs-hire-cost",
  "summary": "Compare the true cost of a locum contract against a permanent hire over a coverage period.",
  "description": "Locum tenens day rates look expensive next to a permanent physician's annualized salary, but that comparison misses agency fees baked into the day rate, travel and housing costs, and — on the permanent-hire side — recruiting fees, signing bonuses, benefits load, and the productivity ramp period most new hires need before reaching full billing capacity. This calculator totals the true cost of covering a defined period (say, 6 months) with a locum against hiring a permanent provider for that same period, including the parts of permanent-hire cost that a locum comparison usually ignores, like the 3-6 month ramp-up during which a new permanent hire bills below capacity while still drawing full salary. It's most useful for maternity leave coverage, sabbaticals, unexpected departures, or bridging a credentialing delay, where the real question isn't 'which is cheaper forever' but 'which is cheaper for this specific window.' For genuinely temporary gaps under about a year, locum coverage is very often cheaper once you include hiring and ramp costs on the permanent side; for permanent vacancies, the math flips once the coverage period stretches past 12-18 months since locum day rates carry a persistent premium that permanent salary doesn't.",
  "formula": "Locum total cost = (day rate × days) + travel/housing + agency fee. Permanent hire total cost = (salary+benefits × period) + recruiting fee + signing bonus − productivity loss adjustment during ramp.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=locum-tenens-vs-hire-cost",
  "inputs": [
    {
      "id": "coverageDays",
      "label": "Coverage period (working days)",
      "kind": "number",
      "hint": null,
      "default": 130,
      "unit": null,
      "min": 1,
      "max": null
    },
    {
      "id": "locumDayRate",
      "label": "Locum day rate",
      "kind": "number",
      "hint": null,
      "default": 1400,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "locumTravelMonthly",
      "label": "Locum travel & housing cost per month",
      "kind": "number",
      "hint": null,
      "default": 3500,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "permanentAnnualCost",
      "label": "Permanent hire annual salary + benefits",
      "kind": "number",
      "hint": null,
      "default": 260000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "recruitingFee",
      "label": "Recruiting fee / signing bonus (one-time)",
      "kind": "number",
      "hint": null,
      "default": 30000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "rampMonths",
      "label": "Months at reduced productivity for new hire",
      "kind": "number",
      "hint": null,
      "default": 4,
      "unit": null,
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "difference",
      "label": "Cost difference (permanent minus locum)",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "locumTotal",
      "label": "Total locum coverage cost",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "permanentTotal",
      "label": "Total permanent-hire cost for period",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "rampPenalty",
      "label": "Productivity ramp cost (permanent hire)",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Coverage period (working days): 130",
      "Locum day rate: 1400 $",
      "Locum travel & housing cost per month: 3500 $",
      "Permanent hire annual salary + benefits: 260000 $",
      "Recruiting fee / signing bonus (one-time): 30000 $",
      "Months at reduced productivity for new hire: 4"
    ],
    "outputs": [
      "Cost difference (permanent minus locum): -$8,301",
      "Total locum coverage cost: $202,968",
      "Total permanent-hire cost for period: $194,667",
      "Productivity ramp cost (permanent hire): $34,667"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter coverage period (working days).",
      "Enter locum day rate ($).",
      "Enter locum travel & housing cost per month ($).",
      "Enter permanent hire annual salary + benefits ($).",
      "Enter recruiting fee / signing bonus (one-time) ($).",
      "Enter months at reduced productivity for new hire.",
      "Read your cost difference (permanent minus locum) on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "coverageDays": 80,
        "locumDayRate": 850,
        "locumTravelMonthly": 2000,
        "permanentAnnualCost": 155000,
        "recruitingFee": 18000,
        "rampMonths": 2
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "coverageDays": 130,
        "locumDayRate": 1400,
        "locumTravelMonthly": 3500,
        "permanentAnnualCost": 260000,
        "recruitingFee": 30000,
        "rampMonths": 4
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "coverageDays": 210,
        "locumDayRate": 2250,
        "locumTravelMonthly": 5500,
        "permanentAnnualCost": 415000,
        "recruitingFee": 48000,
        "rampMonths": 6
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What's a typical locum tenens day rate for physicians?",
      "a": "Physician locum day rates commonly run $1,200-2,500 depending on specialty, with surgical and anesthesia specialties running higher. Agencies typically also cover travel, housing, and malpractice, which is why the all-in day rate is higher than the physician's direct take-home per day."
    },
    {
      "q": "Does the productivity ramp penalty apply to every new hire?",
      "a": "Yes, to some degree — new physicians take time to build a patient panel, learn the EHR and workflows, and reach the referral volume a departing physician had. Specialties with high procedural volume or established patient panels being transferred ramp faster than those building a panel from scratch."
    },
    {
      "q": "When does locum coverage stop being the cheaper option?",
      "a": "Once a coverage period stretches past roughly 12-18 months, the persistent locum day-rate premium (which includes the agency's margin) usually exceeds the one-time costs of a permanent hire, even accounting for ramp-up. Long-term or permanent vacancies should default toward hiring unless recruitment is genuinely not possible."
    },
    {
      "q": "Should malpractice tail coverage be included in this comparison?",
      "a": "For permanent hires with claims-made malpractice policies, factor in tail coverage cost if the position doesn't work out and the provider leaves — this can run 150-300% of one year's premium and is a real cost risk that pure locum coverage (where the agency handles malpractice) doesn't carry."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/credentialing-delay-revenue-loss",
    "https://www.revenuelab.fyi/toolbox/pt-clinic-visits-per-therapist"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Locum Tenens vs Permanent Hire Cost Calculator (https://www.revenuelab.fyi/toolbox/locum-tenens-vs-hire-cost)"
}