Locum payment options

How can veterinary locums be paid?


Veterinary locums can be paid through Recruit4vets’ PAYE payroll, work through an umbrella company, provide services through their own limited company, or work as a sole trader.

The options available depend first on what the practice will accept. The practices we work with accept PAYE and umbrella arrangements, but some do not accept sole traders or limited companies. There are also tax rules governing how an agency can pay a locum. For that reason, having a company or being registered as self-employed does not mean you can use that arrangement for every booking.

Before accepting an assignment, check which options the practice permits, who will engage and pay you, and how the quoted rate translates into your actual income.

PAYE through Recruit4vets

With Recruit4vets’ PAYE option, we arrange your assignment and pay you weekly for the work you complete. We process your pay through payroll, deduct Income Tax and employee National Insurance where applicable, and provide a payslip showing your wages and deductions. You do not need to set up a business or send us invoices for these assignments.

For eligible assignments, holiday pay is rolled up. It is paid alongside your weekly wages and shown separately on your payslip. You can still take holiday, but you would not normally receive another holiday payment when you take that time off, because the holiday pay has already been paid to you. You may want to set that money aside to provide income during a break.

Depending on your circumstances, you may qualify for Statutory Sick Pay and workplace pension enrolment. PAYE can be a straightforward choice if you want to work as a locum without managing business accounts, invoices and tax payments yourself.

Practices accept the PAYE route, so it is generally available when considering a Recruit4vets booking. You should still check the assignment’s rate, dates, hours and cancellation terms. Being paid through PAYE does not guarantee future bookings or a fixed number of hours.

Sole trader

As a sole trader, you run a business in your own name. You are responsible for keeping records, issuing invoices where appropriate, completing any required tax returns and paying the tax and National Insurance due. You are also personally responsible for your business debts and obligations.

This arrangement may suit a locum who wants to manage their own business without setting up a limited company. When comparing rates, remember that an invoice amount is business income, not take-home pay. You need to allow for tax, business costs and periods when you are not working.

Not every practice accepts sole trader locums. Whether a practice will engage someone on this basis is the practice’s decision. There is a separate question about how the booking can be arranged and paid: HMRC’s agency rules mean Recruit4vets cannot always pay their invoices directly, even when that locum is registered as self-employed.

That does not necessarily prevent us from helping you secure the work. Where the practice accepts a sole trader arrangement and Recruit4vets cannot pay you on that basis, we may still be able to introduce you to the practice for it to engage and pay you directly. The contracting, invoicing and payment arrangements would need to be agreed with the practice before you start.

Self-employment is assessed by looking at the actual arrangement; it is not established simply by registering as a sole trader or submitting an invoice. If you are interested in a particular booking, tell us you would prefer to work as a sole trader. We can establish whether the practice accepts that route and explain what arrangement is possible for that assignment.

Limited company

Some locums provide services through their own limited company, often called a personal service company or PSC. The company receives payment for the work, and you are responsible for managing the company and how it pays you.

A limited company is a separate legal entity, but running one involves additional administration and costs. These can include company accounts, tax returns, payroll, accountancy fees and any applicable VAT obligations. A company invoice rate should therefore not be compared directly with a PAYE wage without considering those costs and the tax position.

Some practices do not accept locums working through limited companies. That is a decision for the practice, so check its position before assuming your company can be used for a booking. Where the practice does accept a limited company, Recruit4vets can arrange payment to the company, subject to the applicable terms and tax treatment.

The off-payroll working rules, commonly called IR35, must also be considered. They assess whether you would be treated as an employee for tax purposes if you provided the services directly to the client. The position is assessed for each assignment. Depending on the client, either the client or your company is responsible for determining whether the rules apply. If an assignment falls within the rules, Income Tax and employee National Insurance may need to be deducted from the payment for that work.

Using a limited company does not automatically produce a lower tax bill. Before agreeing to a booking, establish whether the practice accepts company contractors, how the assignment has been assessed and what rate and payment terms apply. An accountant familiar with contract work can help you assess whether this route suits your circumstances.

Umbrella company

An umbrella company generally employs you and pays your wages through PAYE. Recruit4vets arranges the assignment, while the umbrella company handles your employment and payroll. This can appeal to locums who want PAYE pay through an umbrella rather than Recruit4vets’ payroll.

Practices accept umbrella arrangements, making this another generally available option for Recruit4vets bookings. Recruit4vets can arrange payment through the umbrella company. You should confirm which company will employ and pay you, and who to contact if you have a question about your payslip.

An umbrella assignment rate is not the same as your gross wage or take-home pay. The umbrella accounts for its margin and employment costs from the assignment rate before calculating your gross pay. Income Tax, employee National Insurance and any other applicable employee deductions are then taken from your gross pay.

Ask for a written breakdown before accepting an assignment. It should show the assignment rate, the umbrella’s margin, employment costs, expected gross pay and an illustration of your take-home pay. Also check how holiday pay will be handled: depending on the arrangement, it may be paid alongside regular wages where permitted or paid when you take leave.

An umbrella can reduce the administration involved in running your own business, but its margin is a cost. Compare the amount you expect to receive with the PAYE option, and ask for an explanation if a take-home pay illustration is unclear.

Which arrangement is right for you?

Start by finding out which arrangements the practice accepts. PAYE and umbrella are available across the practices we work with. Sole trader and limited company arrangements depend on the individual practice, and sole trader bookings also require particular care over who engages and pays you.

Once you know the available options, compare more than the headline hourly or daily rate. Before accepting, ask:

  • Does the practice accept my preferred way of working?
  • Who will engage me, and who will pay me?
  • Is the quoted rate a PAYE wage, an umbrella assignment rate or a business invoice rate?
  • What deductions, fees and business costs will affect what I receive?
  • How will holiday pay work, and what income will I have when I take time off?
  • Will I need to invoice the practice and manage my own tax records?
  • Who provides the professional indemnity cover required for the work?
  • What are the agreed hours, payment terms and cancellation arrangements?

Tell your Recruit4vets consultant how you would prefer to work before agreeing to a booking. We can confirm what the practice accepts and explain how that assignment can be arranged. For advice on your wider tax position, speak to a qualified accountant.