Locum vs Salaried vs Practice Owner
The four GP income models compared. Realistic earnings, tax, super, flexibility, risk, and what nobody tells you about each path.
📈 The Four Models at a Glance
🏙️ Locum
You fill temporary shifts at different practices or hospitals. Paid per day/hour or percentage of billings. You choose when and where.
💼 Salaried
Fixed annual salary regardless of patient volume. Common in Aboriginal health, government clinics, hospital GP units, and some rural practices.
📊 Percentage of Billings
You earn a share of what you bill Medicare and patients. The practice keeps the rest for overheads. This is how most GPs work in private practice.
🏢 Practice Owner
You own (or co-own) the practice. You keep net billings after all overheads: rent, staff, consumables, insurance, compliance.
🧮 Estimate Your Take-Home
Plug your own numbers into the rates and splits already explained on this page to see a rough annual figure. Not tax or financial advice — see the disclaimer at the bottom.
⚖️ Detailed Comparison
| Locum | Salaried | % of Billings | Owner | |
|---|---|---|---|---|
| How you get paid | Day rate or hourly guarantee | Fixed annual salary | % of gross billings (60–70%) | Net revenue after overheads |
| Typical guarantee period | Per-shift | Ongoing | First 3–6 months (then billings only) | N/A — you are the business |
| Superannuation | Self-managed (contractor) | Employer-paid (12%) | Usually self (contractor) | Self-managed |
| Annual leave | Unpaid — you choose when | 4–6 weeks paid | Unpaid — negotiate with practice | Self-funded — practice keeps running |
| Sick leave | None — no work, no pay | 10 days paid (NES) | None (contractor) | None — need locum cover |
| Professional indemnity | Your responsibility | Usually employer-covered | Your responsibility | Your responsibility + practice insurance |
| Patient continuity | Low — rotating practices | High — your patient base | High — your patient base | Highest — you own the relationship |
| Admin burden | Minimal — show up, work, leave | Minimal | Low — some recall/follow-up | High — HR, compliance, finances |
| Income ceiling | High (more shifts = more pay) | Fixed (capped) | Uncapped (more patients = more income) | Uncapped (business growth) |
| Financial risk | Low (no overheads) | None | Low | High (lease, staff, equipment) |
| Best for | New fellows exploring, flexibility seekers, semi-retirees | Work-life balance, early career stability, clinical interest over business | Most GPs — balance of income and autonomy | Entrepreneurial GPs with capital and business interest |
📊 How Percentage of Billings Works
This is how most GPs in private practice are paid, so it deserves a deeper explanation.
You see patients, bill Medicare (and the patient if privately billing), and receive a percentage of the total. The practice keeps the rest to cover rent, reception staff, nurses, consumables, software, insurance, and compliance.
Typical splits:
• During training (registrar): Minimum 44.79% + super (NTCER)
• Newly fellowed (first 1–2 years): 60–65% of billings
• Experienced (>3 years): 65–70% of billings
• High-demand/rural/procedural: 70–75% or higher
• After-hours/on-call: Usually 10–15 percentage points more than your standard rate
What affects your percentage: Your experience, the practice's overheads, location (metro vs rural), patient volume, whether you do procedures, and your negotiating leverage. A busy bulk-billing clinic at 60% may net you more than a quiet private-billing clinic at 70%.
Initial guarantee: Most practices offer a guaranteed hourly rate ($130–$150/hr) for your first 3–6 months while you build a patient base. After that, you switch to percentage only. If your billings exceed the guarantee before then, you move to percentage immediately.
💡 What Nobody Tells You
Locum looks great on paper but...
You have no patient continuity, no team, no recall system, and no long-term relationships. Clinically, you miss the satisfaction of following a patient through their care plan. Financially, you pay for your own super (12% of gross), professional indemnity insurance, and you get zero paid leave. A "$2,000 day" becomes roughly $1,400 after you account for these hidden costs. Also, locum work can dry up — it is not guaranteed income.
Salaried is great until it is not
Stability is real and valuable, especially with a young family. But salaried GPs often feel undervalued over time — you see 30 patients a day generating $300K+ in billings for the practice, and you take home $200K. The gap between your production and your pay becomes hard to ignore. Salaried roles also tend to have less clinical autonomy and more KPI pressure.
Percentage of billings rewards volume, not quality
The financial incentive is to see more patients in less time. This can conflict with the kind of medicine you want to practise. Longer consults (items 36, 44) pay more per consult but reduce hourly throughput. Shorter consults (item 23) pay less per consult but allow higher volume. Finding the right balance is a clinical and financial judgment that takes time.
Practice ownership is a business, not a job
You are now an employer, a landlord (or tenant), an HR manager, a compliance officer, and a clinician. If a staff member calls in sick, it is your problem. If accreditation is due, it is your paperwork. If a GP leaves, you need to find a replacement or cover their patients yourself. The income ceiling is highest here, but so is the stress and time commitment. Many GPs try ownership and go back to contractor work.
🧭 Which Model Fits You?
🏙️ Choose locum if...
You have just finished fellowship and want to explore different practices and locations. You value flexibility over stability. You are comfortable managing your own tax, super, and insurance. You want to maximise short-term income (e.g. saving for a house deposit, paying off HECS). Or you are approaching retirement and want to wind down on your own terms.
💼 Choose salaried if...
You want predictable income and paid leave. You are interested in a specific clinical area (Aboriginal health, aged care, mental health, public health) where salaried roles are common. You have a young family and need certainty. You prefer clinical work without financial pressure to bill more. Or you are an IMG building experience before transitioning to private practice.
📊 Choose percentage of billings if...
You want to build a patient base and long-term clinical relationships. You are comfortable with income that fluctuates with patient volume. You want higher earning potential than salaried work without the risk of ownership. This is the default model for most Australian GPs in private practice, and it is where most GPs end up long-term.
🏢 Choose ownership if...
You have been in practice for several years and understand the business side. You have capital (or access to financing). You want to build equity in a business, not just earn income. You are comfortable with management responsibilities. You want full autonomy over how your practice operates. And you are prepared for the reality that your income will fluctuate with the business.
💳 Tax & Super Implications
This is a general overview, not tax advice. Always consult an accountant who specialises in medical professionals.
Contractor (locum + most percentage GPs): You invoice the practice and receive gross income. You are responsible for quarterly BAS/GST (if registered), your own super contributions, professional indemnity insurance, and setting aside money for your tax bill. Many GPs operate through a company or trust structure on the advice of their accountant.
Employee (salaried + some percentage GPs): The practice withholds PAYG tax and pays employer super (12%). You receive a payslip and payment summary. Simpler, but less tax flexibility.
Practice owner: Business structure varies (sole trader, partnership, company, trust). You can claim business deductions (rent, equipment, staff wages, consumables) against revenue. More tax planning opportunities but significantly more complexity. A good medical accountant is essential.
Super at 12%: From 1 July 2025, the superannuation guarantee rate is 12%. If you are a contractor, nobody pays this for you — you need to contribute it yourself to avoid a retirement shortfall.