Guide | Locum nurses
Agency, bank or direct: how locum nurse pay really compares in 2026
Agency nursing usually shows the highest hourly rate, bank work is paid through the trust's own payroll, and direct self-employed work pays you the whole fee but nothing when you are off. The real comparison is take-home pay after tax, holiday, pension and sick pay, and in 2026 it also depends on NHS limits that cut agency spending towards zero by 2029/30 and cap bank budgets.
This guide sets out how each route pays and what protections come with it, so you can compare offers on the same footing.
Checked on against the primary sources listed at the end of this page.
What is the difference between agency, bank and direct nursing work?
- Bank. You hold a bank contract with an NHS trust (or its bank provider) and pick up shifts. The trust pays you through its payroll, with tax and National Insurance taken before you are paid.
- Agency. An agency places you with the trust or provider. You are paid by the agency or, very often, by an umbrella company that employs you and runs PAYE. GOV.UK is clear that the umbrella is your employer and does not find you work; the agency does.
- Direct. You contract straight with a GP surgery, clinic or provider and, if you are genuinely self-employed, invoice them and pay your own tax through self assessment.
How do agency, bank and direct work compare on pay and protections?
| What you get | Bank | Agency (umbrella) | Direct, self-employed |
|---|---|---|---|
| Who pays you | The trust, through payroll | The umbrella company, through PAYE | The client, against your invoice |
| Holiday pay | 5.6 weeks for workers; often in the rate or accrued (RCN) | 5.6 weeks for workers; after 12 weeks, leave on equal terms | None; build it into your fee |
| NHS pension | Depends on the bank contract (RCN) | Not NHS employment; auto-enrolment after 12 weeks per GOV.UK | No |
| Sick pay | Generally Statutory Sick Pay (RCN) | Check the umbrella contract | None |
| Tax | PAYE at source | PAYE at source | Self assessment on profit |
For worked take-home figures on the same hours through each route, see our locum nurse pay worked example across agency, umbrella and direct. HMRC's own umbrella pay tool works out what an assignment rate should leave you with.
Why does an agency hourly rate look higher than a bank rate?
Because it pays for more than your hours. NHS England's agency rules cap what a trust can pay per hour at 55% above 2016 substantive pay, and that cap includes holiday pay, employer National Insurance at 13.8%, employer pension of up to 3%, the agency's fee and expenses such as travel. The caps have not risen with later pay awards.
If an umbrella company pays you, HMRC's umbrella pay tool starts from the assignment rate and shows the deductions between it and your take-home pay. Unpick a quoted rate into what reaches your account before comparing it with a bank rate.
What rights do agency nurses get after 12 weeks?
From the first day you have a worker's rights and access to shared facilities such as the canteen and car parking. After 12 weeks in the same job you qualify for equal treatment with directly employed staff: equal pay for the same job, automatic pension enrolment and paid annual leave.
The count pauses for breaks of six weeks or less, annual leave and sickness of up to 28 weeks, and continues through pregnancy-related leave. It starts again at zero for a new job at a different workplace or after a break of more than six weeks. Nobody else counts this for you, so keep dated records of each hirer and role.
What are the NHS limits on agency and bank spending in 2026?
NHS England's medium-term planning framework expects every trust to cut agency spending by 30% in 2026/27, 25% in 2027/28 and 25% in 2028/29, with "no agency spending in 2029/30". For the first time bank has limits too: each trust's bank spending falls by between 7.5% and 15% a year over the same three years, more for trusts that rely on bank most.
Agency use for band 2 and 3 roles was to be removed entirely by the end of January 2026, except under the "break glass" route for exceptional patient-safety risks. Trusts must use approved frameworks for any agency staff. Our post on the NHS agency spend wind-down and bank caps covers what that means for the shifts on offer.
Do unsocial-hours enhancements apply to bank and agency shifts?
Agenda for Change sets national uplifts for nights, Saturdays, Sundays and bank holidays for staff on those terms. Whether and how your bank applies them is set in your bank contract, and agency rates sit under the capped figure above. Check the offer against the national floor with the NHS unsocial-hours calculator, and compare with current locum nurse rates.
How do I keep track of pay across several agencies and a bank?
With three payrolls and an invoice book in one month, errors hide. In Sessional every shift carries a billing mode: PAYE at source for bank and umbrella work, agency-managed where an agency pays you, self-invoiced for direct work, so your tax reserve counts only the income that has not already been taxed (see agency and PAYE shift tracking). When a payslip lands, mark the shift paid correctly, paid short with the amount you received, or not paid yet, and the flagged shifts rise to the top (see pay-flagging for bank and agency shifts).
Reference notes | Questions
Frequently asked questions
Is agency or bank nursing better paid?
An agency hourly rate often looks higher, but it is not like for like. NHS England's agency price caps include the worker's pay, holiday pay, employer National Insurance, up to 3% pension and the agency's fee, and an umbrella company pays you from an assignment rate after deductions. Compare take-home pay after deductions, holiday and pension, not the headline hourly figure.
Do bank nurses get holiday pay and NHS pension?
Holiday pay, yes: almost all workers are entitled to 5.6 weeks a year, and the RCN notes bank holiday pay is often built into the hourly rate or accrued separately. NHS pension access depends on the bank contract, according to the RCN; NHSBSA lists direct NHS employment as the main route into the scheme.
What is the 12-week rule for agency nurses?
After 12 weeks in the same role with the same hirer, an agency worker qualifies for equal treatment with directly employed staff, including equal pay, automatic pension enrolment and paid annual leave. Breaks of six weeks or less pause the count; a new role or a break of more than six weeks starts it again.
Are NHS agency shifts going to disappear?
NHS England's planning guidance expects trusts to cut agency spending by 30% in 2026/27, then 25% in each of the next two years, with no agency spending in 2029/30. Bank budgets are capped too, falling 7.5% to 15% a year. The limits apply to NHS trusts' own spending; work for other employers is not counted in them.
Should I work through an umbrella company or as self-employed?
That depends on your employment status for each engagement, which is a question of fact, not choice, and this page does not give tax advice. An umbrella company employs you and runs PAYE; from 6 April 2026 the agency or end client is responsible for making sure it is done correctly. Speak to an accountant if you are unsure.
One record for every bank, agency and direct shift
Log each shift once, however it is paid, and see what you have earned, what is outstanding and which payslips were short. Basic is free with no card.
Sources
Each source below was read on unless it says otherwise. Rules and rates change: check the source before you rely on a figure, and tell us if something here is out of date.
- NHS England, agency rules (published 5 April 2023, updated 19 November 2025): price caps at 55% above 2016 substantive pay, inclusive of holiday pay, employer NI at 13.8%, pension of up to 3% and agency fees; approved frameworks only; the break glass exception; removal of band 2 and 3 agency use by the end of January 2026
- NHS England, medium-term planning framework: revenue, finance and contracting guidance (updated 27 November 2025): agency cuts of 30%, 25% and 25% from 2026/27, no agency spending in 2029/30, and bank limits of 7.5% to 15% a year
- GOV.UK, agency workers: your rights: worker rights from day one, equal treatment after 12 weeks including pay, automatic pension enrolment and paid annual leave, and how the 12 weeks are counted
- GOV.UK, holiday entitlement: 5.6 weeks of paid holiday for almost all workers, including agency workers and those on irregular hours
- GOV.UK, PAYE rules for labour supply chains that include umbrella companies from 6 April 2026 (updated 19 June 2026): that the umbrella company is the employer, and that from 6 April 2026 the agency or end client is responsible for PAYE being operated correctly
- GOV.UK, work out pay from an umbrella company: HMRC's tool for estimating gross and take-home pay from an umbrella assignment rate
- NHSBSA, who can join the NHS Pension Scheme: that membership is open to people directly employed by the NHS, among other listed groups
- Royal College of Nursing, staff bank vs substantive: key differences explained (10 November 2025): that bank holiday pay is often in the hourly rate or accrued, that NHS pension access depends on the bank contract, and that bank staff generally get Statutory Sick Pay
Continue | Related pages
Related pages
Tool
NHS unsocial-hours calculator
What a night, weekend or bank holiday shift should pay at the AfC floor.
Rates
Locum nurse rates 2026
Benchmarks for bank, agency and direct work.
Help
Pay-flagging
Check every payslip against the shift you worked.
Product
Sessional for nurses
Bank, agency and direct shifts in one place.