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Published on October 15, 2023

Understanding the Basics: A Comprehensive Guide to Travel Nurse Pay

Travel nurses get paid differently than staff nurses. Travel nurse pay packages include a lower hourly taxable base rate, and most agencies add on tax-free stipends for housing, meals, and transportation costs.

Higher travel nurse salaries are often offered for high-demand specialties, such as cardio catheterization or oncology. Added certifications can also boost pay rates.

Expenses

As a travel nurse, you’ll often be paid differently than traditional staff nurses. Thus, it’s essential to understand how travel nurse pay works. Generally, agencies offer a “total pay package.” The package consists of a taxable hourly rate and non-taxable reimbursements. Those non-taxable reimbursements, or per diems, include housing, meals and mileage. These are usually not subject to taxes and can increase your take-home pay.

However, it’s important to remember that you should keep receipts and records of all travel expenses in case they’re ever audited. Most travel nurse agencies will also offer a housing stipend by paying rent directly or providing complimentary housing within dorms or off-campus apartments. Some travelers, especially those uncomfortable securing their housing, choose agency-provided housing. This allows them to get the maximum housing stipend and reduces their tax liability. However, many money-savvy travel nurses choose to find their accommodation and save the compensation for other travel expenses. That’s why it’s important to understand the options and make the best choice.

Taxes

Travel nurses have unique income structures that make tax season a nightmare. Fortunately, there are ways to navigate these challenges and still come away with a rewarding experience. A good travel nurse agency will be transparent and explain their hourly bill rate breakdown. This will show you how much goes towards payroll taxes and benefits, liability insurance, and company overhead. This will help you evaluate the integrity of an agency and negotiate a better pay package if necessary.

Additionally, a good travel nurse agency will be clear about the rules around tax-free housing stipends. These stipends are important because they can often comprise most of a travel nurse’s weekly salary. The IRS requires that stipends not duplicate housing expenses between a travel nurse’s permanent tax home and their assignment location. A travel nurse’s tax home definition can be complex and should always be discussed with a qualified professional. Lastly, a good travel nurse agency will provide the necessary documentation for tax filing.

Overtime

The number of hours a travel nurse works during an assignment can significantly impact the total paycheck. Nurses working overtime are typically paid time and a half of their taxable rate, which means that additional shifts will make them earn more than they would with standard contracts in the same location.  Finally, some travel nurses can receive a signing or completion bonus for their assignments.

These additional monetary incentives are only sometimes a component of every contract, but when they are, travel nurses should take advantage of them to increase their potential earnings. As a travel nurse, it’s important to consider the entire breakdown of a compensation package before accepting an offer. Look carefully at the hourly taxable rate, stipend pay and travel expenses to determine if it’s competitive with other contracts in your specialty and region. Also, review any additional perks like 401(k) contributions, as these can greatly impact your overall taxable income and ability to qualify for certain home loans or other financial products.

Reimbursements

Most travel nursing agencies pay for housing, but some also reimburse for licensure costs, medical malpractice insurance and annual physicals. However, only some agencies offer these reimbursements; you must negotiate if you want them. Travel nurses have four major components to their pay packages: hourly wages, a housing stipend, a per diem and travel expenses. Each piece can vary by state, and it’s crucial to understand what you’re getting into before accepting a contract. Tax experts say that most travel nurse assignments require you to have a “tax home.”

This means you must maintain a primary residence in your current city and visit it frequently enough to prove it’s your main home. This requirement prevents you from being considered an itinerant worker and avoiding paying taxes. If you have a tax home, you’ll be eligible to receive the non-taxable housing stipend and other tax-free reimbursements that make traveling nurse jobs appealing.

Benefits

In addition to higher hourly wages, travel nurses typically earn additional non-taxable stipends or reimbursements. These are often for temporary accommodations and other expenses. These gold mines make travel nursing viable for many professionals who would otherwise forfeit long-term retirement and health insurance benefits to take temporary assignments. If you do the math and work multiple short-term contracts a year, you may make more money than a staff nurse, depending on location costs and contract lengths. And that doesn’t even include the potential bonuses.

For example, many agencies offer bonuses for signing on, completing an assignment or agreeing to an extension. These can range from sign-on, completion and retention bonuses to free housing stipends or heavily discounted healthcare and life insurance. You can learn more about travel nursing companies’ benefits on their websites. However, consult a certified financial planner before deciding on the right compensation package. The more you understand the ins and outs of travel nurse pay packages, the better able you will be to negotiate.


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