Questions about travel nurse salaries
Money and Taxes

Dollars and Sense: Travel Nurse Salaries Explained

Travel nurse salaries are typically higher than average staff salaries, but many factors are involved in getting the most compensation. The different components of pay packages can be very confusing, especially for new travelers, but even veteran travel nurses sometimes have difficulty understanding it all. Companies also tend to structure their pay packages slightly differently, compounding the confusion.

Hourly wages, tax-free stipends, housing and permanent tax homes, per diem reimbursements, overtime, extra hours, and blended rates are just some of the many terms you’ll hear and need to comprehend when negotiating your travel nursing pay. The following explanations may help you understand travel nursing salaries better.

Understanding Bill Rates

Bill rates are the most valuable variable to understand about travel nurse salaries. Essentially, the bill rate is the hourly rate a travel nurse agency charges the hospital for the travel nurse’s time. It’s not the hourly rate the nurse receives but the total hourly rate the agency gets. Nurses privy to bill rates might become upset that it’s much higher than what they receive hourly.

However, you must remember that the agency not only pays your salary and all your stipends and other reimbursements from this rate but also pays for liability insurance and all the overhead costs associated with operating their business. Some recruiters share bill rates, but some aren’t allowed to divulge this information due to confidentiality agreements. If your recruiter gives you bill rate details, you’ll notice there isn’t one set number. There are several different categories of bill rates, including rates for overtime hours and extra hours.

Many Nurses Get Blended Rates

Travel nurses who can’t claim a permanent tax home receive straight, fully taxed hourly rates. However, this rate is usually still higher than average staff nursing rates. Many travel nurses do claim permanent tax homes and receive blended rates. These rates are a blend of taxed and untaxed compensation combined to create your hourly pay rate. Wages and bonuses are taxed while reimbursements called stipends aren’t. It’s an important distinction.

Blended rates are why some travel nurses earn more than others. These nurses often have an incredibly low hourly rate on their pay stubs. The first time new travel nurses see this, they tend to panic. However, the bulk of their money comes from tax-free stipends, so it’s normal to have a meager hourly rate. Only the hourly wages appear on your W-2 and are subject to income taxes. You won’t owe additional taxes on any stipends received, but you must break down the weekly or monthly amount to calculate your actual hourly rate.

What Are Stipends?

Stipends are reimbursements, sometimes referred to as per diem reimbursements, which cover housing, meals, and various incidentals. Per diem reimbursements are tax-free, so it’s in travel nurses’ best interests to try to take as much of their travel nurse salary as untaxed stipends as possible. Agencies may choose to reimburse you for any cost directly associated with your new assignment, but that doesn’t mean they cover everything. Make sure you know what is and isn’t reimbursable.

Travel nurses must make their own housing arrangements to receive the housing stipend. Some travelers, especially new ones, aren’t comfortable securing housing and opt to take agency-provided housing. Keep in mind that if you do this, you won’t receive a travel nurse housing stipend and still receive the lower hourly wage. It’s much more beneficial financially to find your own housing. However, if you choose not to, you still get tax-free stipends for meals and any other incidentals your agency covers.

Permanent Tax Home Requirements

If you don’t have a permanent tax home, you don’t qualify for tax-free stipends and receive a flat hourly rate that’s fully taxed. People often use the terms permanent residences and tax residences interchangeably, but they’re technically not the same. Your permanent residence is your legal home where you live, while your tax residence is your economic home where you earn the majority of your income. Under normal circumstances, a person’s permanent residence is also their tax residence.

The constantly mobile nature of travel nursing means they generally don’t have a true tax home but may have a permanent residence. Therefore, the IRS makes an exception. Travel nurses can count their permanent residence as their tax home if they have duplicate expenses for their permanent home and the places they stay while they’re on travel assignments.

However, they must be contributing fair market value towards their cost of living wherever they permanently reside. Nurses who rent out their homes or live with friends or relatives when they’re “home” may not qualify for tax-free housing stipends. Since housing can be a significant portion of your pay package, it’s vital that you learn whether you qualify before accepting travel assignments.

Overtime Hours & Travel Nurse Salaries

Overtime hours are often the most complicated types of bill rates because there are several ways an agency might arrive at an OT rate. Different agencies and hospitals also may have different rules regarding when OT rates kick in. These rules may not align with state laws regarding overtime pay for regular employees. Although overtime isn’t always common among travel nurses, ensure your contract lists an OT rate. If the contract has a low OT rate and you can’t negotiate for a higher one, make sure OT isn’t mandatory.

If your contract uses a blended bill rate that combines your regular hourly rate and OT rate into one flat rate, you won’t find a separate OT rate because it’s the same as your standard hourly rate. However, your contract should still note that the two hourly rates are the same. If you’re not required to work OT and don’t expect to work much OT, this route might work to your advantage.

If you receive tax-free allowances, your OT rate may only be 1.5 times your hourly taxable rate. Since your hourly taxable rate is generally quite small when you earn a large chunk of your pay through tax-free stipends, your OT rate might also be relatively minuscule. If you have the option to work OT and plan on doing so frequently, consider negotiating for a higher OT rate with your recruiter. In some cases, your OT rate won’t even be 1.5 times your regular rate, so get everything in writing.

The second part of this equation is when OT kicks in. Some contracts stipulate that the agency may only charge OT rates on hours over 48 per week, even if the state requires OT for any hours above 40 for regular employees. Instead of weekly hours, some states require OT pay for any hours over 8 worked in the same day. Since nurses often work 12-hour shifts, your contract may stipulate that OT only counts for daily work hours over 12. Get these details in writing, too.

Extra Hours Are Unique

Extra hours are any hours worked over the number of hours mandated in your travel contract and are one of the most overlooked aspects of travel nursing pay packages. Sometimes travelers don’t realize they may end up working more hours than what’s in their contract, or they may think of extra hours as OT hours when they’re not the same.

For example, if your contract requires you to work three 12-hour shifts a week, but you work four 12-hour shifts, the additional 12 hours are considered extra hours, not OT. However, to confuse you even more, some extra hours may also be classified as OT hours. Extra hours may pay at the same or higher rate as OT hours. It’s essential that your contract treats these hours as unique and clearly defines the payout.

Agencies cover their fixed costs with your regular hours and don’t pay reimbursements after you’ve worked the hours mandated in your contract. Therefore, they have unappropriated funds left when you work extra hours. Some agencies might keep this money for themselves and just pay you the taxable hourly rate or the blended hourly rate for your extra hours. Alternately, an agency may pay a higher set rate through an “extra hours bill rate” stipulated in your contract or simply pay you a bonus to ensure you receive your share. You must have something in your pay package detailing your compensation for extra hours worked, or you could miss out on a nice chunk of change.

Recruiters Can Explain Salaries

To get the best jobs and pay packages at your desired locations, it’s crucial to compare agencies and recruiters and find a company that works hard to get you everything you want. Agencies train their recruiters to explain pay structures and break down pay packages so you understand them and can make precise comparisons. However, beware of companies that increase their recruiter’s commission if they can “sell” a travel assignment to a nurse at a lower pay rate. You must build a trusted relationship with a recruiter you know has your best interests at heart to ensure you get the best deal for you.

Earn More with Vivian

The best way to know whether you’re getting a good pay package is to compare offers from several agencies. The quickest and easiest way to compare offers from multiple agencies is through a universal profile with Vivian Health. We’re unbiased towards any agency or hospital and promote pay transparency through detailed job postings and solid salary ranges.

Because we work with multiple agencies, we have a large selection of jobs and give you all the information you need to make informed decisions. Join Vivian’s growing community to research travel nurse salaries in your cities of interest to ensure you have accurate and realistic facts before comparing pay packages with your recruiter.

Moira K. McGhee

Moira K. McGhee is Vivian’s Senior Editor & All-Around Wordsmith. As part of the Vivian Health team, she strives to help support the empowerment of nurses and other healthcare professionals in their pursuits to find top-notch travel, staff, local contract and per diem positions faster and easier than ever.

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