How Do Travel Nurses Get Paid?

February 12th, 2018 | Posted by bbarr in Travel Nursing

Pay packages for travel nurses can be complicated. Even when you understand all the moving parts, calculating the actual offer can be difficult. Travel nurses are paid by the travel nursing agency, not the hospital. And for many reasons, they pay nurses differently than employees working in permanent positions would be used to. The many variables and how they’re presented can add to the confusion. Here we’ll breakdown how it works using a simple analogy.

The pie. The video below explains the process of using a pie chart to clearly understand how travel nurses get paid.

Typical permanent placement jobs will pay you an hourly rate. For this example, let’s say that rate is $50/hr. Although there are most likely other benefits included in this example of permanent employment, in terms of pay that’s it. 100% of the $50/hr pie is taken up by the hourly rate. However when we look at pay packages for travel nursing there are several factors such as per diem pay, housing stipends, licensure & certification reimbursement, insurance, and travel reimbursements. A $50/hr travel position will breakdown differently than a permanent position. Using the example from the video housing allowances make up about 26% of the pie (or $13/hr). Per diem pay comes out to about 16% of the pie ($8/hr). Add up travel reimbursement, insurance, and licensure & certification reimbursements for another 20% ($10/hr) and the only thing left is the taxable hourly base rate of about $18/hr (36% of the pie).

You’re still getting paid $50/hr but only the $18/hr base rate is taxed like income. The rest is untaxed! Reimbursements and stipends for travel expenses, licensure & certifications, meals and incidentals, medical benefits, lodging/housing are all untaxed. That potentially makes roughly about 76% of your income as a travel nurse untaxed.

Calculating exact amounts is further made difficult by using different time variables for each aspect of the pay package. This is common in the travel nursing industry and can make figuring out how much you’ll be paid confusing. Contracts are most often listed 13 weeks long and 36 hours per week. Things like reimbursements are often listed as weekly items. Meanwhile, base pay is listed at hourly rates. Finding your true earning potential can be difficult. The best method is to break everything down into an hourly rate and bake your pie from there. In the comparison below we’ve simplified all the math used in this example to showcase the financial benefit of travel nursing.

Permanent Position
Pay rate: $50/hr
Length: 13 weeks
Hours per week: 36
Total hours: 468
Taxable income: $23,400

Travel Position
Pay rate: $18/hr
Untaxed reimbursements: $32/hr
Length: 13 weeks
Hours per week: 36
Total hours: 468
Taxable income: $8,424
Tax free income: $14,976

We hope you now have a better understanding of how travel nurses get paid. If you have any questions give us a shout. We’re always here for you and would love to hear from you.

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