You’ve probably heard it time and time again: you can make serious money from travel nursing. You’ve also probably gotten a headache trying to make sense of your travel nursing compensation package. But that good salary makes it worth your while to figure out the ins and outs of your compensation package.
A compensation package includes:
- Pay rate
- Housing stipend or agency-provided lodging
- Travel stipend
- Meals and incidentals stipend
- Medical insurance stipend or agency-provided coverage
Ready? Here’s everything you need to know about travel nursing compensation.
First, before you pull out your calculators and dig into the numbers, take a moment to reframe the way you look at compensation.
Your values determine your value
There’s no one-size-fits all travel nursing salary package. What you want in a compensation package depends on what you want for your life.
- If you are traveling to a city where your great aunt has a summer home you can live in, you’ll go for the housing stipend instead of free housing.
- If you are on your spouse’s health insurance, you’ll pick higher pay over medical benefits.
- If you want to work hard to earn as much money as quickly as possible, you’ll prioritize generous overtime pay.
Think deeply about what you need and what you don’t before signing on the dotted line.
Stick to big picture accounting
Throughout all industries, when new employees are offered pay packages, they get stuck on a single number — that annual salary figure. Those five or six digits can represent so much: what your work is worth, the kind of life you can lead, and the possibility of attaining your future goals.
But, that number alone can be tricky.
A high salary figure is so attractive that you may overlook a poor benefits package, no overtime pay, or no vacation days.
And a low salary figure is so deflating that you may miss the true monetary and lifestyle advantages of bonuses, tax-free money, and generous overtime.
In short, a salary figure is never the complete story. When evaluating your travel nursing pay rate, you want to focus on big picture accounting:
|How much will I earn for my work, from all sources?|
|What job-related expenditures will I incur?|
|Given all earning and expenditures, what is my total weekly take home?|
Think of the big picture as a puzzle, made up of a lot of little pieces. Let’s take a close look at each of those little puzzle pieces to figure out how they fit into the whole.
The pay rate (also called base rate) is the piece of the puzzle people talk about the most. You see pay rates posted in job ads, in emails from your staffing agency, and in articles about travel nursing salaries.
Simply put, the pay rate is the hourly rate that a staffing agency charges for a travel nurse’s time. These rates may vary widely from hospital to hospital. A single agency may even have different pay rates within the same hospital.
Some folks may even try to convince you that the pay rate is the entire picture — but you know better.
Think of pay rates much in the same way that you think of the price of an airline ticket. Many factors influence fluctuation in price of a seat, from environmental influences to the natural ebb and flow in demand. Airline prices are notoriously difficult to predict with any degree of specificity. And two nearly identical seats may come with very different price tags.
The same is true of travel nursing pay rates. Everything from patient demand to a single staff member’s extended maternity leave can influence a given unit’s pay rate for travel nurses. It’s hard to generalize pay rates by location — one hospital may have a pay rate of $44/hour, while a different hospital in the same city may pay only $37/hour. Even for nearly identical positions, you may be offered very different pay rates.
And, in the same way there are a lot of different kinds of airline rates — from first class to business class to coach plus to basic coach, from bereavement fares to military rates to package deals that include airfare — there are many different kinds of pay rates. Here are a few.
- Standard rates are the most common type of pay rate. A hospital and an agency will determine a set rate for each specialty that the agency staffs.
- Specialized rates are generally set alongside standard rates and run about $2-$8/hour higher than standard rates. They reward specialties that a hospital considers highly advanced.
- Negotiated rates are less common than the above types of pay rates. When a hospital is interested in a nurse with a particularly necessary set of skills or a high level of experience, they may negotiate higher rates to gain the nurse’s services.
- Overtime rates are the hourly rates hospitals pay their agency nurses for hours worked over the contract hours.
Bonuses can sweeten your travel nursing salary package. These can come from the hospital, the agency, or both. Here are the primary types of bonuses that you may receive:
- Sign-on bonuses are typically offered by the hospital. Since these are the highest-risk bonus given by the hospital (since there’s no guarantee of contract completion), big sign-on bonuses may be offered when hospitals are having a particularly difficult time filling positions.
- Completion bonuses are hospital-provided bonuses that you receive once you’ve completed all the contract hours. These may be used to give you extra incentive to finish out a contract. Both sign-on and completion bonuses are generally paid first to your agency and then to you, so keep this in mind when evaluating your cash flow.
- Referral bonuses are agency-provided bonuses that encourage you to bring your nurse friends along with you on the travel nursing ride.
- Contract extension bonuses are the prize you get for staying on at a certain hospital. Often provided by the agency, contract extension bonuses often make more economic sense for agencies than sourcing and hiring new nurses. It’s a win-win.
Things to keep in mind about bonuses:
- Don’t confuse bonuses and stipends. Bonuses are not tax-free money and are often taxed at a higher rate than your hourly wage.
- Find out when you’ll get your bonus. Bonuses may come at any point during your contract — don’t confused expectations impact your cash flow.
- Read the fine print. Bonuses may come with requirements and stipulations. For example, a hospital may require you to make up any missed hours before you can receive a completion bonus.
- Ask and you shall receive. Bonuses are an expected part of your package. Though they are called bonuses, they are not extra. You are counting on them as income. Ask your agency to clarify anything that confuses you so you understand everything about them.
The next piece of the puzzle is tax-free income. This is the treasure chest of additional income that can make travel nursing such a lucrative career. Temporary housing stipends and meals and incidental stipends are the primary forms this treasure takes. But, the treasure map to get you to these goodies is complex, requiring a little knowledge of the ways of tax codes and regulations.
Make sure you’re eligible for tax-free treasures
A little background: this tax-free income is offered to all workers who travel as part of their jobs. It’s why everyone, from office assistants to CEOs, are reimbursed for job-related travel expenses. These employees generally fall under the tax category of permanent employees who travel as part of their job.
Some nurses fall under this category, too. Say a nurse has a permanent position that regularly schedules her for 5 days on, 6 days off. If, during her days off, she works as a travel nurse to earn extra income, she will be eligible for the tax-free stipends and reimbursements that her agency offers.
The vast majority of travel nurses, though, do not have another permanent gig. If you travel for a living, you must meet two criteria with the IRS to receive tax-free money: you must be deemed a temporary worker, and you must have a permanent tax home.
Maintain temporary worker status
To be designated a temporary worker, you must not work in any one location for more than a year. This extends not just to an individual hospital, but also to a single metro area. If you work two different travel nursing contracts in the same city for more than 12 months within a 24-month period, you will likely be deemed a permanent employee of the area and will be taxed for any stipends or reimbursements that you received.
Maintain a tax home
No matter where you are in your travel nursing career, you’ve probably heard quite a bit about the importance of a tax home. The IRS uses the phrase tax home to define the primary place where a taxpayer does business. Rather than referring to a place of residence, it refers to the general urban or municipal area where you earn most of your money.
For example, if a traditional, non-traveling nurse works full-time at a hospital in Minneapolis, her tax home is not her ranch-style home at 123 Fablecrest Avenue. Her tax home is Minneapolis.
To have a permanent tax home, you must meet at least two of the following criteria:
- You earn significant income in the city, town, or metro area that is your tax home.
- Your expenses are duplicated due to traveling for work.
- You have not abandoned your tax home to travel for work.
Collect your tax-free funds and benefits
Now that you know you’re eligible, the different tax-free reimbursements are a big part of what makes a travel nurse pay package attractive. There are three primary areas in which tax-free stipends come into play: temporary housing stipends, travel stipends, and meals and incidentals stipends.
Temporary housing stipends
Of course, you’ll need an excellent place to live during your travel nursing gig. You can go with agency-provided housing or choose to receive a tax-free housing stipend to offset the cost of your housing.
What you choose will depend on your priorities and preferences. If you want to avoid the hassle of securing your own lease, paying a deposit, and dealing with a landlord, you’ll likely opt for agency-provided housing. You’ll get a fully furnished place to live for your gig, hassle-free.
If you want to choose the place you live and have more say over what neighborhood you spend your off-duty time in, you’ll likely go for the housing stipend.
In the same way that a hospital exec would never have to pay their own airfare to go to a medical conference, you should never pay for your job-related airfare, rental car, or other modes of transportation. Your agency will provide you with a tax-free travel stipend to offset any costs you incur traveling from gig to gig.
Meals and incidental expenses stipends
You know that traveling for pleasure is expensive. From baggage fees to overpriced airline lunches, airports and airlines will get you every time. Sometimes, it seems that every move you make during air travel costs you another $10 or $20.
Though there are ways to save money while traveling, you will inevitably rack up some incidentals. Fortunately, your agency will offer you reimbursement for your travel expenses. To avoid the time-consuming and laborious process of collecting logs of detailed travel costs (and to prevent you from having to keep track of each cent you spend while on the road), most agencies will provide you with a meals and incidental expenses stipend, tax-free.
Medical benefits make up another piece of the pay puzzle. Somewhat similar to temporary housing options, most travel nurses go one of two routes when it comes to medical insurance: agency-provided coverage or securing their own insurance with a reimbursement from the agency.
Once you have all of these pieces, you can take a good look at the big picture. Each assignment, you’ll be able to make the best decision for yourself and your career.
Looking for more info on pay rates? Check out our blog on the 8 different kinds of pay rates that may affect your travel nursing salary.