They say two things are certain: death (yuck) and taxes (even more yuck). For healthcare travelers, though, the complexities of the job (and the pay) make for a more interesting tax situation.
Especially if this is your first year as a traveler, we want to make sure Tax Day is as painless as possible. In doing so, it will benefit you to have a clear understanding of how medical travelers get paid.
Breaking Down a Travel Nurses’ Income
The foremost thing to keep in mind is that travel nurses don’t normally earn a straight paycheck like most registered nurses. This is important, because a straight paycheck would be completely taxable. Instead, portions of a traveler’s income are tax free. We’ll dive into an example of how a medical traveler might be compensated to illustrate the point.
Travel Nurse Base Pay
Travel nurses do earn an hourly wage. This can vary based on location, and might also be affected by what stipends and non-taxable compensation you receive.
Non-Taxable Compensation
For example, let’s say you earn a base pay of $30/hour. This isn’t the only financial compensation you’ll receive as a healthcare traveler. There are various per diem allowances and reimbursements that will apply to additional expenses, like, weekly meals, monthly lodging expenses, and a one-time travel reimbursement.
These extras aren’t usually taxable, but they’ll factor into what is known as a healthcare traveler’s “blended pay,” which is their rate per hour once all those forms of compensation are taken into account.
Calculating Blended Pay
Let’s take that example base pay rate of $30/hr and see how it would be affected by bringing non-taxable reimbursements into the picture over the course of a 13-week assignment:
- Base Pay = $30/hour
- Per Diem = $200/week for 13 weeks ($2,600)
- Lodging = $500/week for 13 weeks ($6,500)
- Travel Reimbursement = $500
Altogether, those non-taxable factors total $9,600. Over the course of that 13-week assignment, let’s say you work an average of 40 hours a week. You’d be earning an additional $18.46/hour. When combined with that base pay, the blended rate for your assignment would be $48.46.
Additional Considerations
What we just covered was one theoretical example of how the numbers might break down. It’s important for you to note that healthcare travel agencies differ in terms of how they’ll pay their employees.
- You’ll need to gain a clear understanding of how much their reimbursements are structured, and how they factor into your blended pay.
- Remember that the blended pay rate is often what you’ll see advertised by healthcare travel agencies.
- You should also consider that some agencies offer flexible pay packages, which means you can select particular benefits that factor into your total compensation.
Though it may seem like there are grey areas, there are actually clear-cut rules in qualifying for tax-free deductions and stipends, such as maintaining a “regular abode,” (your permanent residence) vs. your short-term housing. You can learn more about the specifics by reading BluePipes.
The many variables that factor into how you’re compensated as a healthcare traveler might seem confusing at first. The amazing guidance you’ll receive at Triage, is part of the reason so many choose us. Be sure to check out our job search page to see what’s available and consider joining our team.