The pandemic launched travel nursing from a specialty to a major player in healthcare staffing. In 2020, travel nursing industry grew by 35% over 2019, driven by the growing nursing shortage, increased staffing needs as COVID surges cycled throughout the country, and skyrocketing pay rates.
Pre pandemic, pay for travel assignments was typically higher than for permanent staff. Now moving into year three of the pandemic, travel assignments boast wages over $100 an hour in some areas.
If you’re comfortable leaving your home for weeks at a time, travel nursing can be a very lucrative career. Exactly how lucrative depends on a number of factors.
Factors That Affect Pay Rate
If you’ve even casually looked for travel nursing assignments online, you’ve probably noticed some wildly different pay rates. Each assignment is unique and has multiple factors that determine the pay rate.
When you understand why pay rates differ, you can make more informed decisions about which assignments to take. Let’s take a look at some factors that affect those rates.
Pay rates depend on the cost of living in any given area. You’ll earn more in some areas simply because they have higher demand. Other areas may hire more at certain times of the year.
The top rates aren’t always where you expect them to be. According to Ziprecruiter, the ten highest paying cities in the US are San Jose, Oakland, Hayward, and Vallejo, California; Tanaina and Wasilla, Arkansas; Norwalk, Connecticut; Summersville, West Virginia; and Jackson, Wyoming.
Typically, lower-paying assignments tend to be in the south, where the cost of living is lower, and in popular destinations. You might daydream about working in a location like Hawaii, for example, but may find the weekly pay is lower than less dreamy locations.
Nurses in highly specialized fields or with specialized skills are harder to find, which can equal higher pay rates. Currently, ICU, Pediatric ICU, and Operating Room travel nurse positions pay 14-23% more than a typical travel nurse assignment. Other high-paying specialties include critical care, ER, labor and delivery, PACU, NICU, and orthopedics. Non-specialty assignments like Med/Surg will generally pay less.
Like full-time nursing jobs, travel assignments tend to pay higher rates for night shifts. If you’re a night owl, you can make some extra cash choosing night shift assignments.
Crisis or Rapid Response Assignments
Pay tends to be higher in hospitals or geographic locations in a time of crisis, like a natural disaster or unexpected surge in the patient census. COVID is currently the driving factor in crisis pay, and it’s possible to find assignments offering as much as $10,000 per week in high-demand areas. In 2020, when COVID was beginning to spread across the US, we saw busloads of nurses traveling to the critically affected states to support those communities.
Crisis or rapid response assignments typically need nurses to start quickly, within a week or two. Assignments are often shorter than the usual 13-weeks. Other reasons for rapid response assignments are unit openings, EMR upgrades, and staffing shortages, to name a few. If you’re flexible and your paperwork is ready to go, rapid response assignments can be lucrative.
There are several types of bonus pay you may earn taking travel assignments.
Hospital bonuses are usually paid at the completion of your assignment as a lump sum. They are separate from your base pay rate.
A referral bonus is a “finder’s fee” for referring other nurses to the agency. It should not affect your pay rate.
If a nursing union goes on strike, travel nurses are usually hired to cover the striking nurses temporarily. These assignments tend to pay more due to the urgent need to fill positions quickly.
Why Does Your Paycheck List a Different Hourly Rate Than Expected?
Those ads or texts you get offering $100 per hour sound like amazingly lucrative positions, and they are, but that hourly rate isn’t as simple as it looks. A pay package is a complex combination of several variables that affect your bottom line.
Looking at Your Pay Package
If you’re used to the standard full-time paycheck, your first travel nursing paycheck might look a little confusing. Instead of the simple salary or hourly rate of a full-time job, your travel nursing paycheck will have compensation listed for several variables.
You may also notice your pay rate is lower than those ads and job postings you may have seen online. There’s a very good reason for that. As a travel nurse, some of your pay is taxable, and some of it is non-taxable stipends and reimbursements. The rates you see advertised typically show you a rate based on all those added together, called your variable wage. Your hourly pay rate is only the taxable portion.
Some variables you might see on a travel nursing paycheck include:
- Taxable base pay (pay rate) – Your hourly wage. Different agencies calculate this differently. The same role may appear to have vastly different rates at competing agencies, but the rate is only part of the equation. A company offering a lower rate may also be offering incentives that other companies are not.
- Taxable overtime rate – Check into your state’s laws about what is considered overtime.
- Lodging stipend
- Meal stipend
- Mileage or Travel stipend
- License reimbursement
- Sign-on bonus (or others)
Think of your pay package as a pie chart. Each “slice” adds up to your complete pay package. If you only focus on the base rate, you may overlook the value of the incentives that go with it. For example, a large lodging stipend might more than make up for a slightly lower hourly rate compared to a job with a higher rate and a smaller lodging stipend.
Always look at the value of the whole pie.
How Do You Know if You Qualify for Tax-Free Stipends?
Travel nursing taxes can be confusing because of the multiple variables included with the pay package, especially stipends. In general, stipends are considered non-taxable reimbursements. However, that may depend on whether you have an eligible tax home.
What is a Tax Home?
To be eligible for tax-free stipends, you must claim a permanent tax home. Your tax home is the location of your regular place of business or the home where you regularly live while not traveling on assignment.
Someone who doesn’t meet the requirements for a tax home is considered an itinerant worker. Their tax home is wherever they’re working at the moment. That’s because stipends are considered reimbursements for expenses when traveling away from home for work. Because an itinerant worker doesn’t have a tax home, their stipends are not reimbursements. They are taxed as income.
It can be very confusing.
The IRS uses three factors to help decide if your declared tax home truly qualifies as a tax home:
- Whether you complete some of your business in the area of your tax home and live in your tax home at the same time.
- Whether your living expenses are duplicated when you travel for work.
- Whether you have not abandoned your tax home. This depends on how often you use your tax home for lodging and whether you have family members living there.
Tax home: You have a home you always return to when you’re not on assignment. You rent or own it.
Not a tax home: You have a room at your brother’s house between assignments. You don’t work in the area or pay your brother to live there. You are considered an itinerant worker.
Tax home: You work as a school nurse during the school year, then take travel assignments over the summer. You stay with your parents September through May but don’t pay rent. Your tax home is the location of your school nurse job.
Not a tax home: You own a home that you rent to tenants while you travel year-round. You rarely visit the area. You are an itinerant worker.
In short, housing and per diem stipends are tax-free if you have a tax home, and tax-free pay increases your take-home pay. But if you don’t have a tax home, you’ll be taxed the same way a staff nurse would be.
Tips for Strengthening Your Ties to Your Declared Tax Home
Being away from home for long periods can muddy the tax home question. You can take some steps to strengthen your ties to your home while traveling:
- Return home between assignments and whenever you can.
- Use it as your official mailing address. Don’t use assignment addresses.
- Use your tax home address on your driver’s license.
- Open a bank account in your tax home and use it.
- Keep all vehicles registered in your home state.
- File your taxes correctly as a nonresident in assignment states.
- Be involved in your community when you’re home.
- Don’t take travel assignments in the same area for an extended period, or you run the risk of the IRS considering that your new tax home.
When in Doubt, Seek Professional Help
The tax implications of travel nursing can be tricky at first. It’s always a good idea to talk with a tax advisor for tax planning and preparation.
If you’re new to travel nursing, or have questions before you take the first step, our recruiters are happy to answer your questions and help you.
Be sure to check out our frequently posted jobs on Marvel Match as well!