Understanding Travel Nursing Pay Packages Taxed Wage, Variable Wage, Stipends... We're here to break it all down.
Updated July 21, 2021
Tax Free Stipends (Per Diem)
When you first start out on your traveling career, you may find yourself confused by the way travel nursing pay packages break down.
Taxed hourly, variable hourly, stipends, travel reimbursement…there are a lot of factors that come in to play when figuring out how much you will be paid weekly.
Sample Breakdown of a Travel Nursing Pay Package
What you hear: $47.92/hr variable.What your contract shows:
Taxable Hourly: $18/hr
Housing Per Diem: $770/wk
Meal Per Diem: $427/wk
Guaranteed: 40 hours a week
It’s easy to understand why there could be some confusion seeing $18/hr on your contract when you remember hearing $47.92/hr from a recruiter. That’s where the variable rate comes in to play (taxed + untaxed hourly wage variable together.). Here’s the formula to find your variable hourly rate.
Taxable Hourly * Guaranteed Hours = Taxed Weekly Income
Housing + Meal Per Diems = Untaxed Weekly Income
Now we have our Taxed Weekly Income and Untaxed Weekly Income, let’s add them together.
Taxed Income + Untaxed Income = Weekly Gross Income
Weekly Gross Income / Guaranteed Hours = Variable Hourly Rate.
To figure out your variable rate for the example contract above we would follow the same formula:
$18 * 40 hours = $720 Taxed Weekly Income
$770 + $427 = $1197 Untaxed Weekly Income
$1197 + $720 = $1917 Weekly Gross Income
$1197 / 40 hours = $47.92 Variable Hourly Rate.
So now you know how the contract breaks down, but why do the contracts work this way?
Taxable Wage - $18/hour
Let’s start with the basics, and something we’re all familiar with – Taxable Wage. This is your base pay, and is used in tandem with your tax free stipends to create your variable wage. This is the only portion of your wages that you will be paying taxes on. Typically this will be lower than what you are used to seeing from local/perm positions.
Tax Free Stipends (Per Diem)
Traveling medical professionals are provided with tax free monetary incentives in the form of housing, meals, and incidental stipends. These stipends are not technically classified as income, but rather reimbursements, which means they are non-taxable.
Stipends are just one of the multiple ways nurses and other medical professionals are incentivized to travel. Other common incentives are travel reimbursement, sign on bonuses, referral bonuses, continuing education credits, and so much more.
All of these factor in to how much you’ll make on your assignment, so they should all be taken in to consideration when looking for a good fit. Be sure to check out cost of living in your area, decide if you’ll be flying or driving, and work with your recruiter to find the best contract for your situation.