How low should my taxable pay go?

Learn travel healthcare like a from fellow travelers (unbiased and honest)

Travel techs can be paid in a different way than permanent techs are. If we are a true allied health traveler…with a tax home…who is traveling away from that tax home…we are able to be paid in a unique way. Recruiters will offer us an hourly pay rate that is part taxable income and part tax-free reimbursements.

The question:

“New travel tech here! I am about to take my first assignment. I have a recruiter offering me a $14 an hour taxable rate.

Is that too low? What would be the cons if I take that hourly rate?”

The answer:

In the past companies would be very liberal and pay us really low amounts for the taxable amount (even as low as minimum wage!!) and put the rest of the pot of money towards tax-free dollars. This might seem great. We, as allied health travelers, can make more money. Plus, the recruitment companies pay less in taxes too (they only have to pay certain taxes on the taxed wage and not the reimbursements).
But did they take it too far? Many think so.

How we are paid: Taxable and tax-free

The premise behind how we get paid is that we are meant to make a taxed wage similar to what we might make as a permanent employee. In addition to that, we get reimbursements for things like travel, housing, and meals. The government looks at us a bit like someone on a business trip. We are duplicating expenses and they help us offset those extra expenses by letting us not pay taxes on that part of our pay.

But the pot of money the hospital or facility is paying for us with is not actually big enough to pay us the same as we would make as a permanent employee AND tax-free reimbursements. So some companies made that taxable number low. Like- really, really low.

They did this so they could have more money left over to pay us a reasonable tax-free reimbursement for our living expenses. And if they didn’t do this to some degree we would barely get any reimbursement money.

How it impacts travel allied health companies

It is said that they may be more susceptible to being audited. They could also get in trouble for not paying their fair share of taxes.

It also may make us as travelers think – “If they are cutting corners here- where else are they cutting corners for a quick win?”

How it impacts allied health travelers

Tax-free reimbursements are NOT part of your pay in any legal way. If you thinking about buying a home or car soon, getting a loan suddenly gets a lot trickier. As healthcare professionals, we look like we are making closer to minimum wage than our true take-home dollars.

If you are a long term traveler this can ultimately impact your social security money. It also would make disability income or unemployment a lot less if (knock on wood) you needed that. This is because anything official like this will only look at your taxable pay as income.

And lastly, many people claim that we as travelers may get dragged into the company audits as employees. So if we are aligned with a more risky company, we might be more likely to get audited with them.

What is the taxable rate we should ask for?

Just like everything with our industry, it’s always a shade of grey. The average is around $20-22 dollars for our taxable rate and then the leftovers go into our tax-free reimbursements. If you are an LVN or LPN, these numbers may be a bit lower too. (Closer to $15 an hour average).

So.. who is right and who is wrong?

That is for each traveler and company to decide! It’s one of the joys of starting a staffing company. Figuring out where to draw the line (hopefully with the help of some good legal and tax advice). Tax advisors have their own interpretation of IRS rules, ranging from conservative to liberal. And there is no one place that holds the secret safe number. Everyone is guessing the best they can. Even the IRS themselves will audit a company one year and give them a PASS, and then two years later fail them for the same thing. So it seems to be ever-changing as well.

As travelers- we get to decide too! You can decide to not work with companies that are playing the game too risky for your liking. For example, offering $14/hr taxable. You can also not work with the companies that are too conservative if you want to make a little more tax-free money. (Some pay closer to $30 an hour which really cuts into a good tax-free reimbursement.)You get to decide.
For me? As much as I encourage people to stand out. Be unique. Rock this life shining bright. When it comes to taxes- I would much rather blend on in. I like to stay around that average and out of the more risky edges.

I’ll be unique when it comes to traveling or when I decide on a whim to live in some bright red hair. But my taxes? I’m okay being less seen and known.

Cheers to knowing our sh*t about taxes,

xo Laura

Hey friends. This is really important. I am not a tax advisor and the information I provide on this blog about taxes is not legal advice. Please, don’t treat a blog, Facebook, or your recruiter as your tax advisor. But please, learn some theories here and get some great context to go to your tax advisor with questions about your unique situation!

Keep learning, empowered travelers 💪

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Additional Reimbursements

Did your offer come with something extra that would cost the staffing agency money? This may include a CEU class, scrubs, or sign on bonuses. Don’t worry if this section is blank, most offers don’t have extra reimbursements.

Travel Reimbursements

This is tax-free money that is paid to you to help you pay for the expense of traveling to your assignment. Many staffing agencies pay for this per mile up to a certain amount. They will usually pay this on your first paycheck or split between your first paycheck and last. If you are traveling a short distance this could be a very small amount.

Also, it’s becoming more popular for an agency to not offer this at all. It’s really not a big deal though. If you don’t get travel reimbursement money you should make a bit more in your weekly pay so many times it all equals out.

Weekly Housing Stipends

If you have a tax home you can get money in two ways: Your taxable base pay per hour + tax-free stipends that help pay for your housing and meals in your new city. This is usually presented to travelers on a weekly or per shift basis.

The government tells the staffing agency the maximum they are allowed to pay travelers based on the cost of living in each zip code.

The staffing company does not usually get to pay us the full amount since they only have the amount the facility is willing to pay for us. That may end up being less than the government’s max, if so, no worries. This is okay as long as the total package is fair.

Weekly Meal Stipends

If you have a tax home you can get money in two ways: Your taxable base pay per hour + tax-free stipends that help pay for your housing and meals in your new city. This is usually presented to travelers on a weekly or per shift basis.

The government tells the staffing agency the maximum they are allowed to pay travelers based on the cost of living in each zip code. The staffing company does not usually get to pay us the full amount since they only have the amount the facility is willing to pay for us. That may end up being less than the government’s max, if so, no worries. This is okay as long as the total package is fair.

Weekly Insurance Costs

Medical insurance can impact your final paycheck a lot since it will deduct pay from your check each week. If you are taking the company health insurance, you are going to want to know up front about how much this will cost you per week.

The average is around $30 a week but some companies charge as much as $100 a week to their travelers and some offer some health insurance options for free. If you are not taking their insurance just set this to zero.

Hours per week

For this calculation, put the hours per week you are expecting to work. And then feel free to run it again with the hours you are guaranteed. Many times contracts have guaranteed hours that are lower than the expected hours.

Guaranteed hours means if the facility doesn’t need you to come in, you will still get paid as long as it was their choice and not yours to not work.

Also, find out if this contract has any “call off shifts” where the hospital can call you off without pay a certain number of times per contract. This is common and not a deal breaker but just good to know!

Length of assignment

In travel nurses and allied health the most common length of a travel assignment is 13 weeks. If you are looking for a contract shorter or longer just ask! Sometimes facilities or hospitals who hire you will be flexible.

Taxable rate per hour

If you have a tax home you can get money in two ways: Your taxable base pay per hour + tax-free stipends that help pay for your housing and meals in your new city.

If you do not have a tax home all of your pay will be taxed and put in this field.

Good to know: Your taxable base pay is the only part of your paycheck that is legally considered income. The average taxable base pay is $20 but you might get offers higher or lower than this. It’s the only part of your paycheck that is taxed

Nomadicare’s purpose is to empower. It’s the lifeblood that flows through every single thing we create. We are here to make sure every traveler has all the transparent knowledge they need to make empowered decisions. We want you to feel confident so you can live your dream!

Nomadicare is partnered with dozens of companies and each of those companies have access to different settings, locations, and exclusive contracts. We know their benefit options and who have jobs in each location. We will match you to the best recruiters for you and your goals. Every single recruiter has been vetted and comes with the Nomadicare guarantee.
You can browse the open jobs from many of our company partners on the Nomadicare’s anti bait and switch job board. When you see one that catches your eye, the goal is to apply asap. Jobs are closing faster than ever with all the craziness this year so speed is our best friend. When you request an interview, we’ll instantly match you with the vetted recruiter who posted that job.
Typically 0-3 months before you are ready to start your next assignment is best. A short quiz will give us a picture of who you are, and what you are looking for. After the quiz we’ll have everything we need to match you with the perfect recruirer for your travel goals
If you know where you want to go and you’re ready to travel, Instant Matching is perfect for you. You can browse the open jobs from many of our company partners on the Nomadicare’s anti bait-and-switch job board. When you see one that catches your eye, the goal is to apply asap. Jobs are closing faster than ever with all the craziness this year so speed is our best friend.
We highly recommended being ready! Having all of your documents and being super responsive are key. Speed is the biggest factor in getting the job you want. We recommend using a free service like Kamana, which you can share your online resume, credentials, and licenses with a single link to any of our vetted recruiters when requesting an interview.
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