How low should my travel nurse taxable pay go?

Travel nurses can be paid in a different way than permanent nurses are. If you are a true travel nurse…with a tax home…who is traveling away from that tax home…you can be paid in a unique way. Recruiters will offer you an hourly pay rate that is part taxable income and part tax-free reimbursements.

The question:

“New travel nurse 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 nurses really low amounts for the travel nurse taxable pay (even as low as minimum wage!!) and put the rest of the pot of money towards tax-free dollars. This might seem great. Travel nurses 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 you are paid: taxable and tax-free pay

The premise behind how you get paid is that you are meant to make a taxed wage similar to what you might make as a permanent employee. In addition to that, you get reimbursements for things like travel, housing, and meals. The government looks at you a bit like someone on a business trip. You are duplicating expenses and they help you offset those extra expenses by letting you not pay taxes on that part of your 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 you 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 you a reasonable tax-free reimbursement for your living expenses. And if they didn’t do this to some degree, you would barely get any reimbursement money.

How it impacts travel nurse 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 travel nurses

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, you look like you are making closer to minimum wage than your 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 us 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 you should ask for?

Just like everything with our industry, it’s always a shade of grey. The average is around $20-22 dollars for your taxable rate and then the leftovers go into your 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 no one place 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 stuff about taxes!

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!

Laura Latimer

Laura Latimer

Travel OT and Founder of Nomadicare

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