One of the coolest travel therapy secrets? You can get a big chunk of your paycheck tax-free. Yep, it’s totally legal—and totally awesome.
Whether you’re a travel PT, OT, or SLP, you’ve probably heard about stipends—that sweet tax-free money for housing and meals. But how does it actually work? And how do you make sure you’re getting the most you legally can?
In this guide, I’ll break it all down: what travel therapy stipends are, how they’re calculated, and how to use GSA rates to your advantage—so you can feel confident and in control of your pay.
What Are Travel Therapy Stipends?
When you work a travel therapy contract and meet IRS requirements, part of your paycheck can be tax-free. That part is called a stipend, there are usually two kinds:
Housing stipend: This covers your lodging expenses while on assignment.
Meals & Incidental Expenses (M&IE): This helps with food and small daily costs like coffee, gas, tips, and laundry.
Sometimes these are also called “per diems,” but in travel therapy, we usually stick with the word “stipends” to avoid confusion with PRN or on-call jobs.
Where Does a Travel Therapist’s Tax-Free Money Come From?
All of your compensation comes from one place: the bill rate. That’s the total amount the hospital or clinic pays the staffing agency for each hour you work. The agency first takes out its own share to cover business costs and recruiter pay. Then, the remaining amount becomes your total pay package. Your pay package is then divided into three major categories:
- Your taxed hourly wage
- Your tax-free stipends for housing and meals (if you qualify)
- Any extra reimbursements like travel costs to your next assignment or reimbursing for licensure
The government has limits on how much of your pay can be tax-free. These limits are set by the General Services Administration (GSA) and change depending on your assignment location and the time of year.
How GSA Sets Maximum Stipends for Travel Therapists
The GSA publishes per diem rates for each city or zip code in the U.S. These rates include a daily maximum for lodging and a daily amount for meals and incidental expenses. For example:
- In a major city like New York, your lodging max might be $315 per night in the fall. That adds up to $2,205 per week.
- A smaller city may have a lodging rate of $110 per night, or $770 per week.
M&IE rates typically range from $59 to $79 per day, depending on the area. These are fixed daily rates and usually don’t fluctuate month to month like lodging does.
How Travel Therapists Can Look Up GSA Rates (The Easy Way)
The official GSA website can be tricky to use. That’s why we created the Nomadicare Max Stipends Calculator. Just enter your assignment’s zip code and start date, and we’ll email you the maximum weekly stipends allowed in that area for:
- Housing (lodging)
- M&IE (meals and incidental expenses)
This is the fastest way to know what you’re legally allowed to receive tax-free and make sure your pay is fair.
How a Travel Therapist’s Pay Is Structured
Step 1: The Bill Rate This is the total hourly amount a facility pays your staffing agency. It includes everything: your pay, stipends, reimbursements, and the agency’s cut. (ex. A facility agrees to a $70/hour bill rate)
Step 2: Agency Overhead The staffing agency keeps a portion of that rate to run their business. If they keep $20/hour, that leaves $50/hour to build your pay package.
Step 3: Your Pay Package The remaining $50/hour is split into:
- Taxable hourly wage (usually $20–$25/hour)
- Housing stipend (based on weekly lodging GSA max)
- M&IE stipend (based on daily M&IE GSA rate)
- Travel or license reimbursements (if applicable)
This is how blended rates (like $1,800/week or $50/hour) are created—by combining taxed and tax-free components.
Why Travel Therapists Don’t Always Receive the Full GSA Max
You might notice your stipend isn’t as high as the GSA allows. Here are the two main reasons:
- The bill rate isn’t high enough. If the total money available is too low, the agency may not have enough left to reach the full GSA max.
- IRS rules require a reasonable taxable wage. Agencies typically set this around $20–$25/hour to avoid red flags. They can’t give you $10/hour in taxable pay and the rest as stipends—that could be seen as tax fraud.
So even if your stipends don’t hit the max, it might be because the numbers just don’t stretch that far.
What Travel Therapists Should Do If Stipends Are Lower Than Expected
- If your taxable wage is higher than $25/hour and your stipends are under the GSA max, ask your recruiter if they can move more of the taxable pay into stipends. This can increase your take-home pay without changing the total package.
- If your taxable wage is at or lower than $25/hour and your stipends are under the GSA max, there is nothing to do! The bill rate likely is just too low to max the stipends out this time.
Just make sure the change stays within legal guidelines.
What Happens If a Travel Therapist’s Stipends Are Too High?
If your stipend exceeds the GSA max, that part of the money is no longer tax-free. It should be taxed.
Always double-check your GSA limits to make sure everything is compliant.
How Travel Therapists Qualify for Tax-Free Stipends
You have to follow the IRS rules to receive stipends legally. Find out everything you need to know on if you qualify here
The short answer is you must meet IRS rules to receive stipends legally. Here’s what you typically need:
- A permanent tax home where you pay rent or mortgage and keep financial ties
- Your assignment must be far enough away from that home to not be about to commute back home to sleep after work
- You must be duplicating expenses (paying for two places to live)
- You must keep your assignments temporary (less than 12 months in the same metro area)
If you don’t meet these rules, your housing and meals stipends must be taxed.
What Happens to Travel Therapist Stipends If a Shift Is Missed?
Most agencies calculate stipends weekly, but if you miss a shift, they may reduce your stipend for that week.
Why Travel Therapists Should Use the Nomadicare Max Stipends Calculator
Instead of guessing, use our Max Stipends Calculator to check the maximum stipends in any zip code. It’s built specifically for travel therapists and adjusts for seasonality. You’ll get a detailed email with daily and weekly rates for housing and meals.
Final Thoughts
Your travel therapy paycheck is a mix of taxed and tax-free money. When you understand how it all works, you can:
- Spot fair (and unfair) offers
- Talk confidently with your recruiter
- Maximize your take-home pay while staying IRS-compliant
Nomadicare is here to support you with transparent tools and expert advice—so you can take amazing jobs, earn what you deserve, and travel smarter.
