Reading a pay package

What's in a pay package

Almost every travel package has three pieces:

• Taxable hourly rate. Taxed like any paycheck. Overtime, holiday pay, and missed-shift deductions are usually figured from this number.
• Housing stipend. Weekly money for lodging, tax-free if you qualify.
• Meals and incidentals (M&IE) stipend. Weekly money for food and small costs, tax-free if you qualify.

The agency decides how to split the total. The hospital pays the agency one bill rate; the agency takes its cut and divides the rest into taxable pay and stipends. A low taxable rate with big stipends makes the weekly number look bigger after taxes. That's the whole reason packages are built this way.

Recruiters sometimes quote a "blended rate": the weekly gross divided by your hours. It's useful for comparing offers quickly but tells you nothing about the split.

The tax-home rule

Stipends are only tax-free if you're traveling away from your tax home, the place where you normally live and work, and you keep paying for it while you're gone. The idea is that you're paying twice: once for home, once for the assignment. If you aren't, there's nothing to reimburse, and the stipends are just wages.

For people who work in different places, the IRS uses three questions (IRS Publication 463):

1. Do you do part of your work in the area of your main home, and live there while you do?
2. Do you have living expenses at your main home that you duplicate because work takes you away?
3. Have you kept living in the area of your main home? For example, family lives there, or you return there often.

Yes to all three: you have a tax home. Yes to two: the IRS looks at your situation more closely. One or none: you're treated as itinerant, your home is wherever you work, and stipends are taxable.

Two more rules to know. An assignment in one place that's expected to last more than a year isn't temporary anymore, so stipends for it become taxable. And if you work near home (many agencies use a 50-mile line), you'll get a local contract with everything taxable.

If the agency pays you tax-free stipends but you don't qualify, you owe the tax, not the agency. Talk to a tax preparer who works with travel nurses before your first contract. This guide isn't tax advice.

How big stipends can be

Agencies cap tax-free stipends at the federal GSA per diem rates for the county you'll work in. For federal fiscal year 2027 (October 2026 through September 2027), the standard rate that covers most of the country is $113 a night for lodging and $68 a day for meals. Expensive areas run much higher.

At the standard rate, the most an agency would usually pay tax-free is about $791 a week for housing and $476 for meals, $1,267 a week in all. Look up the county before you compare offers. A Bay Area contract and a rural Kansas contract have very different ceilings.

Two $2,400 offers that aren't equal

Two agencies offer the same job: 36 hours a week, 13 weeks, about $2,400 a week. The location gets the standard GSA rate.

Same weekly number. Now look at what happens over 13 weeks:

• If you have a real tax home and work your 36 hours, Offer A puts more in your pocket. About $11,000 more of it is tax-free; at roughly 30% combined tax, that's around $3,300 more take-home over the contract.
• If you pick up a lot of overtime, Offer B catches up fast. Every extra hour is worth $35 more.
• If you don't have a tax home, both offers are fully taxable and nearly the same, except that B pays far better overtime. Offer A's low base just costs you.
• If you're buying a house or applying for a loan, lenders usually count only taxable pay. Offer A makes you look like a $31-an-hour nurse.

A very low taxable rate, well below what staff nurses at that hospital earn, is also a red flag for the IRS, which can treat part of the stipend as disguised wages. Most reputable agencies keep the taxable rate at a believable level for the area.

Figures are rounded and for comparison only. Your tax rate depends on your state, filing status, and total income.

36 hours vs 48, and extra shifts

Divide the weekly number by the hours before you compare. A 36-hour contract at $2,000 a week works out to $55.56 an hour, stipends included. A 48-hour contract at the same $2,000 is only $41.67 an hour, and you work a whole extra shift every week for it. Same check, much worse deal.

Now say you're on the 36-hour contract and the unit is short, so you pick up a fourth 12-hour shift. Your stipends don't grow; only the taxable rate pays for that shift. If the taxable rate is $14 an hour:

That's about a third of the $55.56 an hour you're effectively earning on your first three shifts. It may not matter to you, but know it before you say yes to every call.

• In the interview, ask the manager how often travelers are asked to pick up extra shifts.
• If it's often, ask the recruiter for a shift bonus: a set amount for each shift you work beyond your contract. It's commonly $300 to $400 a shift. Get it in writing.

Ask for more

It never hurts to ask. If the pay doesn't cover what the assignment will cost you, say so and ask for more. The worst answer is no.

• Travel money. A recruiter may offer "$500 round trip" when they're actually allowed to give $500 each way. Ask.
• Rate and stipends. If the area's housing costs more than the stipend, ask for a higher rate or a bonus to make up the difference.
• Shift bonuses if the unit is known for asking travelers to pick up extra shifts (see above).

One catch: when travel money is paid for the trip there and back, you usually won't get the trip home if you don't finish the contract, even if leaving wasn't your choice. Ask how it works, and get it in writing.

Everything else in the offer

• Travel reimbursement. Usually a flat amount, often paid half at the start and half at the end. If the contract doesn't finish, you usually lose the trip home.
• Completion and extension bonuses. Taxable, and you get nothing if the contract ends early, even if the hospital ends it.
• Health insurance. Ask what it costs you per week, when it starts, and what happens between contracts. A gap of more than a few weeks can mean losing coverage.
• 401(k). Contributions and any match are based on taxable pay only, so low-base packages shrink them.
• Guaranteed hours. If the hospital cancels your shift, does the agency still pay you? Many contracts let the hospital cancel one shift per pay period without paying you.
• Missed-shift penalties. If you miss a shift, some agencies take back stipends for that day too, not just the hourly pay.
• Holiday, on-call, and call-back rates. These should be in writing. "Holiday pay" might mean time and a half, or a few dollars an hour more.
• License and certification reimbursement. Some agencies pay for a new state license or ACLS renewal. Ask before you pay for one yourself.
• Agency housing. If you take it, you give up the housing stipend. Compare the stipend to what a furnished rental there really costs.

Myths recruiters repeat

• "The 50-mile rule is an IRS rule." It isn't. It's an agency policy for deciding who gets stipends. Being 51 miles from home doesn't give you a tax home.
• "You can't work within 50 miles of home for a year." Also agency policy, not tax law.
• "Stipends are free money." They're only free if you're really keeping up a home while you're away.
• "We pay the highest stipends." Every agency pays the GSA rate or less. Higher stipends usually mean a lower taxable rate.

What to ask before you sign

• The taxable hourly rate, housing stipend, and meals stipend, separately and in writing
• The overtime, holiday, on-call, and call-back rates
• How often travelers pick up extra shifts, and whether there's a shift bonus for them
• How many hours are guaranteed, and what you're paid if a shift is cancelled
• Whether stipends are taken back for missed shifts
• Travel reimbursement amount, whether it's each way or round trip, and when it's paid
• Any bonus, and exactly what you have to do to earn it
• Health insurance cost and start date
• When your first paycheck arrives

Then put two offers side by side the way the example does: hourly value including stipends, taxable pay, overtime rate, and what you'd lose on a cancelled shift.