
Travel therapy pay is different from that of a normal salary or hourly position. Travel therapists don't work on an annual basis, but on a week-to-week basis, so pay is discussed in terms of a weekly take-home amount. Travel therapists receive a regular hourly rate (which is taxed) plus a per diem or stipend for housing, meals, and incidentals (which is usually untaxed). This means that travel therapists can make more money than therapists at permanent positions in many cases.
Characteristics | Values |
---|---|
Type of pay | Travel therapists are paid a combination of taxable pay and untaxed money (stipends for housing, meals, and incidentals). |
Taxable pay | Taxable hourly wage. |
Untaxed money | Stipends for housing, meals, and incidentals. |
Additional reimbursements | State license, relocation costs, uniforms, mileage/travel to the assignment, etc. |
Calculating pay | Hourly rate (taxed) + Stipends/Per Diems + Reimbursements. |
Terminology | "Weekly Take-Home" amount = total amount the therapist will make each week. |
"Gross Pay" = total amount before taxes. | |
"Net Pay" = total amount after taxes. | |
"Bill Rate" = amount of money a hospital is paying for each hour a travel therapist works. | |
"Pay Package" = Hourly Rate + Stipends/Per Diems + Reimbursements. | |
"True Traveler" | A travel therapist seeking a contract in a location that is at least 50 miles away from home and requires securing housing for the position. |
"Local Traveler" | A travel therapist seeking a contract where they commute to their permanent home address every day. |
What You'll Learn
- Travel therapists are paid a regular hourly rate, plus a per diem or stipend for housing, meals and incidentals
- Pay is broken into segments that make up the Pay Package: Hourly Rate + Stipends/Per Diems + Reimbursements
- Travel therapists can make significantly more money than therapists at permanent positions
- The pay package for a true traveler is a mix of taxable hourly pay and non-taxable stipends
- Travel therapy reimbursements are typically tax-free
Travel therapists are paid a regular hourly rate, plus a per diem or stipend for housing, meals and incidentals
The hourly rate for travel therapists can vary depending on factors such as the type of facility, location, and the travel company. It is essential to understand that the facility decides how much to offer for the position, and this amount is called the bill rate. The travel company then takes a cut for its costs and overhead, and the remaining amount is paid to the travel therapist. The hourly rate for travel therapists can range from $20 to over $60 per hour, depending on these factors.
In addition to the hourly rate, travel therapists receive a per diem or stipend for housing, meals, and incidentals. The IRS allows this portion of the pay to be tax-free as long as the travel therapist maintains a "Tax Home" at their permanent residence. This per diem or stipend can be a significant portion of the overall compensation package and can make up a large part of the take-home pay.
The total compensation for a travel therapist is often referred to as the "Pay Package," which includes the hourly rate, stipends/per diems, and any additional reimbursements. It is important to understand that the pay package is flexible, and the money can be allocated in different ways to maximize tax benefits for both the travel company and the therapist. For example, more money can be allocated towards the stipend/per diems (which is usually untaxed) and less towards the hourly pay (which is taxed).
When discussing pay, it is common to refer to the "Weekly Take-Home" amount, which is the total amount the travel therapist will make each week, including both the taxed and untaxed portions of the pay. This amount can vary widely depending on the specific contract and the therapist's tax situation.
In summary, travel therapists are typically paid a regular hourly rate, plus a per diem or stipend for housing, meals, and incidentals. The hourly rate is taxed, while the per diem or stipend is usually tax-free, resulting in higher take-home pay compared to a traditional job. The total compensation package can vary depending on the facility, location, and travel company, and it is important to consider all aspects of the pay package when evaluating different travel therapy opportunities.
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Pay is broken into segments that make up the Pay Package: Hourly Rate + Stipends/Per Diems + Reimbursements
Travel therapy pay is broken down into segments that make up what is called the "Pay Package": Hourly Rate + Stipends/Per Diems + Reimbursements.
The way travel therapists are paid is different from a normal salary or hourly position. Travel therapists are paid on a week-to-week basis, so pay cannot be discussed in terms of an annual salary. It also cannot be discussed in terms of a strict "hourly rate" because travel therapists often receive tax-free stipends as part of their pay.
Typically, a travel therapist will receive a regular hourly rate (which is taxed) plus a per diem or stipend for housing, meals, and incidentals (which is usually untaxed, as long as the requirements for maintaining a proper tax home are met).
The pay breakdown for a "true traveler" (someone seeking a contract in a location that is at least 50 miles away from home and requires securing housing for the position) is as follows:
- Taxable Hourly Wage: This is the base pay, based on the hours worked each week. The IRS has different rules for the minimum taxable rate received in each state.
- Meals and Incidentals Stipend: This stipend covers daily expenses like food and transportation and is determined by the hours worked each week. It is non-taxable.
- Housing Stipend: This stipend covers basic housing expenses like rent and is determined by the hours worked each week. It is also non-taxable.
The pay breakdown for a "local traveler" (someone who commutes to their permanent home address every day) is simply a fully taxed hourly wage.
In addition to the regular pay package, travel therapists may also receive additional reimbursements for things like state license fees, scrubs, and mileage/travel to get to the assignment.
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Travel therapists can make significantly more money than therapists at permanent positions
The pay structure for travel therapists is quite different from that of therapists in permanent positions. Travel therapists are paid on a weekly basis, and their pay consists of an hourly rate (which is taxed) plus stipends or per diems for housing, meals, and other incidentals (which are usually untaxed). This structure allows travel therapists to take home more money after taxes compared to therapists in permanent positions, where all of their pay is taxed.
The hourly rate for travel therapists can vary depending on factors such as the type of facility, location, and the travel company. However, it is generally recommended that travel therapists should not accept jobs with pay below a certain threshold, such as $1500 per week after taxes.
In addition to the hourly rate and stipends, travel therapists may also receive additional reimbursements for things like state licenses, scrubs, and mileage/travel expenses. These reimbursements can further increase the overall compensation for travel therapists.
When comparing the pay between travel therapy and permanent positions, it is important to consider the net take-home pay after taxes. Travel therapists often have a higher net pay due to the untaxed portion of their compensation. This can result in travel therapists earning 1.5 to 2 times more than they would in a permanent position, even when taking into account the additional costs associated with travel, such as housing and meals.
By understanding the intricacies of travel therapy pay packages and taking advantage of the tax benefits, travel therapists can maximize their income and achieve financial security.
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The pay package for a true traveler is a mix of taxable hourly pay and non-taxable stipends
Travel therapy pay is different from that of permanent full-time positions. It is usually a mix of taxable pay and untaxed money (stipends for housing, meals, and incidentals). The pay package for a true traveler includes taxable hourly pay and non-taxable stipends. This is because, as a traveler, the IRS recognizes that you are assisting at a facility that might not otherwise have coverage. Hence, they allow for a non-taxable portion of income.
The pay package for a true traveler is broken down into three main components:
- Taxable Hourly Wage: This is the base pay, based on the hours worked each week. The IRS has different rules for the minimum taxable rate received in each state, ranging from $13-$23 per hour.
- Meals and Incidentals Stipend: This non-taxable stipend covers daily expenses like food and transportation and is determined by the hours worked.
- Housing Stipend: This non-taxable stipend is for basic housing expenses like rent and is also determined by the hours worked.
The amount a client offers can vary based on location, setting, and experience. As a travel therapist, you can earn a higher income and achieve financial security. For example, a travel therapist working 40 hours per week and considering a taxable hourly rate of $20 may take home approximately $1,531.37 every Friday. This includes $621.37 in taxable hourly wages (after taxes), a $280 meals and incidentals stipend, and a $630 lodging stipend.
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Travel therapy reimbursements are typically tax-free
The way it works is that your pay is broken down into segments which make up what is called the "pay package". This includes your hourly rate, stipends/per diems, and reimbursements. The hourly rate is taxed, but the per diem or stipend for housing, meals, and incidentals is usually untaxed, as long as you meet the requirements of maintaining a proper tax home.
The IRS requires a portion of your income to be taxed, and this depends on your discipline and status as either an assistant or full therapist. The minimum taxable hourly rate will range from $13-$23 per hour. However, as a travelling worker, you are assisting at a facility that might not otherwise have coverage, so the IRS allows for the non-taxable portion of income.
To illustrate, let's take an example of a travel therapy pay package for a position in Idaho with a taxable hourly rate of $20. For 40 hours of work, the therapist would be taking home approximately $1,531.37 every Friday. The taxable hourly wage (weekly) would be $20 x 40 hours worked = $621.37 (after taxes). The meals and incidentals stipend (weekly) would be $280 (non-taxable), and the lodging stipend (weekly) would be $630 (also non-taxable). So, the total estimated take-home pay would be $1,531.37, which would be the equivalent of a perm employee (in Idaho, fully taxed) making $56 per hour!
It's important to note that this is just an example, and your actual pay will depend on your location, discipline, and other specifics of your assignment. Additionally, travel therapy reimbursements can cover per diems (food and housing) as well as scrubs, continued education, travel, hotel costs, and more. Anything that is a direct cost for your new assignment can be reimbursed tax-free. However, you have to negotiate all travel therapy reimbursements upfront on each new contract, and not all companies offer the benefit of negotiating these things.
Furthermore, reimbursements are not considered income when applying for a house, car, loan, social security, short-term disability, etc. Lenders will look at your taxable wages to consider you eligible for approval. Therefore, it's crucial to understand how to set up your tax home correctly to avoid owing back taxes and penalties in case of an audit. While it's possible to be a travel therapist without receiving any tax-free reimbursements, having a tax home allows you to enjoy the financial benefits of the travel therapy lifestyle.
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Frequently asked questions
Travel therapy pay is different from that of a normal salary or hourly position. Travel therapists don't work on an annual basis, but on a week-to-week basis, and they often receive tax-free stipends as part of their pay. Typically, a traveling healthcare professional will get paid a regular hourly rate (which is taxed) plus a per diem or stipend for housing, meals, and incidentals (which is usually untaxed).
A travel therapy pay package is made up of a few different parts: an hourly rate (which is taxed), a housing allowance or stipend (which is not taxed), and a meal and incidental allowance or stipend (also not taxed). Sometimes, travel therapists will also receive additional reimbursements for things like their state license, relocation costs, scrubs, mileage/travel to get to the assignment, and more.
The amount that travel therapists make varies based on factors such as the type of facility, the location of the facility, and the travel company. A typical range for a traveling physical therapist, occupational therapist, or speech language pathologist is around $1500-1800/week after taxes.