Stipends are a huge benefit for health care travelers. The reason for this is that travel stipends for housing, and meals and incidentals are not taxed. This allows the traveler to bring home a higher percentage of their pay package and pay less in taxes.
How Do Travel Nurse Stipends Work?
When traveling for work, it’s standard for nurses to receive stipends from their staffing agency, unless their employer pays for their housing directly. Often, nurses are given a choice between the two.
Stipends include funds to cover the costs of housing, and sometimes meals and incidentals, too. (Some staffing agencies pay for meals and incidentals upfront, while others will reimburse those costs later.)
Depending on the agency, housing costs are paid weekly, biweekly or monthly — but always in one lump sum. And, as part of the total travel nurse salary compensation package, stipends are treated as non-taxable income if the nurse maintains a “tax home” elsewhere. A “tax home” may be the city where the nurse’s primary residence or place of employment is located.
The travel nurse housing stipend varies based on city and state, so there is no one standard amount. Staffing agencies determine for themselves how much the stipend should be, usually based on:
The bill rate that the hospital agrees to pay
IRS guidelines
GSA rates established by the General Services Administration
The bill rate includes all of the expenses the agency incurs to employ a travel nurse. This consists of the salary, stipends, employee payroll taxes, employee benefits, and credentialing costs as needed for a traveling nurse assignment. It also includes the agency’s profit.
GSA per diem rates are set by the federal government and reflect the “reasonable” amount of money that it costs for lodging in a particular area. Rates are based on cost of living, current housing costs, and other factors, and are subject to change every year.
Which is Better: A Housing Stipend or Agency-Provided Housing?
For nurses, there are many benefits to choosing a housing stipend over the option to live in agency-provided housing.
First, nurses must spend their stipend amount on housing, but they don’t have to spend every penny of it. When renting short-term housing, such as an extended-stay hotel, many nurses spend less and save or use the difference to cover other living expenses. This is only possible if the agency has no caveats about doing so.
Another benefit to the stipend is that nurses can choose their own housing options and decide where to live. This offers more options for privacy, as they won’t have to live with coworkers if they don’t want to.
Agencies can benefit both from offering stipends and by providing paid-for housing.
For agencies, one benefit of the stipend is that nurses enjoy having the opportunity to live where they want to live. It also eliminates the need for the agency to arrange housing.
Another benefit of the stipend is that if the contract gets canceled with cause by the nurse, the nurse will be on the hook for paying any lease they signed or agreed to pay for with their stipend. In this scenario, the agency will not be responsible.
The biggest benefit of offering agency-provided housing is that the agency might be able to spend less per week than the stipend amount per week allows for. This can increase the agency’s bottom line and is a key reason some staffing firms prefer this option.
In Summary...
There are a lot of factors that go into travel stipends and what is best for you. In most cases, it is best to maximize your allowed stipends so that your taxable income is lower and the amount of money you get to take home is higher! Make sure your recruiter and staffing company are maximizing your pay and doing what is best for you! We also suggest checking with a tax professional for questions on your taxes or liability.