Staffmax Healthcare Staffing and Recruiting provided this article.
Article was written by: Julie Hesseltine, RN, CNO, and Sr. Recruiter for Staffmax.
How many ways have you seen rates posted online by different companies? The answer to this question is most likely; “A lot!”. Today, it is time to take an in-depth look at the rates and what they mean. As a beginning traveler years ago, I had a difficult time understanding rates until someone took the time to explain.
The first-rate seen may be on an online advertisement with a weekly rate of X to Y. These rates are usually based on a percentage of the Bill Rates given by facilities and auto-calculated. They are the eye-catchers that make you look. What these rates don’t capture are the smaller details like the location of the position, the exact workman’s comp code that needs to be calculated, and the allowable stipends for the season or the area in which the job is located. Travel rates will be explained below, so let’s have a look.
Travel Rates Explained:
Now, open the ad and see what is inside. What details are listed? Pretend that all of the following information is listed.
- Hourly Rate – The hourly rate that is fully taxable; This must be at or above the state’s minimum wage.
- Taxable Gross – the weekly amount that is fully taxable
- Blended rate – the combination of the taxable hourly rate and the Tax-Free Stipends (hourly) rate
- Overtime rate – anything over 40 hours/per week and, in some circumstances, over 8 hours/per day.
- Gross pay – total weekly pay BEFORE taxes.
- Stipends are listed individually as Meals & Incidentals and Housing. Each having a maximum/day or week.
Bill Rates will not be listed by the staffing agency but will be discussed below. Bill rate is the rate that the facility pays the staffing agency.
Let’s start with the Hourly Rate. These rates are fully taxable.
The higher this rate, the more taxes you will pay and the higher your Taxable Gross will be. Some will want a higher rate at times because they wish to purchase a new home or a new car, and the bank needs to see paperwork with a higher gross income. Let your recruiter know this. Most agencies are operating on an extremely low margin, so the more you are taxed, you may see that the actual weekly gross must be decreased due the taxes that must be taken out. It is a balancing act. (For those that do not have the ability to DUPLICATE EXPENSES, the entirety of the check should be based on hourly rates without stipends to remain free of issues and fines with the IRS in the event of an audit. Travel Nurses do get audited!)
The Blended Rate:
By definition, an easy explanation is the combination of the hourly rate plus the hourly rate of the stipends. There are those who do not wish to see or care about the Blended rate, and often that is because this is the tricky one to understand. The higher the blended rate, the better, right?
This leads us to the Stipends.
What are they, and how are they calculated? The stipends are based on the state, and often the city of the position one is applying for. This is the daily or weekly amount that a traveler will receive TAX-FREE for meals, incidentals, and housing. The government has a maximum amount that can be given, and one would be wise to go to https://www.gsa.gov/travel/plan-book/per-diem-rates to learn more about these rates. The “standard rates” for Meals and incidentals is $59/day, and Housing is $98/day. Thus, one often sees $157/day or $1099/week if given 100% stipends. These are then broken down into an hourly rates for the purpose of identifying the Blended rate. However, there are many towns, vacation spots, and cities that may have higher rates. The more one can receive as a tax-free stipend, the more “take home” in the end because you don’t have to “give it away” to the IRS. However, in order to receive stipends, there are IRS rules and regulations that must be followed, such as duplicating expenses that must be followed. It is very important to follow up with an accountant to discuss what you can and cannot do so that you do not get into a tax predicament. No recruiter should ever try to give the answers pertaining to accounting and tax law! These recruiters can guide you, but it is your obligation to contact an accountant.
Gross Weekly Rate is always before taxes.
Why can’t we, as recruiters, give you the actual amount in a quote? We don’t know anything about your home state’s taxation codes. We don’t know the tax codes in the state in which you are working. We don’t know how many dependents and deductions you can have. ETC. Yes, we, as recruiters, are asked! Yes, we, as recruiters, will occasionally find a candidate who gets upset because they thought the quote weekly rate was the net take-home.
Now we arrive at the Overtime Rate.
Overtime rates vary widely. Facilities do things quite differently, all in part due to the contracts that have been signed with the facility pertaining to the overtime rate. Some facilities allow an added $10 for overtime calculation, others 1.25x the Bill rate, others 1.3X the Bill rate, and still others 1.5x the Bill rate. It is becoming more popular for facilities to only allow overtime rates after 48 hours if it is a 48-hour contract. Everything that is quoted and offered comes out of the Bill rate that each staffing company is allowed to bill for. It is very obvious that some positions have great OVERTIME RATES, and others have not-so-great OT rates, but this may help explain why. Finally, it is also important to realize that some staffing companies’ overtime rates are based on the Hourly Rates, and others base it in part on Blended rates.
Finally, let’s take a moment to discuss the Bill Rate.
Some feel that if a staffing company doesn’t tell the Bill Rate, they are a bad agency or a bad recruiter. Some will let candidates know the Bill Rate, but most are not allowed to discuss this. The Bill rate is what the agency is given, or allowed to bill the facility, for each hour a healthcare worker is paid for working. It is higher than what the Healthcare worker is paid. Out of the Bill rate comes the licensing fees, workman’s comp insurances, taxes, wages for the recruiter, and others at the staffing agency, among other expenses. A company may keep any amount they choose prior to creating a pay package for a healthcare worker. It is up to the healthcare workers to find a position and pay package so they can say yes to working. Think of the pay package in the same way a retailer thinks of products on his shelves. The retailer paid wholesale for those products. That amount is “X.” He wants to make a profit, but not so much that the consumer will not purchase. But taking calculating utilities, repairs, updates, salaries of others, shipping costs, and adding the prices of the goods, etc., the retailer now knows what he needs to break even. The cost of the product he is selling is now “X + Y = Price of the product.” The pay package is the product you are willing to sign a contract for. If you don’t like what you see, move on. Find something else that suits your needs.
I hope that for those who have had trouble understanding the different pieces that make up a Pay Package, this will make it easier to understand. If not, send me a PM and I will try to answer your questions. Never sign a contract until you fully understand what you are signing.
We hope this article on travel rates explained helpful. Do you have any other questions about travel rates? Comment them below.
Our job board is a great place to search for your next travel nurse assignment. We have you covered with our housing page if housing is an issue. You can search for what you are looking for.
