Understanding the Bill Rate - The Gypsy Nurse

By The Gypsy Nurse Staff

September 16, 2018

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Understanding the Bill Rate

Understanding the Bill RateAll of your compensation and the companies expenses/profits will come from one thing; The Bill Rate.  A bill rate is the amount contracted for the hospital to pay the agency based on hours worked for each nurse contracted.  You as the travel nurse may never know what your bill rate is between the agency and the hospital.  What you need to know is how it’s broken down and why you only have a certain amount to negotiate with.

Bill Rate Broken Down
Bill Rate: $65/hr
Nurse pay rate: $35/hr (~53%)
Social Security and unemployment,
workers compensation,liability,
malpractice, recruitment and
other administrative costs (including profit or GPM): $30

The best way that I can think to break down the bill rate is by thinking of the Bill Rate as a huge pie.  Each separate component is a slice out of the pie.  Each individual contract has its own pie….some are large and some are small.  This is dependent on many factors including:  location, hospital size, company relationship with the hospital, level of hospital need, etc.   Ultimately, the size of the pie is beyond your negotiation.  There is a separate contract between the hospitals and the nursing agencies that define this.

The travel company is going to take a percentage of the pie right off the top.  It’s important to remember that your recruiter does not have a say in this.  This is generally corporate mandated and covers such things as overhead for the company, employee salary/benefits and a defined profit margin.  The amount of the pie that the company will lock out of negotiations varies from company to company.

The standard gpm (gross profit margin) is 20-22%. Some agencies, the larger agencies maintain a 25% gpm for most contracts.   Smaller companies tend to maintain a lower GPM, as low as 15%.

– Crystal Lovato, Placement Specialist at Freedom Healthcare Staffing

The last part of the pie belongs to the traveler (you).  There are several items that will come out of your part of the pie.  These may include:

– Travel reimbursements
– Licensing reimbursements
– Any benefits offered ie. 401K, health insurance, etc
– Housing

and last but not least…..Salary.

How these items come together in your contract is discussed in Preliminary Contract Negotiations. Check out the TOP 10 Questions for Travel Nurses on Taxes

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