Travel Nursing Terminology: Financial Edition

Written by Health Providers Choice on Thursday, September 08, 2022 Posted in Travel Nurse Tips


Nurses are well-versed in medical terminology, but what about finance? Financial terms and concepts can be overwhelming, especially for new travel nurses. From tax homes to blended rates, travel nurses need financial literacy to understand assignment contracts, tax implications, and money management.

Financial literacy is crucial for travel nurses

Travel nursing comes with its own set of financial concepts to learn. While you don’t need to be an expert, it’s important to build a basic understanding of these terms before you begin your travel nursing journey.

Without this knowledge, you might misinterpret crucial parts of your contracts, which ultimately detail your compensation, benefits, and expectations. By knowing these terms and concepts, you’ll become a master at comprehending contracts — and working them to your benefit. Financial literacy also ensures you know how to manage your taxes. Your financial literacy is the key to smart money management.


Financial terms travel nurses should know

Some of the most common financial terms you’re likely to encounter as a travel nurse include:

  • Blended rate: A formula-based number that combines a travel nurse’s taxable hourly pay rate with their nontaxable benefits, such as stipends and reimbursements. Job postings often show the blended rate to illustrate the full compensation package.
  • Shift differential: Additional hourly payments for a particular shift at a healthcare facility. Shift differentials may apply to night and holiday shifts during which the need is greater. Shift differentials are not always found in travel nursing assignments.
  • Stipend: A set amount of nontaxable money provided by the agency. Stipends are typically used for housing expenses on assignments if you do not choose agency housing. Stipends may vary based on the cost of living in your assignment area.
  • Per diem: An allowance that may be used to cover the cost of daily meals and incidental expenses while on assignment. Per diems are nontaxable and are usually paid weekly.
  • Reimbursement: Tax-free money a travel nurse may get back for food, transportation, or travel expenses. Travel nursing agencies may have a cap or limitations on reimbursements.
  • Bonus: Extra pay provided for several reasons, such as contract acceptance and holidays. Bonuses are taxable and are usually taxed at a higher rate than a standard hourly wage. Not every assignment will pay a bonus.
  • Missed hours penalty: The cost a travel nurse must pay if they miss a contracted shift. The penalty may dock the hours from the shift as well as associated stipends or benefits from the overall pay.
  • Tax home: Per the IRS, your tax home is “your regular place of business or post of duty, regardless of where you maintain your family home.” In the case of travel nurses, your tax home may be your permanent place of residence if you live there after your contract ends. Clearly defining your tax home allows you to take advantage of per diem rates or nontaxable housing stipends.

Financial literacy is not only important for travel nursing contracts and other aspects of your career, but it can also pay dividends to your personal finances as well. Having a solid understanding of your pay rates, bonuses, stipends, and tax liabilities can bring confidence to everything from budgeting and saving to preparing for tax season.

Confused about the financial terms or concepts outlined in your travel nursing contract? Talk with your Health Providers Choice recruiter to gain clarity and confidence. Education is a big part of developing your career as a travel nurse, and HPC is here to help every step of the way. Contact us online or call us today at 888-299-9800.

About the Author

Rose Torrento

Rosemarie Torrento has worked in health care for more than 26 years, beginning as a registered nurse in 1988. Early in her nursing career, Torrento worked as a freelance contract nurse before accepting a position in nursing administration. During her 17-year tenure in that role, she oversaw nursing employment and travel nurse contracting at a Level 1 Trauma Hospital in Michigan. Understanding the challenges travel nurses faced, Torrento founded Health Providers Choice Inc. (HPC) in 2003. Through Torrento’s extensive experience and her role as President and CEO, HPC provides travel placement of registered nurses and allied health professionals to hospital systems nationally.