Travel Nurse Vocabulary that You Need to Know
For those of you new to the travel nursing world, or simply investigating the idea, this article will help you when encountering the jargon. The medical industry contains a multiverse of jargon, abbreviations, and acronyms that causes eyes to cross and eyebrows to rise in confusion. Odds are high that some of these terms are already familiar to you. Nevertheless, this is a thorough review of the common vocabulary that you’ll find in travel nurse job postings, contracts, and discussions with your recruiter.
All About the Money, Money!
We’ll address the topic of how you’ll be padding your bank account first. After all, a distinct number of you are considering the switch to travel nursing due to all the media attention travel nursing has received throughout the pandemic, right? Let’s jump on it.
Blended Rate – In the world of travel nursing, you’ll often see a sizeable hourly rate on the jobs postings. What you are typically seeing is what is called a blended rate. The blended rate is actually a formula that combines the simple hourly rate for the work (which is the taxable income) with the reimbursements and stipends that you receive (which are the non-taxable amounts).
Reimbursements – For some of your accrued costs associated with travel, meals, even city transportation you may be able to submit receipts for reimbursement (receive your money back). Each travel nursing agency has different processes for this type of financial transaction so you’ll want to discuss with your recruiter what method or platform the agency uses. Moreover, most agencies also have a cap or a maximum amount that they are willing to reimburse. Again, question for details on this topic are encouraged!
Stipends – While some agencies apply financial assistance to travel nurses for their travel expenses via reimbursements, others simply offer a stipend. A stipend is a set amount of money (non-taxable) provided to you for the cost. Stipends are the form of financial assistance most often used by agencies for housing costs.
Shift Differential – Some shifts (often night shifts or holiday shifts) offer a shift differential, which is an additional padding to the hourly rate for the shifts. Shift differential is less common in the travel nursing umbrella, so if you see it in a job posting, read the fine print carefully. It may be motivated by an extreme need for the facility.
Missed Hours Penalty – We strongly advise against missing any contracted shifts, however if the situation arises be warned that you will likely incur a penalty. In the case of a missed hours penalty, you’ll be docked the hours for the shift, likely also an amount of the stipend or benefits.
Bonuses – Likely, everyone knows what a bonus is, yet what you might not know is that it has tax implications. Bonuses are taxable. Not only are they taxable, but they are often taxed at a higher rate. The IRS identifies a bonus as a supplemental income thereby classifying it to be taxed at a higher rate of withholdings. A bonus could also bump you into a higher tax bracket, in which case you should talk to a tax advisor about having the bonus deferred for a year. If you see a large bonus in a contract, talk to your recruiter to ask if you have any room to negotiate instead for a higher stipend or reimbursement cap.
Employee Types and Taxes
Here, we’ll dig into what type of employee you technically are. This is especially important when it boils down to your taxes.
W-2 Employee – Does your travel nursing agency have a W-2 on file for you? If so, this means that the agency is withholding payroll taxes for you. When tax season comes around, W-2 employees typically owe less or even receive a refund at tax time.
1099 Contractor – If you’re an independent contract employee this means at tax time you’ll receive a 1099 tax form. This means zero payroll taxes have been withheld from your taxable earnings throughout the year, meaning come tax time you’ll likely have an amount due for the IRS.
Payroll taxes – Payroll taxes, are withheld from W-2 employees on their earnings throughout the calendar year. This group of taxes includes your mandatory contributions to Social Security, Medicare, and additionally income taxes.
Per Diem – When a traveling clinician works per diem, this means they pick up shifts at a medical facility on an as needed basis, not on a set schedule or routine. This is routinely posted or advertised as PRN. Typically, PRN shifts are paid out as independent contract work, so even if you have a W-2 on file with your agency, you’ll likely receive a 1099 at tax time as well for any additional PRN shifts you pick up.
Tax Home – Travel nurses simply must have what is called a tax home in order for the stipends and reimbursements to classify as non-taxable income to the IRS. This means, you need a home base for in between assignments. The reason those portions of your income are considered non-taxable is because the IRS identifies travel nurses (who have a tax home) are incurring double costs.
Guaranteed Hours – Look for job postings that offer guaranteed hours. The last thing you want is to arrive and have your hours cut (therefore your benefits and income) when they drop you from a few shifts. Guaranteed hours may not cover the entirety of shifts offered on your contract, so be sure to check those numbers when you budget.
Day/Night Rotate – Often posted as a D/N acronym this means within your contracted period you’ll be expected to work both day and night shifts, possible even within the same week. This isn’t necessarily a negative point to the contract, yet it warrants further questioning about the turnaround time between a rotation and a personal decision of whether you’re willing to do it.
Required Hours – This one is self-explanatory, it’s simply the number of hours that you are required to work in one week while on contract. It generally can be as high as 48 hours and as low as 24 hours.
Become a Travel Nurse with Elite Specialty Staffing
Call us today so we can answer your questions and start you on this journey together! We offer comprehensive benefits, stipends, and a referral program. Together, we can help you build a beautiful travel nursing career.