Financial benefit of being a Travel/Agency Nurse?

[ImKosher]

During my time at a busy ER on the East Coast, I was blessed with the oppurtunity to meet many great and awesome RNs who worked hard and had passion behind what they do. This is the reason I went back to school and I am graduating this May. I got a position in the ER I work at and will be for two years and then traveling.

I got into a discussion with a good friend and she cannot comprehend making great money as a Travel nurse. She does nto believe the fact that a Travel nurse can make more than 100k a year. I explained the tax-free home stipend and how you can manipulate this with your hourly and OT to take more home that is tax-free but I am now interested in the math. I am not asking how much you make but rather the math on how a traveler makes good money, including the home stipend (with or without housing), hourly rate, and other compensation like benefits.

I think I may be turning into a number nerd. Any input would be appreciated. Thank You!

[jodyangel, RN]

Ned I've never traveled. I have fears and am trying to figure out the best course for me. The salarys are estimates. We can let this thread die.

[jodyangel, RN]

...what's wrong with $40 OT tho??

[NedRN]

Most travel assignments have compensation between $40 and $50 an hour base pay. You can use PanTravelers calculator to figure out what agencies are really offering for total compensation. That means that while a bill rate goes typically from $60 base to $90 overtime rate, you total pay actually drops on OT because you are not longer getting stipends, just a miserable base rate times one and a half. So the agency goes from making 22% gross profit (industry average) or about $13 an hour, to about $60 an hour (pure net profit as all their expenses and fair profit have been figured on base hours). In the meantime, you are getting the other $30 an hour ($20 base rate times one and a half), a drop in pay.

That doesn't strike me that the agency has given you any incentive to work overtime to make more money for them. While there are different bill rates that are not as lucrative as this example, if you do the math, even on very rare flat rate contracts, an agency can always make a profit on a $50 OT rate. I would not accept less if I cared to work OT and it was available.

[jodyangel, RN]

As I understood the reason for paying a low hourly rate was to tax shelter most of your money. The per diem and housing money is not taxable.

[NedRN]

Yes, but it has the undesirable effect of lowing OT rate if it is not adjusted. This shifts most of the profits from working OT from the worker to the agency. Up to you how to negotiate pay, but even in NC you got more than $40 for OT.

[jodyangel, RN]

I'm confused. I thought if I work OT the pay goes to me? What do you mean by it goes to the agency??

[NedRN]

You work for the agency. They pay you a portion of what they bill the hospital by calculating all the expenses: your compensation and stipends, their office expenses, marketing, recruiter pay, and so on. Everything they keep is called gross profit and the industry average is around 22%. On a typical bill rate of $60 an hour, they pay you about $47 an hour (remember I said most assignment pay between $40 and $50 an hour?). All the expenses are calculated by you working 36 or 40 hours a week (or whatever are the contracted hours). Once you start making overtime, the calculations are very different.

You mentioned a pay rate of $8 an hour in one of your posts. At time and a half, that would be an overtime rate of $12 an hour. The agency typically bills time and a half on the base bill rate so they are making $90 an hour. No expenses means that they would then be keeping $78 for every OT hour you work.

Now that is a super extreme and unlikely example (I've never run across an agency paying a taxable rate of $8 an hour), but let's say your base rate was $20 and OT is now $30 an hour. That still leaves the agency $60 an hour of pure profit from each hour of OT you work. That is not uncommon. You have taken a pay cut from $47 to $30 an hour to work overtime, and the agency has gotten better than a $30 an hour raise.

[jodyangel, RN]

...so I need to ask them Exactly what I'll see in My pocket? They did tell me OT was $40/hr. They didn't mention I wouldn't see that in My pay?

[NedRN]

I'm not sure what you are asking. If you think $40 an hour (less than you make for straight time) is fair after my explanation, go for it. Presumably it is even less than I stated as it will be fully taxed.

[jodyangel, RN]

Well I have no choice. I cannnot find a local job quickly enough and my mortgage will come due ect ect...so a girl has to do what a girl has to do.

[NedRN]

With around 400 agencies and the ability to negotiate, you don't have to settle. I agree that you have to do with what you have to do to pay your bills.

[jodyangel, RN]

Well I went with a recommendation from a friend. It's very hard to negotiate when you've never done this before.