Paid more than perm staff nurses?

ukstudent · Jun 24, 2007

I am not sure why this argument is going on. This is a forum for travel nurses and sheri is a state worker. Unless all nurses become state/federal workers, why is anyone taking about pensions. The majority of nurses do not work for the state or federal government and the idea of a pension is a joke. Ask the steel/car industry workers what happened to theirs?

Sheri257 · Jun 24, 2007

Ok ... sorry ... it was mentioned as one of the pro's and con's of travel nursing but ...

I'll bow out.

Medic15251 · Jun 25, 2007

Since pensions and 401k's are types of compensation staff nurses and travel nurses receive, I don't see why comparing the two is off topic. Pensions, while becoming more and more rare, would more typically be seen with staff nurses, while most travel companies offer 401k's. So to compare which one offers the greater return would be completely relevant to the op's question.

To sheri:

So I don't see how you can assume a 12 percent rate of return in that scenario.

I can assume an 11-12% return because that is the average rate of return since the market's inception. I don't try to time the market. I leave my money in good growth stock mutual funds with a good 10 year plus track record.

So, to tie this in with the op's question, I believe that a travel nurse's 401k plan is better than a staff nurses pension plan as a general statement. I'm not saying pensions are horrible, just not realistic for me.

NurseguyFL · Jun 25, 2007

caroladybelle:
You and your four travel coworkers are wrong. Whether you maintain a permanent residence or not you still have to count the free housing or housing stipend as compensation from your company.

Of course, we're all entitled to our points of view but I agree with Carol on this. If you maintain a permanent tax home elsewhere, then housing and certain other work-related miscellaneous costs are expenses, not income; so, I do not regard that money as income. As far as the IRS is concerned, it does make a difference if one has a permanent tax home when traveling for work because that is the only circumstance in which they will cut you a break with the taxes. One hundred percent of the money that an agency pays you for these expenses (if you don't have a permanent tax home) is taxable. And, after the taxes are taken out you will not end up with more money (than a staff nurse) in your pocket unless: 1.) you are putting in quite a few OT hours, or 2.) you also work at another job, of 3.) your permanent tax home is in a location that doesn't require you to pay income taxes to the state or municipality.

A fourth case scenario would be if your actual hourly pay rate is substantially higher than that of a staff nurse who works in the same area. This used to be the case years ago when travelers used to get really high pay plus all the perks, but travel pay has come down significantly in recent years and a lot of those perks are no longer being offered except with decreased pay. So, it simply isn't true that travelers always make more than permanent staff, especially when you consider that staff receive certain benefits that fewer travel companies are offering nowadays---unless YOU are willing to pay for them.

No matter how you 'do the math', the agency is either going to pay for your housing and regard it as a business expense, or they are going to pay you the stipend if you find your own housing, in which case, you will either incur a tax liability (if you don't have a permanent tax home) or get it 'tax-free' to prevent duplication of taxation (if you do have a permanent tax home). Some people think they can get away with double-dipping, and they find creative ways to shift the money from one side to the other, so that their taxable wages are lower and the tax-free per diems are higher. I would advise caution and consultation with a tax expert about these schemes because the tax rules can get really complicated. If at the end of the year the IRS becomes suspicious that the 'tax-free' expense money you received isn't legitimate, there's a good chance that you will be audited.

Medic15251 · Jun 25, 2007

You lost me on that one! When you break it down, whether you have a tax home or not, the travel company is compensating you for your hours of work by either paying you a monetary amount (stipend) or providing you a furnished place to stay. Whether this is taxed or not, the company is trading compensation for you working for them.

Also just because a stipend is taxed doesn't mean you don't see some of the money. Assuming you are in a 25% federal tax bracket and 5% state that still leaves 70% of the stipend you would net.

consider that staff receive certain benefits that fewer travel companies are offering nowadays

What benefits are you speaking about? My company offers all the benefits that I received as a staff nurse plus some. You have a choice on what company you travel with. If you are not satisfied with the benefits I would suggest shopping around.

ERRNTraveler, RN · Jun 25, 2007

I agree with Medic. I do not have a tax home, so everything my company spends on my housing is considered taxable income. So, for example, if they spend $1000/mo on my housing, if that were taxed 25%, I would get an additional $250 taken out of my checks each month. That's still cheaper than me having to pay the $1000/mo. on housing. And, my benefits are just the same as when I was a regular staff nurse- health/dental/vision/life insurance is free with no deductibles & low co-pays, 401k, vacation time, etc. Plus I get reimbursed for travel & licensure expenses, free CEU's, etc. If a traveler isn't making more than a regular staff nurse at an assignment, they might want to consider switching companies...

caroladybelle, BSN, RN · Jun 27, 2007

As a note:

Housing is money that I do not see, or get to use as I see fit. It does not go in my pocket or get used to pay my bills. One could theoretically put me 5000/month housing including utilities and say that I am getting 5,000 dollars extra a month in benefits and make my yearly intake "look" 60,000 higher. But that does not increase the amount that I have in my pocket to be used for what "I" value.

Thus it is useless to me other than to "look" good on paper. I don't get to spend it or enjoy it.

It also does not change the fact that I still have a house expenses at my "real" home. And while utilities cost less when I am not there, it is not that much different.

I also have skills and experience that can have me earning over 50/hr in some sites with 75/85 for crunch time hours, if I were staff. With housing in that area - a stipend for 1,500 - 2,000 (probably much less) - trust me, I would make more as staff and have the tangible joy of living where I want, and being able to spend money as I see fit.

I could choose to set up my own housing on assignment and save a few bucks, but that tends to be a lot of trouble and a crapshoot at best.

Thus,while one can calculate all the numbers that one wants and it looks good, if it is not money in the pocket that I can actually use, it does me little good. And the money in my pocket is often higher as staff, due to skills and experience.

Medic15251 · Jun 27, 2007

Housing is money that I do not see, or get to use as I see fit. It does not go in my pocket or get used to pay my bills.

I assume you are talking about company provided housing rather than a stipend, as a stipend is money that you "see". Whether you "see" the money or not housing is still compensation provided by the travel company that has a monetary value.

I don't get to spend it or enjoy it. It also does not change the fact that I still have a house expenses at my "real" home.

You do use it though. You are trading time for compensation. Your "real" home is beside the point. You are the one choosing to maintain two homes.

And the money in my pocket is often higher as staff, due to skills and experience.

So you are saying travel companies don't pay you for skills or experience? That's strange, I would look into that. I would challenge you to call a few companies and ask if there is a difference in pay between oh say a med surge travel position and a cvicu travel position. I think you will find that travel companies do pay for specialties skills.

caroladybelle, BSN, RN · Jun 27, 2007

So you are saying travel companies don't pay you for skills or experience? That's strange, I would look into that. I would challenge you to call a few companies and ask if there is a difference in pay between oh say a med surge travel position and a cvicu travel position. I think you will find that travel companies do pay for specialties skills.

I am not ICU (though some places class my specialty as somewhere in between), and I have checked out most of the companies, excluding the strike staffers and the flyby nights.

I have been doing this long enough.

Let us just say, what you value and what I value are significantly different and leave at that. I would rather money in the pocket than "on paper".

Medic15251 · Jun 27, 2007

I am not ICU (though some places class my specialty as somewhere in between), and I have checked out most of the companies, excluding the strike staffers and the flyby nights.

But you would admit that as a general statement travel companies do pay more for specialties?

Let us just say, what you value and what I value are significantly different and leave at that. I would rather money in the pocket than "on paper".

Regardless of what I value, you can't exclude a compensation (housing) from a travel company just because you maintain two homes. That's your choice. The compensation is not just "on paper". It is tangible. You are living in it!

Comparing travel nursing and staff nursing compensation is like comparing apple and oranges. You have to change the oranges to apples by assigning a monetary value to them so they can more easily be compared.

NurseguyFL · Jun 27, 2007

But you would admit that as a general statement travel companies do pay more for specialties?
Regardless of what I value, you can't exclude a compensation (housing) from a travel company just because you maintain two homes. That's your choice. The compensation is not just "on paper". It is tangible. You are living in it!
Comparing travel nursing and staff nursing compensation is like comparing apple and oranges. You have to change the oranges to apples by assigning a monetary value to them so they can more easily be compared.

You are still not getting the point, but that's ok. Your choice. I used to believe as you now do, until I worked with two different tax experts, both of whom demonstrated clearly to me that housing money falls into one of two categories. It is either a deductible business expense, if a company pays it for an employee who is traveling away from home for work, or it is a reimbursable expense if a traveling employee pays it out of pocket. In either case, whether or not it is taxed depends on specific IRS guidelines, and, in either case, it is still an expense, not income. Some people mistakenly view it as income because they sometimes end up with a little extra in their pockets if they find their own housing and it turns out that that housing costs less than what it would have cost if it had been provided by the travel company, and also because the IRS currently does not have a mandatory requirement that the difference be accounted for when you do your 1040 at the end of the year (IF the reimbursement was taken from the travel company). If one opts not to be reimbursed by the travel company, and instead decides to deduct all travel-related expenses on their own when doing his/her 1040 at the end of the year, then all the claimed expenses would either have to be rationalized and proven with receipts or fall within the standard allowances permitted by the IRS. Going this route clearly would not allow you to end up with many or even any 'extras' in your pocket, which is the reason, depending on your case, some tax experts don't recommend that travel nurses do it that way.

If you choose to view housing and per diem costs as "income" and to believe that it makes no difference whether or not you are maintaining a permanent tax home elsewhere, just try recording that "income" on your 1040 next year without stating that you maintained a permanent tax home that is 'x' distance away from whereever you traveled to work. You're going to find that the IRS has a very different opinion about this than you do.

It would also be myopic to presume that you make more money than a person who is paying to maintain a permanent tax home elsewhere based only one the amount of money you get in your paycheck each week. The IRS allows a traveling homeowner to avoid duplicating living expenses when traveling away from home for work so, such a homeowner would receive more concessions overall. So, even though a non-homeowner may earn more $$$ each week, he/she would also pay more taxes. So, what you are thinking of as 'more' isn't necessarily so at the end of the day.

Medic15251 · Jun 27, 2007

You are still not getting the point, but that's ok.

Perhaps I could get your point if it was valid, however this is not the case!

If you choose to view housing and per diem costs as "income" and to believe that it makes no difference whether or not you are maintaining a permanent tax home elsewhere, just try recording that "income" on your 1040 next year without stating that you maintained a permanent tax home that is 'x' distance away from whereever you traveled to work.

I'm well aware of tax law regarding this matter, but you are over complicating the issue. Let me try to break it down on a simpler level so that you may understand. Consider the following example:

I am a traveler that does not maintain a permanent tax home. Additionally, I go on an assignment and opt for the company to arrange and provide housing for me while I am working that assignment. This is called compensation. It is also a benefit. They are providing housing for me on the condition that I go work for them 36 hours a week.

Let me ask you this question. Suppose you are the above traveler. If housing is truly an expense and not compensation as you contend, then you would be ok with the company eliminating your "expense" by not providing housing and not giving you a stipend of any kind?

I look forward to hearing your answer!