Per diem rates according to GSA.gov

[maggiengrace]

A fellow traveller told me that the rates for per diem (housing allowance, stipend, however you refer to it) are based on geography and that the tables on the website GSA.gov specify how much per week. I went there and the per diem that I was offered was nowhere near what was listed. Any comments/experiences? Are others getting per diems in line with these tables? I'm wondering if they are just guidelines and it is up to the company how much they offer / up to the traveller to negotiate this. But if the company is offering me only 41% of the standard rates should I not feel taken advantage of? Should I 'demand' the standard per diem? Should I decide that this company is not fair/up front and go elsewhere? Thanks.

[Double-Helix, BSN, RN]

Travel Nursing Tax Advantage Plan

I think you will find this link helpful. In short, not all employees are offered the maximum per diem rates that the GSA sets, nor is your company obligated to give you the maximum rate. You can always try to negotiate your rate, but if your current offer is 41% of the max listed on the GSA site, I would not "demand" that max per diem. There are several ways that expenses like housing and food can be worked into your pay- including a higher hourly rate.

Since you are new to travel nursing, the best thing to do is sit down with your company and ask how the per diems are calculated. They may be using much more recent economical data than the GSA site, which isn't always updated frequently. Seek more information- from the source- about your per diem reimbursement before you make a decision like leaving the company.

[NedRN]

Remember the basic structure of travel nursing? The hospital pays an all inclusive bill rate and the agency must pay all compensation of any sort from that hourly bill rate. So if you want more taxable hourly, your housing stipend (for example) must go down in direct proportion.

Ashley is completely correct, the agency doesn't have to pay the maximum per diem, nor indeed any per diem at all. Here is a bit of business tax information for you: most agency expenses are deducted (sometimes called "written off") dollar for dollar against revenue. That includes just about anything you can think of, from your pay and benefits, to your housing. Except for per diems. They occupy an unusual bit of tax law and are subject to discounting by 50% before deduction. So they are 50% taxable to your agency (not to you). As a result, no agency maxes out the per diem, because the math just doesn't work out. That they pay any at all in recent years is the result of some IRS pushing to require per diems to be paid at a ratio of 60/40 housing/per diems. If agencies paid it all in housing, the IRS would not receive any tax money at all from the transaction.

There are a lot of interesting twists on this, but one I will mention here is that you can document your time away from home and deduct the difference between the agency supplied per diem (called M&IE or meals and incidentals in IRS lingo), and the rate provided on the GSA site (you will actually find a more favorable method and amount in IRS Publication 1542). I would recommend consulting and expert such as TravelTax to do this. For most travelers, deducting per diems is not worth it. You have to itemize already to even think about it, and then you have to meet thresholds to deduct (losing completely the threshold amount). In addition, you also have to subtract 50% first. If memory serves, it is Form 2106 you have to file before transferring the final amount to your 1040, and Form 2106 has you perform the 50% calculation right on it. So you can look at the form to see how it might play out at tax time with this strategy.