Travel nursing can pay very well, and much of the appeal comes from tax-free housing and meal stipends. But those stipends are only tax-free if you meet the rules. Get it wrong and you could owe back taxes, interest and penalties.
How a US travel nurse pay package works
- Taxable hourly rate: often lower than staff rates.
- Housing stipend: may be tax-free.
- Meals and incidentals stipend: may be tax-free.
- Travel reimbursement: may be tax-free.
Agencies often quote a big "weekly gross," but the taxable part may be small. That affects things like loan approvals, retirement contributions and disability insurance, which are often based on taxable wages.
The key concept: your tax home
In the US, stipends are generally tax-free only when you're away from your tax home and paying duplicate living expenses. The IRS looks at factors like:
- Do you keep a permanent residence you pay for (rent or mortgage) while you're away?
- Do you regularly work in the area of your tax home?
- Do you return there between assignments?
- Are your ties there, like your driver's licence, voter registration and car registration?
If you don't have a real tax home and are effectively always on the move, you may be considered an "itinerant" worker, and stipends become taxable income.
The one-year rule
An assignment expected to last more than one year in the same area generally isn't considered temporary. Stipends for it can become taxable. Be careful with repeated extensions in the same location.
Common mistakes
- Taking stipends while renting out your "home" and not paying for it yourself.
- Staying with family at home for free and calling it your tax home with no real expenses.
- Not keeping records of rent, mortgage and travel.
- Forgetting state taxes: you may owe tax in your home state and in each state you work.
What about travel nursing in Canada?
Canadian agency and travel nursing works differently. Housing and travel may be provided by the agency or employer, and whether benefits are taxable depends on the arrangement and the CRA's rules for employment benefits. Some contracts pay you as an incorporated or self-employed contractor, which comes with its own tax obligations, like CPP on both sides and GST/HST registration rules. Get advice from a Canadian accountant before signing an unusual contract.
Money tips for travelers
- Keep a separate folder for every assignment: contracts, pay stubs, receipts and housing costs.
- Save for taxes on any 1099 or contractor income.
- Keep a larger emergency fund for gaps between contracts.
- Keep investing for retirement, for example an IRA or solo 401(k) if you have self-employment income.
Comparing a travel offer with a staff job? Use the free Nurse Shift Pay Calculator to estimate staff pay with premiums and overtime, then compare after-tax totals.
This article is for general education and isn't tax advice. Travel nurse taxes are complex and depend on your facts; consult a tax professional who works with travel healthcare workers.