If you’ve ever seen any of our job posts on social media, then you have seen the term “tax-free travel stipend.” But have you ever wondered what that actually was and/or entailed?
We’re here to break it down for you quick and easy:
Travel Stipend Break-Down
A travel stipend is tax-free and is not counted as part of your income when you file taxes. A travel stipend is usually advertised as one blended amount that consist of both a housing stipend, and a meals and expenditure stipend (M&IE). A travel stipend is designated money to pay for housing, transportation, meals, and any other extra expenses you acquire while traveling for your new assignment.
Here is an example of what a pay package (with a travel stipend) looks like from our partner Wanderly.us
Why are some travel stipends higher and others lower?
There are a couple factors involved in this. Next Move offers its travel nurses the highest IRS allowable travel stipend available. However, you’ll notice travel stipends change based on location because every state has their own limits on the amount of tax-free money travel nurses can receive. In addition, rates vary state to state because of the variances in cost of living.
Take rent for example. The average rent for a one-bedroom apartment in San Francisco is $2,639 per month, while the average rent for a one-bedroom apartment in Oklahoma City is $761 per month.
Another factor is time of year – in some areas, stipends will be higher in summer versus winter.
Who decides these rates? The General Services Administration (GSA) determines the per diem reimbursable travel rates for federal employees. Per diem is just latin for “per day”. While per diem rates do only apply to federal employees, and not travel nurses, the IRS does apply these same rates to private-sector employees as well – aka – travel nurses.
Because per diem is designed for short term travel (eg: staying in a $150 a night hotel room for a week) and stipends are designed for longer term travel (aka: staying in a $40 a night Airbnb for a couple months) stipend rates are lower than per diem rates. Most per diem employees will be traveling for less than 30 days and travel nurses typically travel for 8 to 13-weeks.
Rules to Qualify for a Travel Stipend You must live 50 to 100 miles away from the location of an assignment to receive stipends.
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