Financial Benefits of Travel

General Benefits

Please read/review our "What is a Tax Home?" page prior to reading this page; everything will make more sense!

 

Whether making more money is a motivating factor for becoming a traveler or not, most people would agree it's better to make more money for doing the same job, right? If you answered yes, then travel could be a good option for you! If you're wondering why travel jobs usually pay more there are plenty of factors: employers usually only post travel jobs if they're desperate, employers offer higher wages to attract travelers, etc. Travel jobs typically have a higher net gain than a typical job because a greater percentage of the pay is categorized as tax-exempt.

 

As discussed in the "What is a Tax Home?" page, a traveler's pay goes into two buckets: taxed and tax-exempt. The way to make the most money as a traveler is to maximize the money being allocated into tax-exempt categories. If that sounds frightening, don't worry! Your recruiter often deals with this but it is important to know some of the basics so you can make sure you're maximizing your pay. You can find examples of what may count as tax-exempt pay on our FAQs page.

Your taxable portion is an hourly rate that will vary based on your location, amount of money you're making, tax-free money you're able to receive, etc. You want this number to be as low as possible (because it's the only money that gets taxed so the higher this amount is, the less money you will be paid overall), but it generally won't go below $18/hour. (TravelTax or your recruiting company can give specifics).
 Eric has dealt with a wide range throughout his travel career with a low of $18/hour and a high of $48/hour. The rest of your pay will be coming from your tax-exempt bucket. Each company may offer a variety of different tax-exempt options, but all contracts should at least include housing and food stipends.​

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Other Factors

Other factors for pay/income should be considered in addition to just the net paycheck. We've listed some considerations here:

• with less taxable income, you are more likely to stay in a lower tax bracket although the above comparisons are calculated at the same tax percentage for ease of understanding

• cost of insurance (could be included with a permanent position, but is not included in the traveler's pay in this scenario)

• higher pay frequently offered with traveler positions in general to attract applicants​

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Financial Incentives to Travel

• paying off student loans

• investing

• saving more money now to provide more flexibility with picking a desirable job over a high-paying job

• take more time off between jobs, work part-time later on in your career

• saving for a house, car, etc.

• SO MANY MORE

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Contract Examples and Differences in Pay:

Gross Pay: total pay before taxes

Net Pay: total pay after taxes have been applied; this is the amount in the bank after you get a paycheck

 

Contract Example #1

Travel contracts are usually paid out weekly; below examples are examples of weekly pay. This example is taken from one of our actual pay stubs and contract offers with taxes at 18%; however, taxes will vary based on state/federal regulations. 

 

Travel Contract Offer: 

Hourly rate: $18/hour ($720 for a 40-hour week), meals and incidentals ($420/week), housing ($735/week), a one-time travel allowance of $400, and a licensure reimbursement of $95.

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In this scenario, $720-taxes = $590.66

$590.66 + the food stipend ($420)
 + the housing stipend ($735) = $1745.66 total weekly net pay, after taxes

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Same Offer, Fully Taxed:

Now to understand how you make more as a traveler, let's look at the same contract but fully taxed.

$720 + $420 +
$735 = $1875, before taxes (gross pay)

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This offer looks like more at first but when taxed at same rate
, net pay is $1875 × 0.82 =
$1538.18 total weekly take home after taxes.
 

The weekly difference between $1745.66 and $1538.18 can be highlighted further by calculating pay over 13 weeks, a typical contract length. The tax-exempt travel and licensure reimbursement are included in this total.

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13 Week Travel Contract: ($1745.66 x 13) + $400 (travel allowance) + $95 (licensure reimbursement) = $23,188.58

13 Week Fully Taxed Contract: $1538.18 x 13 = $19,996.34​

Difference? $3,192.24​

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Contract Example #2

Taxes calculated at 14%, based on our actual pay stub and contract offer.

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Travel Contract Offer: 

Hourly rate: $18/hour ($720 for a 40-hour week), meals and incidentals ($490/week), housing ($1,148/week), a one-time travel allowance of $931, and a licensure reimbursement of $168.

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In this scenario, $720-taxes = $617.72

$617.72 + the food stipend ($490) + the housing stipend ($1,148) = $2,255.72 total weekly net pay, after taxes


Same Offer, Fully Taxed:

Now to understand how you make more as a traveler, let's look at the same contract but fully taxed.

$720 + $490 + $1,148 = $2,358, before taxes (gross pay)

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This looks like more at first but when taxed at same rate, net pay is $2,358 × 0.86 = $2,027.88 total weekly take home pay, after taxes.


The weekly difference between $2,266.72 and $2,027.88 can be highlighted further by calculating pay over 13 weeks, a typical contract length. The tax-exempt travel and licensure reimbursement are included in this total.

 

13 Week Travel Contract: ($1745.66 x 13) + $931 (travel allowance) + $168 (licensure reimbursement) = $30,423.36 

13 Week Fully Taxed Contract: $2,027.88 x 13 = $26,362.44​

Difference? $4,060.92

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