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What Happens If You Cancel Your Contract?

Specialties Travel

Published Apr 11, 2007

NurseJacqui

Has anyone ever cancelled a contract? If so, what were the consequences?

• + Add a Comment

bagladyrn, RN

2,286 Posts

You need to read over your contract. The penalties for terminating your contract early will be in there. Count on being required to pay back at least the cost of your housing for the remainder of the time it is contracted. There may be other penalties as well.

In rare cases, if you have made a good faith effort with your company to work out whatever problems have made you want to terminate and you or your license are truly at risk (not just an unpleasant situation) then the company may waive any penalties.

My contract is like a page and it does not address contract cancellation. I do not take the housing...just the stipend. I want to leave because I am working in a dangerous, abusive miserable enviroment with less than competent nurses and doctors. I fear for my license whenever I am there. I only have 5 weeks left on my contract...I have voiced my concerns to agency over and over again...and they havent really said anything. Does just the agency receive a penalty or will I too? Like I said there is NOTHING in my contract about cancellation.

Check your contract and see if there is a line in it about abiding by the rules in the employee handbook or something to that effect. You should have received it in the packet when you started your assignment.

If you truly feel that you or your license are endangered, it would be a good idea to approach your recruiter about the idea of terminating your contract. You can call and say "As you know I've been informing you of serious issues at this contract and my efforts to resolve them. I don't feel that I can safely continue in this contract. What would be the penalties if I gave my notice and is the agency willing to work with me on paying it off?"

You should, however be prepared to leave your housing within 48 hours of terminating the contract.

I dont take the housing.....I did ask what the penalties were and I was never answered. I am actually leaving this agency because they seema little shady to me anyway. I only have a month left. I guess I will try and stick it out. But its pretty bad.

jamminworld

I had to leave a contract because of unsafe conditions. I simply spoke to my recuiter and voiced my concerns. She attempted to correct the problem with a rep from the hospital but it was unsuccessful. I actually ended up telling her if I lost my license then it would not be good for either of us because we would both lose a source of income. I had to speak to 2 other people but I left my contract without issues. The company backed me 100% and I was not penalized. This is probably not the norm though.

I took my 1st Travel assignment @ a week ago and I knew within a few days that I felt like I was putting my nursing License on the line as well as my patients safety on the line and I just wanted out of the contract. My recruiter said it would not look well with the company and I would probably not be working with them anymore. I was OK with that since I knew I just wanted out of the contract, and this was only an interim job for me and not a long term job. My recruiter also made the comment/innuendo that this would probably affect my future employment in the area and that I would be "burning bridges" in the area- as he put it. The area where my assignment was is not too far from home and my question is whether this was just a SCARE tactic that he was using, or whether this would affect my future nursing employment in the area-outside of travel nursing of course, because I will never do that again.

Any input would be greatly appreciated.

GleeGum, BSN, RN

I would not let a recruiter or agency's use of scare tactics affect you doing the right thing. i know it can be intimidating and hope it works out well for you.

flnursemichelle

If you are breaking your contract for things that you could be held responsible for, patient care or if you feel your license is in jepoardy, try calling a clinical liason from your company. I had a major problem with my first assignment and I couldn't get the hospital to answer any of my questions. I finally called the agency's Liason, she was a nurse who knew how things should have worked and she listened to my side and then listened to their side and basically she said that because I wasn't a "hospital" employee, they were not willing to listen to my side of the story and they canceled my contract. It took them 2 weeks for them to tell me this. I found out that my contract was canceled on friday (I was on the schedule on friday, saturday, sunday) and they told me so I called my clinical Liason, she said that she would close it out for me and did all that stuff but I was also offered another job within the hour and 3 more by the end of the day. I had wanted to go to a certain state but didn't get offers from any of the states I tried to get to. I did get a good spot, 13 weeks and it has worked out well so far.... I wish you luck with trying to find a next assignment. You will decide the best route to go for your self, just trust your instincts!!

I was only on my travel assignment for @ 5 days then I cancelled the contract because I felt it was unsafe for my license and patient's safety. When looking for future employment, I do not include this job in my resume. My question is this-when future employers do a background check on me-will a job this short come up on me. How do I approach this-do I bring it up in future interviews? Do I list it on my resume? Any input on this would be greatly appreciated.

fawnsternurse

I really dont know if things like this come up on a background check or not and it would be interesting to know, but just for the record and adding my two cents:

Life is too short and we worked too hard for our licenses to subject our licenses or ourselves to miserable, abusive conditions.

There is way too much lateral violence in nursing and especially in the travel nursing industry many times they dont want Nurses but rather cattle.

I think NOTHING of walking away from a situation where I am being abused, where I am asked to commit fraudulent documentation or where an outright lie has been told about me. This has all happened.

I just quit my contract with 7 weeks left on it...I was miserable and my son was at home not with me on assignment and he was starting to rebel agaist his uncle...who he was at home with...I was getting floated everyday and sometimes twice a day...I just hated it and I couldn't take it anymore...so we'll see what the say but it doesn't matter...I'm not going back!!

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Breaking a Travel Nurse Contract: Here’s What You Should Know

• Looking to break your travel nurse contract? We get it. Life happens.
• There are many things you can do to ensure that you have broken your contract on the best possible terms.
• Let’s dive in!

Morgan Curry, BSN / RN

Intensive Care, Outpatient Surgery, Aesthetics, Education, and Nursing Leadership

Did the thought, ‘ I can do anything for eight weeks for that kind of money,’ arise when you signed a travel nurse contract?  

Perhaps you wanted to explore the world, see new sights, and learn about a different culture.  

The opportunity to do what you love while also being able to travel every two months, and being paid for it sounds like an unbeatable deal, right?  

Unfortunately, that is not always the case.  

Maybe what you thought was a great idea in theory, is now not turning out well. You’re faced with long hours, bad assignments, and you are constantly being treated poorly by your new colleagues.  

Now, the question is, ‘ how do I break my travel nurse contract?’  

So now the question that remains is, ‘how do I break my travel nurse contract?’ We’ve got the answers you’re looking for!  

I n a 2020 study , there was a 13.7% increase in the likelihood of a travel nurse contract being terminated or cancelled by the facility or staffing agency.  

First Off, You’re Not Alone 

With the highs and lows of the past two years in healthcare, contract cancellations and terminations are on a constant rise and they are all over the place. 

In a 2020 study , there was a 13.7% increase in the likelihood of a travel nurse contract being terminated or cancelled by the facility or staffing agency.  

Following, the same study reports that roughly 28% of travel nurse contract cancellations were from nurses backing out of their current or upcoming assignment; over half of these nurses claimed it was due to personal reasons.   However, 23% claimed it was for safety concerns.

The Risks of Terminating Your Travel Nurse Contract

Whether your contract is with an agency or a hospital, there are several factors that will be negatively impacted based on your decision to break your legal agreement.   

In sum, it is a snowball effect.   

Travel nursing community, The Gypsy Nurse , highlights several factors you should consider before you decide to terminate your travel nurse contract. Check them out:  

Patient Care and Current Staffing 

Facilities that need healthcare providers will typically begin a partnership with a staffing agency in order to have ‘more hands-on deck.’  

If you break your agreement, this puts one less person on the schedule; and in nursing, this can make a huge difference in patient care delivery.  

The Staffing Agency

A cancellation can cost an agency thousands of dollars.  

From housing arrangements to penalties from the facility they are contracted with, this is an expense most firms want to avoid at all costs.

On top of this, breaking your travel nurse contract can diminish the agency’s reputation with the healthcare facility, as it means one less nurse is going to be available in an area where they are needed. 

Although you have a contract with the agency, the agency also has set agreements with the facility as well. 

To avoid getting blacklisted by both the facility and your agency – express your concerns to your recruiter, or if necessary, funnel your concerns through the chain of command if you feel that the individual facility is taking advantage of you.   

Your Career

Much like any other job, leaving without proper notice or breaking an already-signed agreement can be detrimental to your career.   

Whether it is with the staffing agency or healthcare facility, your chances of being able to work with them in the future are quite low if you do not provide proper notice.   

Here’s What You Can Do

If you are beginning to have second thoughts about your upcoming nursing assignment , the best thing you can do is communicate with your agency recruiter.  

There are several measures you can take to ensure that you break your travel nurse contract on the best possible terms, with the highest chance of not facing career-damaging repercussions that include:

• Read your contract.  
• Express your concerns to your recruiter and discuss your next best action.  
• Be communicative.  
• Put in the proper notice, if possible.   
• Work every shift that you’ve committed to, if possible.     

Quitting or breaking your contract solely for an opportunity to make more money is never okay.  

However, what you can do is ask your recruiter for more money at any time, especially if you feel as if a traveler at the same location is bringing in more than you are.   

Ultimately, be responsible in your decisions, and weigh your options before breaking your contract.   

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What to Do if Your Travel Nurse Contract is Cancelled by the Healthcare Facility

Table of Contents

You are all set for your next travel nurse assignment: bags are packed, plane tickets booked, housing secured, you’ve learned the new emr system, and have your new nursing license in hand, and bam your recruiter calls you to tell you that the hospital has canceled your contract. Now, what do you do? 

Although contract cancellations are rare, they can happen when you least expect it; before your contract begins, or during a contract term or an extension, with virtually no warning. In most cases it's not a personal attack on the nurse, it's just the healthcare facility trying to save money. Having a travel nurse recruiter on your side to help navigate the situation can be a lifesaver if your travel nurse contract is unexpectedly canceled. 

Continue reading to find out what to do if your travel nurse contract is canceled and how to protect yourself. 

On what Grounds Are Travel Nurse Contracts Terminated?

Travel nurse contracts can be terminated for many reasons and both the nurse and travel nurse agency may be at risk. 

Sometimes a healthcare facility will terminate a travel nurse’s contract unexpectedly. This can occur for various reasons; census can drop leading to an unpredictably-low census, overstaffing, budget concerns, or if the hospital mistakenly hired you when your skill set doesn’t match the unit you were hired for.  

Contracts can also be canceled while a nurse is on assignment due to poor performance or behavior. Possible reasons may include insufficient knowledge of the specialty, staff complaints, attendance issues, or concerns for patient safety. 

Travel nurses also have the right to terminate a contract. However, it is recommended that you avoid canceling as much as possible. Of course there are legitimate reasons travel nurses cancel , especially for family emergencies, unsafe hospital practices that could put your license at risk, or breach of contracts where you are working different shifts than previously discussed. 

Consult your contract before making a decision, many times there are financial penalties if a travel nurse cancels. Some facilities may include a 2-4 week notice provision, where you can cancel your contract without any penalties. Other facilities may charge the staffing agency a fee if you cancel, in turn, you may be responsible for those fees. You may also be responsible for paying your housing and traveling fees if you cancel your contract mid-assignment.

Terminating a contract can affect your relationship with both the facility and staffing agency. It can also affect your chance of obtaining employment or other travel nursing contracts later on. Try not to take the decision to cancel a contract lightly.

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How Do I Avoid Travel Nurse Contract Cancellation?

While you can’t completely avoid having your travel nurse contract canceled, there are a few things you can do to try to prevent it from happening. Follow these tips on how to try to prevent contract cancellations. 

Work with a travel nurse company that you trust

Choose a reputable company that has strong relationships with healthcare systems and knows how to place you in contracts that are less likely to be canceled. Find out your agency's track record. Ask how long they have retained their current contracts and how frequently nurses get canceled. Even though a travel nurse agency can’t always guarantee your contract will be honored, you want to know that you can trust them and that they will have your back. We are an award winning agency voted on by your peers who will help you land your ideal job faster than any other agency.

Do your research

Ask fellow travelers in travel nursing groups if they have had any experience with being canceled with that healthcare system before. You can’t always predict cancellation, but knowing that there are red flags is helpful. 

Keep your credentials current

All hospitals have requirements that nurses must keep up with. Utilize your nurse recruiter to help you stay on top of due dates and expiration dates. Keeping your credentials current will add an extra layer of protection against contract cancellation. You can keep track of all your credentials in one place in On Demand !

Strong communication

Remain in contact with your travel nurse recruiter leading up to your assignment before securing housing and travel plans, you don’t want to incur avoidable travel expenses if your travel contract is in jeopardy. Communicating with your recruiter about any issues when you are on assignment is always helpful to resolve small issues before they become bigger ones. 

Show up for your assigned shifts

Make sure you show up on time for your scheduled shifts and try to have as few unexcused absences as possible. Anyone can get sick, especially with all you are exposed to in the hospital, but making a habit of calling out can lead to the early termination of your travel nurse contract. 

Review your contract 

Review your travel nurse assignment contract prior to signing it. Ask your recruiter to help explain anything that you don’t understand. If your contract is canceled you could possibly incur out-of-pocket expenses to travel back home or expenses for terminating your lease. You will want to make sure that you are prepared for any situation.

What Should I Do If My Contract is Canceled?

In the unfortunate event your contract is canceled, try not to panic.

Reach out to your recruiter (if they haven’t already contacted you) to discuss your next steps. Your recruiter should gather information about any available jobs near your current location and see if there are any immediate needs. If there is something available, it will make the transition much easier by eliminating the need to relocate or find new housing. This may be the most cost-effective option if you have already incurred travel expenses like flights and housing rather than jetting off to another state. We will help you land your job faster when you travel with us. Get submitted quickly to top travel nurse jobs and be first in line for an interview. Find your next travel nurse job today.

Some facilities may even offer you an alternative unit to work on instead of complete cancellation. Ask your recruiter to advocate for you.

Check the cancellation clause on your contract

All contracts have a cancellation policy and your responsibility for fees depends on the agency, your contract, and the cause of cancellation. Most contracts are designed to protect the agency, agencies must be able to bill healthcare facilities for hours of work to cover expenses. Most travel nurse contracts are at-will-employment, have your recruiter review the terms of your contract to help you understand what you are signing before your next assignment.

Hospitals must typically pay a penalty fee to the agency for any fees that may have been incurred while setting up for the assignment. This usually leaves you off the hook. However, this is dependent upon how your contract was structured. You may have to pay if you decide to arrange for your own housing instead of using the agencies provided housing. You could also be responsible for any fees required to break your lease. 

Oftentimes your contract will contain a clause that states the traveler is responsible for reimbursing the agency for expenses incurred as a result of a contract being canceled for “good cause.” This is often reserved for willful disregard for duty or performance issues. Make sure you review this part of the contract with your recruiter so you understand exactly which kind of fees you may be dealing with. 

Be financially prepared

Having your travel nurse contract canceled can put you in a financial bind. Unfortunately, there is no safety net for travel nurses. Travelers aren’t not entitled to paid time off. Try to always have enough money saved up (ideally at least 3 months) in case of emergency, unexpected travel expenses, or canceled contracts so that you aren’t in a panic and can live comfortably until your next assignment. 

Always have your documentation available

Nothing is more frustrating than trying to obtain a new contract and having your travel nurse agency ask for licensing and credentials, but your documents are locked in a cabinet a thousand miles away from home. Keep all of your documents in a secure folder online so that you can access them even while you are away. Manage all your documents in On Demand .

Maintain relationships

While it’s usually not necessary to work with multiple recruiters, maintaining relationships can help you in a bind should your current recruiter not be able to help you. You also want to keep things civil if you decide to leave a contract for any reason. Healthcare facilities and travel nurse agencies talk amongst each other and you don’t want to get a bad reputation for canceling or end up blacklisted from an agency or facility. 

If you’ve exhausted all means in the location of your original contract and are coming up short, maybe it’s time to take that assignment that's next on your travel nursing destination bucket list. Work with your recruiter to see what else is available to you. Get submitted to the top local and national travel nurse jobs faster when you travel with us.  

Take a break 

Maybe you need to take this time to rest and recharge. Utilize this unexpected break to return home and visit with friends and family until you can get organized and find your next assignment. 

Flexibility is essential when it comes to travel nursing. If your travel nursing contract is canceled don’t despair. Canceled contracts can be frustrating and disappointing, especially after lining up housing and travel plans. However, there are many travel assignments available and you will be able to find another one easily. Speak with our trusted recruiters at HCTN to learn how we can help secure your next travel assignment. 

Can I cancel my travel contract if I have a family emergency? 

Family emergencies may happen and that is ok. Most hospitals and travel nurse agencies will be understanding and accommodating in emergency situations. The best thing you can do is communicate your needs and try to come to an agreement about whether you should terminate the contract early or if you will be able to return once things are taken care of. 

Lauren Rivera is a nationally certified neonatal intensive care nurse with over 15 years of experience. She serves as a nurse expert offering support and educational classes for women from preconception through childhood. Lauren is also a freelance health and wellness writer with works published on several nursing sites. She develops and curates content for various healthcare companies, and writes continuing education modules for other healthcare professionals.

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What To Do If Your Travel Nursing Contract Gets Canceled

August 3, 2023

Megan Bebout

There’s nothing like the rush that takes over your body when your travel nurse recruiter tells you they’ve found you a job. The scary version of that? The pit in your stomach if you ever find out your travel contract's been canceled. Whether your travel nurse contract was canceled on you or you’re the one doing the canceling, this is what you need to know.

Why do travel nursing contract cancellations happen?

How to get out of a travel nursing contract (the right way), how to lessen the impact of a travel nurse contract cancellation.

• ✨ BONUS ✨ Frequently asked questions (FAQs)

Let’s be real — it sucks when your travel contract gets canceled. But unfortunately, travel nurse contract cancellations happen. And there's no one answer, there could be plenty of reasons why.

Ever heard of “at-will employment”? Hospitals and other medical facilities can cancel travel nurses and allied travelers “at-will,” meaning your contract could be canceled at any time for any reason by the healthcare facility, with no recompenses for you. For example, a common reason for contract cancellations is abrupt census changes, where a hospital goes from being "understaffed" to "overstaffed" to "no longer requiring your impressive skills."

On the other hand, maybe you’re the one interested in canceling a travel nurse contract. If so, watch out. If you aren't careful, you could earn a spot on the travel nurse blacklist. And if you’re blacklisted from working at hospitals or other medical facilities, it could negatively affect your career as a successful travel nurse. And we don’t want that.

What if something changed for you right before you were about to start your next travel nurse assignment? Maybe there was a family emergency, or you were diagnosed with a major illness, or you won the lottery — whatever the reason, you have to cancel your travel nurse contract early.

Here’s how you do it the right way.

Communicate with your travel nursing recruiter

It can be tough to talk about something like this. But your travel nursing recruiter has your back, even if you’re quitting a travel assignment. (Although it's best if you can find another option!) The important thing is that you communicate your needs and give notice of your travel nurse contract cancellation.

By communicating and providing notice to your recruiter and travel nursing agency, you give them time to notify the hospital or healthcare facility and potentially find a replacement. On top of that, your nursing recruiter can give you valuable advice and refer you to other travel assignments that may align more with what you want.

So, if you want to cancel contracts, first call your staffing agency recruiter. Having this conversation will allow you to maintain a positive relationship with your nursing recruiter and ensure that your contract cancellation is as smooth as possible.

Be honest about why you’re ending your contract early

When you call your nursing recruiter to tell them you want to cancel your contract, make sure you’re honest about why. If it’s a personal reason you’d rather not disclose, feel free to say just that!

Just know that you are valid for considering the ethics and safety concerns of the job. You should never be put in a situation where you feel like you have to compromise your career as a medical professional in the health system.

Being open and transparent about why you’re unhappy at your travel nurse job not only helps you preserve the recruiter relationship but also gives them the chance to brainstorm ways to come to a mutually beneficial solution. That way, all parties involved win.

Don’t ghost on your travel nurse assignment

You’ve heard of ghosting in terms of dating, but did you know that ghosting applies to the professional world, too? Pro tip: ghosting is the worst thing you can do as a traveler.

According to healthy psychology professor Dr. Wendy Walsh, there are different levels of ghosting that can happen: lightweight, midweight, and heavyweight. Lightweight ghosting is a slight maneuver that makes a point of power. For example, you and your friend got into a fight, and they didn’t text you back.

Midweight ghosting is when you’ve been around or talked with someone a handful of times and then you avoid them. This could happen when you’ve been on a few dates with someone, realize they’re not the one for you, and never talk to them again.

Lastly, heavyweight ghosting is when you’ve developed a deep connection with someone and then ignore them without explanation. Imagine being in a long-term long-distance relationship and then one day your partner just stops talking to you.

Ghosting extends to the professional world and has become a surprisingly common employment trend throughout the years. Midweight ghosting seems to be the most popular kind of ghosting when it comes to travel nursing. Many times, travel nurses apply for a new travel nurse assignment, then never speak to their recruiter, skip a job interview with a medical facility, or worst-case scenario, don’t show up for their first day at their travel job.

Ghosting in your personal life is one thing, but ghosting on a job is another. In addition to being highly frowned upon, ghosting with virtually no warning on your travel assignment can cause serious damage to your nursing career and reputation. Even worse, you could earn a spot on the travel nurse blacklist, which may prevent you from being considered for future employment opportunities with other healthcare professionals and facilities, staffing agencies, and other future employers.

Don’t jeopardize your professional reputation. Instead, simply communicate with your recruiter and let them know what’s going on.

So, you just got word from your nursing recruiter that your travel contract has been canceled. Now what are you supposed to do?

Our best advice is to adapt to the situation. As you know, flexibility is the key to a successful travel nursing career. Dust yourself off, pick yourself up, and prepare to find another travel job. Luckily, your recruiter will work with you to quickly get you placed with a new nursing contract.

Regardless of how your contracts get canceled, depending on the terms and conditions of your contract, you could have some unexpected travel expenses on your hands. To be sure, consult your travel nurse contract to see what the cancellation clause says. In some cases, you could be responsible for fees incurred for housing, travel, certification, and nursing license. If you’re unsure, reach out to your rockstar recruiter for a helping hand.

Unfortunately, there’s always a possibility that your contract could get canceled. That’s why it’s so important to fully read your contract before signing so you know what to expect if it happens to you. Fortunately, there are precautions you can take to lessen the impact of a contract cancellation. Here’s what you can do to make a contract cancellation a little easier on yourself.

Maintain a savings account

Having a savings account to fall back on can really save you when something unexpected happens, like a canceled travel contract. Losing a job can have serious repercussions on your bank account.

For instance, maybe you paid a huge sum upfront for your own housing arrangements and now you’re unable to get it all back, or perhaps you have plane tickets that now need to be changed — needless to say, your bank account can take a hit when you’re without a travel nurse assignment. To help make it easier to cover expenses, save money to build up your savings account, and continue to add to it as much as you can.

Work with a travel nursing agency and recruiter you trust

Life is less stressful when you know you're covered. And when you travel with Fusion Medical Staffing, you know that’s always the case. Working with a travel nurse company and a recruiter whom you can trust, who are easily accessible, and who have your best interests at heart can make the experience of contract cancellation or quitting a travel assignment less dramatic.

Imagine if your travel contract got canceled and your recruiter was hard to reach or completely unreachable. Or what if you want to cancel and your recruiter takes forever and a day to reply to your burning questions? Neither is a great scenario. Instead, recognize those red flags, dodge those bullets, and make sure you work with people you trust to take care of you.

Related: What Healthcare Travelers Love About Fusion Medical Staffing Recruiters

Lean on your support group

Life is tough, whether you’re a travel nurse or an allied health traveler. And when you’re in the downward swing on the rollercoaster of life, maybe because your contract was canceled or wasn’t what you expected, then lean on your support system to bring you back up.

Your support system may be a  spouse or romantic partner , a parent or other family member , a BFF, or a group of fellow healthcare professionals. No matter who that is, reach out to your people and ask for their help to get through this tough time. You’d be amazed at the difference your support system can make.

Frequently asked questions

What happens if you break a nursing contract at fusion medical staffing.

So, what happens if you cancel a contract with Fusion Medical Staffing? Whenever an assignment ends for any reason prior to a contracted end date, there's an internal review process to determine your employment eligibility. During this review, Fusion Medical Staffing asks that you provide a detailed statement of events and gather information from the recruiter and client manager regarding the reason for the assignment ending. Depending on the situation, the Fusion Medical Staffing review board may also request a statement from healthcare facilities. The board then uses all the information to determine the next best move.

I hate my travel nurse assignment. What do I do?

It’s never fun to work a less-than-ideal travel contract , but it can happen. The good news is if you find yourself in that position, there are steps you can take to make it more bearable.

The most crucial thing you can do if you hate your travel nursing assignment is talk to your recruiter. While they may not be able to solve all the problems you’re facing, they might be able to work with the facility to make it more bearable for you while you’re there.

Alternatively, as a Fusion Medical Staffing travel nurse, the clinical team is on your side . Made up of a group of nurses, this team knows first-hand the struggles you may face while on an assignment and can provide a listening ear, advice, or problem-solving techniques. Every travel assignment you work on may not be a winner, but you don’t have to go through it alone.

Can you cancel a travel nurse contract before it starts?

Yes! If a travel nurse cancels a contract before it starts, the exact details on how to do this will depend on the particular details of your cancellation clause, and all travel nursing contracts are different. Generally, you’ll need to provide written notice to your travel nurse agency and recruiter and in some cases, may have to pay a fee. To avoid contract cancellations, thoroughly review your travel contract before signing.

If you find yourself in a position where your services have been canceled or you need to break your travel nurse contract, make sure you communicate your needs and intentions to your staffing agency and nursing recruiter, and don’t be afraid to be honest. Life happens — we're here to help you find the best fit.

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How to get out of a nursing contract? (the right way)

Travel nursing, breaking a travel nurse contract.

At some point during your career as a travel nurse you may find yourself in a situation where you want to cancel an assignment. If you find yourself in that situation asking yourself, “how do I get out of my nursing contract?” it may feel daunting. First and foremost, your well-being is most important. The travel nursing agency you’re working with should support you in your decision if your well-being is in jeopardy. Below we will outline in detail all the consequences and the process for cancelling a nursing contract.

Can I keep a good rep with my company if I break a contract?

Canceling a contract is never something we encourage. However, there are things that are beyond our control that might require such a drastic move. If done properly, you can minimize any costs and negative outcomes from breaking a travel nursing contract.

The first thing to ask yourself is, “What does the contract say?” A travel contract should specifically address what happens in the event of a cancellation by either you or the facility. If your contract does not cover this situation, then you might also check any service agreements you signed with your travel nursing agency. Many agencies, for example, will have you sign a service agreement that covers the professional conduct travelers are required to maintain while on assignment. These types of agreements can also cover what happens in the event of a cancellation by the facility and/or the traveler. Agreements like this are usually signed on a yearly basis and cover  all assignments a traveler might work during the year.

After you read what your contract states (or perhaps what it DOES NOT state in some cases) , you should call your recruiter. Be up front with them and tell them the reason behind wanting to dissolve your contract. Being a healthcare professional, you agreed to a contract and should have a good reason for wanting to sever it.

When contracts are dissolved is often the time where you will find out how good your travel company might be. If you are met with threats or bullying, then at least you will know that your next assignment should be with a different company. But, you might also find a company that is willing to work with you to minimize the damage and provide you with other travel opportunities in the future.

If you intend on traveling again once the situation is resolved, let them know that. It might even be possible for you to just take off a few weeks and then return to your assignment when you are able. The point is, don’t just call your recruiter and say, “I need to break my contract”. Explain yourself and work with your recruiter to find a solution that will make you and your company happy.

Open communication is key whenever you find you must modify an assignment contract.

Consequences of Cancelling a Contract

Depending on the terms of your contract there may be repercussions that fall on you, your recruiter, or the agency you’re working with. If your agency provided housing it could be in jeopardy, and you may be required to pay the remainder of the lease. If you secured your own housing, you will have to navigate that situation on your own.

Canceling contracts can also affect future contracts. It may be difficult to get good references. You may have to face tough questions during future interviews. Depending on the circumstances your agency might have your back, or you might not be invited back to work with them again. Travel nursing agencies thrive on having good relationships with facilities and travelers. If the facility is in the wrong, your agency should side with you. However, if you’re in the wrong, you may find that your agency will decline working with you on future contracts.

Who Can Cancel A Contract?

Both facilities and travelers can cancel contracts. No two situations are the same so it’s difficult to present hypothetical scenarios for each possible situation. However, hospitals may cancel contracts for several reasons. Mistakes in seasonal demand forecasts could cause an overstaffing problem. EMR conversion contracts can sometimes get cancelled for a number of reasons. One of the most common reasons for hospitals canceling contracts is due to poor nurse performance. This is definitely not great for the traveler and a situation you should try to avoid.

If you find yourself in a situation where you have personal health problems, a family emergency, poor work environment, or another valid reason for cancelling your contract you can do that.

Protect Yourself From Contract Cancellation

Be prepared for the possibility. Having a contingency plan will help you financially and mentally. Focus on flexibility by packing light and thinking ahead about what you will do if your contract get’s cancelled.

Perform a risk assessment for the facility, location, and your skill set & experience. Evaluate all elements of the situation so you know whether or not you’re likely to get canceled. Once you’re on assignment pay attention to how much time and energy the facility invests in your orientation. If they care about you being a good fit, that’s a good sign.

Recommended Reads

Do travel nurses get free housing, where do travel nurses find housing, best travel nurse agency: finding your perfect fit.

What Happens If My Contract Falls Through?

When you travel, *stuff (ahem) happens. 

Small annoyances like a delayed suitcase, a flat tire or a road trip partner who sings off-key are a given. And of course, there are big things, too. It’s even possible your healthcare facility may be forced to cancel your travel nurse contract. 

But, never fear — Aya’s here! (Just imagine us, big orange lotuses emblazoned on spandex. And capes. There must be capes.) 

1. We do our best to stop cancellations before they happen.

2. We have more jobs — and more exclusive opportunities — than any other agency.

3. We’re by your side, always there to solve any setbacks.

Why Are Travel Nurse Contracts Canceled ?

There are many reasons a travel nurse contract may be canceled. (Most contracts are at-will employments — your recruiter should be able to walk you through the particulars of each contract so you’re clear on the terms.)

Occasionally, census can drop quickly and hospitals may find themselves overstaffed. Or a hospital might mistakenly hire people with a skill set that isn’t a match for that specific unit. At Aya, we protect against this. We have deep knowledge of the units we staff, and our clinical matching process has resulted in an industry-low clinical cancellation rate.

How Do I Avoid Travel Nurse Contract Cancellation?  

Choosing a travel nursing agency that knows how to place you in the right position is the best way to avoid cancellation. 

Keeping your credentials current is also important. Every hospital has requirements that travelers must keep up with. We have expert credentialing team members to help you stay organized, remind you about due dates/expiration dates and assist you with obtaining credentials.

Strong communication is also key. It’s imperative that you consistently speak with your recruiter leading up to your assignment and while you’re on contract. Don’t hesitate to bring up any concerns or issues you encounter. This allows your recruiter to solve small issues before they become big issues — and they can tag in other members of your support team who can lend an expert hand.  

What Should I Do If My Contract is Canceled?  

Our advice? Be willing to adapt. Flexibility is key when it comes to travel nursing.

Some facilities will offer you an alternative to cancellation. For example, they may allow you to float to a different unit. 

But if a cancellation happens, don’t despair. We’ll be able to find you another   travel nursing assignment. We have more open jobs than any company in the industry. We also have more exclusive jobs, where the hospital works directly with Aya. These relationships mean that not only will we be able to find you a good fit to replace a canceled contract, but we’ll do it quickly.

Take it from Megan and Kayla, who were less than a week away from moving for their next travel nurse assignment and had already packed up and signed a lease when disaster — nearly — struck. Their PICU nurse contract in Dallas was canceled while they were on vacation in Hawaii. 

“Our recruiter didn’t want to mess up our trip, so she worked her magic and didn’t call us until the day before we came home,” says Megan. “It turns out our contract was canceled because they didn’t need anymore PICU nurses, but she got us CVPICU instead!” She even had another nurse that knew the pair put in a good word to help secure the new contract. 

“With this job, things can happen at any time,” Megan explains. “But I trust my company and I trust my recruiter.”

If you have questions, don’t hesitate to contact your Aya team. We’ll be here.

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Travel Nurse Contracts 101: What To Look For In Your Next Contract

Before you sign one, you need to know what you’re getting into .

Just when we think the whole COVID crisis is over, here we go with variants and a new round of global shutdowns.

But look, we’re not here to chat up variants and viruses. We’re here to talk about your travel nurse potential. Specifically your contract and what to be on the lookout for.

This is important because as the initial wave began to slow down, many travel and crisis response nurses were getting their contracts canceled midstream.

And many were pretty surprised to find it was written into the contract, but they never even realized it.

You’ll want to be aware and thoroughly examine any potential travel nursing agreement, especially if it’s a pandemic response or crisis deal, because there may be new circumstances you need to double-check are covered in the contract, such as cancellation terms.

Here’s what you should look for in a travel nursing contract to keep yourself protected.

What would trigger a contract to be canceled?

Personally speaking, I have never had a contract canceled. Perhaps I’m one of the outlier travel RNs, but it’s true. In fact, the opposite has proven to be true in that I’ve been asked to renew about 40% of the time.

But something we’re hearing and seeing more of is canceled gigs.

There are several reasons for a facility to terminate a contract that is not the fault of the travel RN. For instance, a drop in patient census that is sustained. Most likely, you were contracted due to increased admissions, and if it drops, well, we travelers frankly won’t be needed.

This happened after the first COVID wave began to taper off as many nurses were sent back home.

Another thing to be mindful of is the fly-by-night agencies. When a crisis emerges, everyone and their mother wants a piece of the contract pie, so we often see “mom and pop” travel shops start hiring travelers. The danger for us nurses is that they are likely the first to get cut, which means you, the RN, will be terminated first.

Asking for references and checking with peers is a great way to vet the agencies before signing a shady contract.

Is there a ‘cancel clause’ in your agreement?

Most all of us have bought a car, signed a lease for an apartment, maybe even made an in-app purchase on our iPhone. Well, guess what? There are little micro clauses all throughout the agreement which describe your rights and the company rights.

This is especially true in your travel contract.

While I am not an attorney, and I don’t believe you need one for this, it is essential to read and understand under what circumstances your contract may be canceled. Not only that but what will or won’t be covered by the agency or hospital if it is.

For example, your housing or travel stipends. Will you need to pay it back? How about a lease? Who picks up the tab if you need to move out and vacate?

As with anything in life, even your contract can be canceled, so be sure to empower yourself by reading that specific fine print.

Calling in sick or going COVID positive

One of the nurses I worked with tested positive for COVID and had to quarantine for 10 days. Because she was working in a COVID unit on a crisis gig, her contract specifically stated that she would be paid for lost hours if she had to ‘Q.’

Not all contracts read or will do the same, and these days the spector of quarantine could impact all of us.

What about calling in sick? Are you covered? Will you get sick pay, and furthermore, how long will it last?

These are things to know upfront.

Let’s talk health insurance

Many companies are now offering decent health insurance for their travelers.

It’s becoming a hot topic, especially as more RNs ditch the staff job and move to the nomadic nurse life. As such, health insurance is kind of a big deal. More agencies are offering this benefit, in addition to others as well.

But traveler beware, find out when the first day of coverage is, how much it is, and if you are eligible for benefits if you switch companies.

It’s true that travel nurses are more likely to get injured on the job than their housebound colleagues. In fact, exposure at work, particularly in healthcare facilities with limited PPE, is a hazard for travel nurses. As a result, you need to be ready. If you don’t have your own health insurance, check to see what type of coverage the agency offers.

Then ask yourself, is it enough?

What about Cobra?

This is a great question and one that should be asked upfront. Cobra is a continuation of your health insurance coverage after you leave your job. Typically, you have a 60-day window to sign up for Cobra, and it can be expensive.

The bottom line is not all coverage is the same so do a little research.

Other things to think about

Many nurses are leaving staff jobs to take on the travel life. If this is you, something I always recommend is to go on good terms. In other words, no negative social media posts…no ugly letters to the manager…and do it professionally so that if you had to, they’d take you back with open arms.

For instance, here, where I’m working as a traveler, we had a nurse arrive only to find out his gig had been delayed by 3-weeks. He ended up going back home only to find his last job was filled, and he had no place to go. He hadn’t left on good terms and wasn’t welcomed back.

The message I’m sharing is to really consider what other options you’d have if your contract was canceled and also to consider all options and possibilities before you sign the dotted line.

The final word

Becoming a travel nurse is not a small decision.

Make sure you know what to look out for in your contract before jumping headfirst into the world of travel nursing. Many things should be considered, including how your company will handle emergencies, whether or not you’ll get sick pay if called in sick, and if they offer health insurance–just to name a few.

It’s important to ask these questions upfront so they’re no surprises down the line when it comes time for renewal.

To learn more about the travel nursing opportunity and cities across the country, visit Bestica Healthcare and start planning your next assignment today.

>>  www.BesticaHealthcare.com

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Travel Nurse Pay Breakdown | Expenses & Tax 2022

I was originally drawn to the travel nursing field for the opportunity to travel the country while getting paid at the same time. I knew travel nurses were paid fairly well and had been bombarded with various emails advertising travel nursing pay scales as high as $40 an hour.

Find available positions here!

I am typically not the type of person to do something just for the money. I tend to be more interested in the experience, but I also realize that I have bills to pay too. I didn’t really pay attention to the breakdown of my travel nursing pay, all I cared about was whether or not I had enough money to live and to get from point A to point B.

Fortunately, I had a wonderful travel experience but wish I took the time to really understand travel nursing pay scales, expenses and how to deal with taxes. Many of your recruiters don’t take the time to break these topics down for you so it is ultimately your responsibility to seek out the information and educate yourself.

Non-Taxable Travel Nurse Pay

The most alluring advertisement travel nursing agencies use to get you in the door is the infamous “tax advantage plan”.  This can also be referred to as per-diem, stipends, reimbursements or a combination of all three. What this basically means is that if you are traveling away from your home for work, there are certain expenses that are tax deductible and certain reimbursements that are non-taxable.

The most common types of stipends or reimbursements that you will hear about in the travel nursing world are referred to as meals and incidentals (incidentals include taxi/bus fares, parking, and tips), lodging or housing stipends, and travel reimbursements which cover your expenses to and from each assignment; other non-taxable items can include retirement plans, license reimbursements and health insurance. When travel nursing companies advertise pay rates, they will often tell you a blended rate. A blended rate combines an hourly taxable wage such as $20 an hour with your non-taxable reimbursements and stipends to give you a higher hourly rate. Here is an example of a typical pay package:

• $20 per hour – taxable base rate that is reported to the IRS
• $250 per week for meals and incidentals – non-taxable
• $2,000 a month for lodging – non-taxable
• $500 for travel reimbursement – non-taxable

Your blended rate is calculated by breaking down your non-taxable stipends into an hourly rate and adding it to your taxable base rate.   For instance, if you worked 36 hours per week on a 13 week assignment, your hourly rate would look something like this based on the above scenario:

Flex Pay and Rigid Pay

There are two different types of pay packages: flex pay and rigid pay.

Flex pay packages allow you to mix and match, add or subtract various non-taxable stipends such as healthcare, retirement, and license reimbursements to your pay package, while rigid pay packages are non-negotiable.  The benefit of flex pay is that you can decrease your hourly taxable base rate and increase your non-taxable earnings by adding more benefits such as 401K. Many travel agencies have to be careful not to enter the illegal realm of wage re-characterization when dealing with flex pay packages. To learn more about wage re-characterization visit traveltax.com .

Travel Nurse Overtime

There are some travel contracts offering overtime; for example, some agencies will ask you if you want to work 4 days a week instead of 3 days a week. Overtime by law has to be paid time and a half of your taxable base rate. So, if you make $20 and hour, then your overtime pay will be $30 an hour. In the world of nursing, $30 an hour isn’t really that much extra money for an extra shift; however, over the long run it does add up. If this is something you are considering doing than make sure you negotiate a higher taxable rate for lower non-taxable stipends if possible so that you really get more bang for your buck. I have never heard of a part-time travel contract so if you are looking to work part-time than it would be better to consider an agency job in your desired destination.

Discover available travel nursing positions today!

Disadvantages of Non-taxable Stipend Pay

We also have to take into consideration retirement. I know many of you aren’t necessarily thinking about your social security check right now, but it is important to take into consideration that the social security payments are based on 35 of your highest income earning years. Non-taxable money is not considered income.

Last but not least, if you get injured on the job, you only receive 2/3 of your hourly taxable base rate. These are some scenarios to take into consideration when thinking about a travel nursing pay package.

Travel Nursing Pay: Things to Consider

With all things considered, a travel nurses pay rate, is very comparable to a staff nurse’s pay rate. However, there are some out of pocket expenses travel nurses have to be aware of that regular staff nurses don’t have to consider;

• Most travel nursing agencies do not offer paid time off. If you are thinking of taking a vacation or are taking time off in between assignments then you will not be paid
• Most travel nurses have to pay for their own certifications such as BLS and ACLS
• Sometimes travel nursing agencies will not pay for your annual physical and TB tests
• If you want to take an assignment that is across the country, your travel reimbursement might not cover the entire cost

Just like any of other profession, it is important to budget and prepare for the unknown. Take care of yourself make sure you are well organized.

What is an “IRS Tax Home”?

In order to qualify for these non-taxable stipends or reimbursements, one must maintain what the IRS calls a tax home. A tax home is your place of residence that you maintain and pay for while you are out on your travel assignment. Ideally, the IRS would like a travel nurse to take an assignment somewhere and then return to their tax home where they maintain a PRN or full-time nursing job.

Most travel nursing agencies will have you sign a form stating that you do have a tax home. If you do not have a residence that you are planning on maintaining when you are traveling, you will be referred to as an itinerant worker. As an itinerant worker, you will be required to pay taxes on all income earned including stipends and reimbursements. When applying with different travel agencies, make sure they are aware of your itinerant status. You can get more information about tax homes here .

Ready to start travel nursing? Start here!

Tips to Make Traveling a Snap

All of this talk about taxes and the IRS can be a little scary. Here are a few easy tips to follow to make your traveling experience a little less complicated:

• Maintain a mileage log. You will have to write down you odometer reading the beginning of the year on January 1 and again at the end of the year on Dec 31. If you start traveling in the middle of the year you can look back at your maintenance records for previous odometer readings. You must also document your mileage to and from your place of employment.  Click here to print a mileage log.
• Return to your tax home in between assignments if possible or at a minimum of once per year. Document when you travel back to your tax home. Here is a travel log for your trips back home .
• Maintain a PRN or agency job in the same vicinity as your tax home. The IRS would like to know that you do business on a regular basis where you live.
• There is no need to keep track of meal or grocery receipts. The IRS gives you a set stipend for meals. If you exceed the stipend you are considered to be living above your means and will not be reimbursed.
• Keep a copy of all of your travel contracts. Make sure they have a beginning and ending date on them. This proves that you were really working on a temporary basis.
• Don’t work in a city more than 12 months in a 24 month period. The IRS will think you abandoned your tax home.
• There are tax people who specialize specifically in travel nursing. I recommend getting in contact with these people prior to starting your assignment. If you want to tackle this on your own then I recommend getting organized. Here is an organizer that helps you keep track of all your tax information;

Don’t let the IRS or financial aspects of travel nursing scare you.  Travel nursing should be an enjoyable experience not an accounting nightmare.

As with any tax issues, you should seek advice from a licensed tax professional before filing. This article only offers suggestions and isn’t meant to be tax advice. We leave that to the pros.

Professionals can help you through this experience in combination with educating yourself about nursing pay packages. It sounds complicated in the beginning, but the more you learn the lingo, the more prepared you will be to negotiate your next travel contract.

Start your travel nursing adventure here!

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Sample Breakdown of a Travel Nursing Pay Package

Travel nursing pay packages are complex because they incorporate many variables that are not common in traditional pay packages. Meanwhile, many people believe that travel nursing agencies are actively gouging hospitals and employees. In this article, we’ll provide a detailed breakdown of a travel nursing pay package, including all the costs that come out on the agency’s side. We hope this information helps travel nurses negotiate better pay packages and helps everyone achieve a more thorough understanding of how travel nursing pay works.

What is a travel nursing bill rate?

All travel nursing pay-packages begin with a “bill rate”. A bill rate for travel nurses is the hourly rate that an agency can charge the hospital for the travel nurse’s work. Essentially, bill rates account for all the revenue that travel nursing agencies generate. Therefore, all costs, including the travel nurse’s pay, come out of the bill rate.

Find your next travel healthcare job on BluePipes!

Bill rates vary from hospital to hospital and from contract to contract. As a result, travel nursing agencies calculate pay rates for each job based on each job’s specific bill rate.

In this article, we’ll use a bill rate of $90 per hour. This is a common bill rate for travel Registered Nurses in many parts of the country in the 2023 job market.

That said, it’s important to note that bill rates fluctuate depending on market circumstances. For example, bill rates are much higher when the travel nursing job market is hot and demand for travelers is high.

Are Travel Nursing Agencies Gouging Their Partners?

When bill rates are high, we routinely receive inquiries and see statements on social media asserting that travel healthcare agencies gouge hospitals and healthcare professionals. In most cases, the evidence is a comparison between the bill rate the agency charges the hospital and the pay rate the agency pays the healthcare professional.

For example, the evidence might be that the bill rate is $90 per hour and the pay rate is $53 per hour. Therefore, the accuser assumes, the agency is keeping the difference of $37 per hour, or 41% of the bill rate, as profit.

This assumption is wholly incorrect. Unfortunately, it is also prevalent and pervasive. It is routinely spread by self-proclaimed experts who have unfortunately become social media influencers.

Discover the ultimate travel nursing pay calculator.

The truth is that there are many compensation variables and costs that are not reflected in the pay rate or on the pay stub. When we account for these variables, the agencies’ actual profit margins become much more reasonable.

That said, it is still possible for an agency to gouge a traveler or a hospital. We hope that this breakdown of all the variables will help us recognize the difference more easily.

What are contract time variables?

In addition to the bill rate, we must also consider the travel nursing contract’s “time variables.” This is because agencies bill hospitals for time the traveler works. More time equals more money. Moreover, more time means that fixed costs, like a travel stipend, become a smaller percentage of total expenses.

Time varies from contract to contract. For example, you’ll find contracts for 36 hours per week and others for 40 hours per week. Some contracts are 13 weeks, while others are only eight weeks. Moreover, some contracts, like those in California, pay overtime after 8 hours in a day .

For this example, we’ll use 13 weeks and 36 hours per week as the time variables. These are the most common time variables for travel nursing contracts. We’ll also use standard overtime rules in this example (so there won’t be any overtime hours involved).

So, here are the details we have so far:

• Bill rate: $90/hour
• Duration: 13 weeks
• Hours per week: 36
• Total contract hours: 468
• Total anticipated revenue: $42,120 (468*$90)

What are travel nursing pay package burdens?

Now let’s take a look at a set of costs that the industry commonly refers to as “burdens”. These are expenses agencies incur which are directly related to the healthcare professional or securing the assignment for the healthcare professional. However, they are not listed on a pay stub or the contract between the agency and the traveler.

The original Universal Profile and Credential Management for travelers.

Please note that different agencies may classify these costs differently. However, we will be accounting for all costs in our example, so our calculations will ultimately end up in the same place. That said, here are some examples of burdens:

Orientation hours

Many agency/hospital contracts include non-billable orientation hours . Essentially, the agency agrees not to bill the hospital for a specified number of hours during the travel nurse’s orientation.

The standard range for non-billable hours is anywhere from 4 hours to 12 hours, but it can be more. Note that the agency still has to pay the travel nurse for this time. Therefore, it essentially turns into a cost for the agency.

Vendor management fees

Many hospitals utilize Vendor Management Services (VMS) . These services provide a host of tools that help hospitals and agencies centralize, standardize and streamline the process of talent acquisition.

Of course, these services cost money. To collect that money, the VMS typically takes a cut of the bill rate. In the past, the VMS’s cut would typically range between 2% and 6%. These days, we’ve heard numbers as high as 20%. For example, if the bill rate was $150 per hour, then the VMS would take $30, leaving the agency with $120.

Tiered bill rates

Tiered bill rates are very similar to Vendor Management Fees. With tiered bill rates, the VMS separates their staffing agency partners into tiers. Each tier gets a different bill rate. However, the hospital is always billed the same rate.

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It’s important to note that the only bill rate the hospital ever really knows about is the actual bill rate. Therefore, when hospitals share bill rates with travelers, they are almost always sharing the bill rate before any VMS fees or tier modifications.

Billing fees

Sometimes hospitals charge agencies a billing fee. The intent of this fee is to cover the hospital’s costs for settling the bills between the agency and the hospital. If this fee exists, then it’s typically 2 to 3 percent of the bill rate, sometimes less.

Liability Insurance

Almost every agency/hospital contract has a clause that requires the agency to carry liability insurance for each traveler. The contracts typically require both Professional and General liability insurance. The coverage is necessary regardless of whether or not the traveler carries their own liability insurance.

Licensing / Credentials / Medical Record Costs

Next, hospitals require agencies to submit and maintain credentials for each traveler that an agency has working at a hospital. These credentialing requirements vary from hospital to hospital. The requirements often include licenses, certifications, medical exams, drug screens, background checks and more.

Credentialing costs vary depending on what’s involved. It’s often between $150 and $1,000 per contract. Agencies know that sometimes it will cost more and sometimes less. Therefore, they usually try to determine an average cost they can apply to all contracts.

In this example, we’ll use 12 hours of non-billable orientation, a 6% vendor management fee, $650 for liability insurance and $500 for compliance costs.

So, at this point, we have the following:

• Non-billable orientation: $1,080 (12 hours*$90) = $2.31 per hour (1080/468)
• Vendor Management fee: $5.40 per hour (.06*90)
• Liability Insurance: $1.39 per hour (650/468)
• Compliance: $500 = $1.07 per hour (500/468)

Taxable base rates and payroll costs

Next, we’ll review the payroll costs the agency will incur. We begin with the “taxable base rate,” which is the taxable hourly rate the agency pays to the travel nurse.

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As we previously discussed , the travel nursing pay package is like a pie. Some agencies will offer a low taxable base rate and higher stipends , while others will offer higher base rates and lower stipends. The important thing to understand is that paying higher taxable base rates increases the agency’s payroll costs.

You see, both employees and employers pay Federal Insurance Contributions Act (FICA) taxes. The FICA tax for employers is currently 7.65 percent of gross compensation. Therefore, if an agency pays a taxable base rate of $10 per hour, they incur $0.765 in FICA costs per hour. By contrast, if an agency pays a taxable base rate of $20 per hour, they incur $1.53 in FICA costs per hour.

Similarly, agencies must also pay certain taxes to the state based on the taxable base rate. These taxes can include disability insurance, workers’ compensation, and unemployment insurance costs. These taxes and burdens vary dramatically from state to state.

Finally, it’s important to note that federal payroll taxes and most state payroll taxes cap out at various income levels. However, the taxes typically apply to all the taxable income that travel nurses earn because travel nurses tend to receive a relatively small percentage of their income as taxable pay which means that travel nurses often do not reach the cap levels.

In this example, we’ll use a taxable base rate of $25 per hour and a state tax and burden cost of 3.5%.

• Taxable base rate: $25 per hour
• Employer’s FICA: $1.91 per hour ($25*.0765)
• State DI/UI/WC: $0.88 per hour ($25*.035)

Travel nursing tax-free reimbursements and benefits

Now we’re left with the tax-free reimbursements and benefits that the agency can potentially provide to the traveler. The most common tax-free reimbursements and benefits are:

• Travel stipends
• Meals and incidental expenditure (M&IE) stipends
• Lodging stipends or company-provided housing
• Medical benefits.

However, agencies may also offer rental cars, 401ks, tickets to major sporting events, and many other offerings.

In this example, we’ll use a travel stipend of $1,000, an M&IE stipend of $350 per week, and a lodging stipend of $2800 per month. We’ll also assume that the travel nurse will take the agency’s medical insurance. Let’s assume the cost to the agency for the medical benefits is $450 per month.

• Travel Stipend: $2.14 per hour (1000/468)
• M&IE Stipend: $9.72 per hour (350/36)
• Lodging Stipend: $17.95 per hour (2800*3/468)
• Medical Benefits: $2.88 per hour (450*3/468)

Sample breakdown of a travel nursing pay package

Let’s put everything together to see how this sample pay package breaks down. We’ll start by subtracting the burdens and payroll costs from the bill rate. While this is an unconventional approach, it will provide us with a clear illustration of how the bill rate breaks down to the pay rate.

We started with a bill rate of $90 per hour. From that, we are going to subtract our burdens and payroll costs. They are as follows:

• $2.31 per hour: Non-billable orientation
• $5.40 per hour: Vendor Management fee
• $1.39 per hour: Liability insurance
• $1.07 per hour: Compliance and credentials
• $1.91 per hour: FICA
• $0.88 per hour: State DI/UI/WC

These costs total $12.96 per hour. So, we’re left with $77.04 per hour ($90 – $12.96).

Now let’s subtract the compensation variables from the remaining $77.04 to see what the agency is left with to run their operations. The compensation variables are as follows:

• $25 per hour: Taxable base rate
• $2.14 per hour: Travel Stipend
• $9.72 per hour: M&IE Stipend
• $17.95 per hour: Lodging Stipend
• $2.88 per hour: Medical Benefits

The compensation variables above total $57.69 per hour. So, this leaves the agency with $19.35 per hour as their gross profit per hour worked ($77.04 – $57.69).

What’s the travel nursing company’s gross profit margin?

Everyone has probably heard the term “profit margin” or “gross profit margin.” A company’s gross profit margin is calculated as follows:

Gross Profit / Revenue = Profit Margin%

Different travel nursing companies calculate this in different ways. The main difference is in how they treat “revenue.” Some companies consider the total bill rate to be their revenue. In this case, the agency’s gross profit margin is 21.5% percent in our example. That’s the $19.35 gross profit divided by the $90 bill rate.

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Other companies define their revenue as only what they receive after removing the Vendor Management fee ($90 bill rate minus the $5.40 vendor management fee). In this case, the revenue would be $84.60. Therefore, their gross profit margin would be 22.87% percent. ($19.35 gross profit divided by $84.60.)

Travel nursing agencies typically strive to obtain gross profit margins between 20 and 25 percent. Therefore, this example would be a decent rate for the travel nurse.

Clearing the confusion

Now we can revisit the confusion caused by comparing the pay rate to the bill rate. In our example, the “pay rate” that the healthcare professional sees on their pay stub is $52.67. That’s the taxable hourly base, the lodging stipend and the M&IE stipend.

If we thought that the remaining $37.33 per hour went to the agency, then we would think the agency’s gross profit was over 42%. However, as we demonstrated above, the agency’s gross profit is only 21.5%.

Finally, it’s important to note that agencies must use the gross profit to cover their own operating expenses. Those expenses include pay for their recruiters, account managers, compliance team, payroll team, accountants and others. The costs also include software licenses, office space, phone systems and more.

Understanding the pay package in this light is highly beneficial for travel nurses. Travel nurses can use this information to inform their negotiations. They can also use this information to help them compare competing pay packages . As a result, they’ll be better able to spot good deals versus bad ones and ultimately make more money!

Related posts:

• Travel Nursing Pay – Qualifying for Tax-Free Stipends and Tax Deductions: Part 2: Maintaining Temporary Status In our previous blog post we laid out the criteria under...
• Travel Nursing Pay: Flexible vs. Rigid If you’ve discussed travel nursing pay with multiple agencies, then...
• 5 Reasons Travel Nursing Pay Quotes Can Be Wrong Pay is among the most important variables that travel nurses...

Hey Kyle, Thanks this is a great article! How do you find out the bill rate? Is your recruiter allowed to deny that info if you ask for it? What I’m not getting is how do you know its a good offer vs a low ball without first knowing the bill rate? Is there a somewhat standard hourly that tends to be a good offer vs a not so good offer? Thanks, Elizabeth

Hey Elizabeth,

I’m glad to hear the article is useful! You can ask for the bill rate. The recruiter is allowed to deny your request. In some cases, the contract between the hospital and the agency makes the bill rates confidential. I think it’s best to view it like any other job. For some reason, there is a tendency for travelers to think that agencies are “making money off of them”. This is obviously true, but no more so than any permanent employer. The Hospital Corporation of America is a publicly traded hospital company. They report gross profits of 80%+ and net profits of 3%-6%. We typically wouldn’t require a permanent employer to let us know how much revenue they were generating off of us. We have an article on this topic here .

That said, we should always negotiate to get the best deal. I see many travelers these days saying you shouldn’t work for less than $1500 net (not including free housing) outside of California and $2000 net in California for a 36 hour/week contract. However, I don’t believe in negotiating with bottom lines. The best way to know whether or not you’re getting a good deal is to compare offers from multiple agencies. It takes a little extra time, but it’s worth it.

We actually have a free eBook on negotiating. You can get it by joining BluePipes through this link . If you’ve already joined then you can get it by logging in and going to bluepipes.com/ebook. Here are a couple of articles that might help too:

Negotiating Tips for Travel Nurses Improve Travel Nurse Negotiating Strength

I hope this helps!

I am new to traveling I will begin my first assignment in January 2017 I am not sure what to ask or what to look for. How do I obtain housing, do I drive my own car? Its all very new to me

Congratulations on your first assignment, Michelle. Yes, it can be overwhelming with all of the variables. In most cases, you can obtain housing through the agency you work with, or you can secure your own housing and receive a housing stipend from the agency. Most travelers bring their own car because rental cars are expensive and will reduce the pay rate your receive from the agency.

You can find more detailed information on all these issues on our blog. Use the search option in the navbar. This video seems to be particularly useful to new travelers. I hope this helps!

This is the best thing I have read about my profession since I started travel nursing! Many, many thanks

Thank you so much for the wealth of knowledge your site comprehensively provides. After doing some research, I’ve determined that I will not be maintaining a tax home and will therefore be an itinerant traveler. As such, I will not be eligible for most Tax Advantage Plans, which typically include meals and incidental expenses. Do you have any advice for how an itinerant traveler should evaluate and negotiate a contract? Thanks!!

Hey Catherine!

You’re very welcome and thank you! We’re glad to hear the information is useful. I would say that evaluating and negotiating would be much the same. For evaluating, you still want to make sure that you’re considering every pay component that the agency is offering. For negotiating, it’s always best to work with multiple agencies so that you have alternatives and get them competing for your services. That said, I don’t have a blog post specifically for this topic, but I’ll work on one (thanks for the idea!). In the mean time, here are some links that might be of use (you may have seen them already, but just in case).

Travel Nursing – Is It Worth It Without a Tax Home? Travel Nursing Pay Comparison Video Travel Nursing Overtime Pay Video Negotiating Travel Nursing Pay Free eBook

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