Everything is based upon the rate that your contract location is paying for you to work. Pay rates are set by the place you are working, not the agency you are working for.
So, if a building offers a pay rate of $65/hour, your agency will first deduct a percentage of that right away to cover their expenses and profit for the contract.
Agencies use their portion of the bill rate to pay for things like:
- Operating costs of the staff and office
- Contribution to your health insurance and 401k benefits
- Payments to social security and unemployment
- Premiums for workman’s compensation and liability insurance for workers
NEXT, they may put a portion of the money aside to cover your moving reimbursement or licensure expenses.
Then, whatever is left of that money, they will split into a taxed rate and an untaxed rate.
Finally, when you are looking at the pay rate, you may be confused because it shows a taxed hourly rate of $24/hour, which is low for a therapist. This is because you are also receiving an untaxed amount of the equivalent of $22/hour AND reimbursements for travel. You combine your taxed rate and untaxed rate to get your blended pay rate for the assignment.
In this section, I want your take-away to be that nothing is “free” in travel and that all of the money and reimbursements come from somewhere in your pay package. A single number, e.g. $65/hour x 40 hours/week x 13 weeks will be the amount that the agency is working with to pay you all of your money, and also keep the agency afloat and pay them.
If you have questions on the nitty-gritty about pay or understanding if you qualify for these reimbursements and tax-free money, I highly recommend first of all learning about a tax home and then reviewing the FAQ page on www.traveltax.com