Calculate tax-free housing and meal stipends using official GSA per diem rates for your assignment location.
*Assuming 25% combined federal + state tax rate. Your actual savings depend on your tax bracket and state.
A travel nurse stipend (also called a per diem allowance) is a tax-free housing and meal allowance provided by travel nursing agencies. Rather than paying you a single wage, agencies split your compensation into taxable wages and tax-free stipends. The stipend amounts are based on official GSA (General Services Administration) per diem rates for your assignment location.
Yes — if you meet IRS requirements. The key is maintaining a permanent tax home in another location (like your home state) and not claiming the assignment location as your permanent residence. Your stipends must also not exceed the GSA per diem rates set for that location. If these conditions are met, the IRS treats your stipends as non-taxable reimbursements. Always consult a tax professional, especially your first year traveling, to ensure you qualify.
Your tax home is your permanent residence for tax purposes — typically where you own or rent a home and maintain your primary ties (family, utilities, vehicle registration, etc.). To qualify for tax-free stipends, the IRS requires you to have a bona fide tax home in a location other than where you're working. This prevents travel nurses from claiming stipends are non-taxable if they've relocated permanently to the assignment location. Many travel nurses maintain a small home or rental in their home state specifically for this purpose.
GSA (General Services Administration) rates are set by the federal government based on surveys of commercial lodging and meal costs in each metropolitan area. Rates include two components: the lodging rate (for hotel/housing) and M&IE (meals and incidental expenses). The GSA updates rates annually and posts them publicly. Different cities have different rates based on local cost of living — major metro areas like San Francisco and NYC have much higher rates than smaller cities. Travel nursing agencies use these official rates to set their stipend offers.
Housing stipend covers lodging costs (hotel, apartment rental, etc.). M&IE (meals and incidental expenses) covers food and small miscellaneous costs. GSA sets separate rates for each. For example, in New York City, the GSA housing rate might be $240/day while M&IE is $69/day. Some agencies may pay a combined stipend, while others break it out separately. Both are tax-free as long as they don't exceed the GSA rates for your location.
Travel nurse pay varies widely by location, specialty, shift (day/night), experience, and assignment length. Base hourly rates typically range from $28-$55+, with the most competitive locations offering the highest rates. Add in tax-free stipends (typically $1,000-$3,000+ per week in major metros), and many travel nurses find their total compensation significantly exceeds permanent staff positions. Shorter 4-week assignments usually pay more per hour than longer 26-week contracts. Always compare total compensation (base pay + stipend) across offers, not just hourly rate.
Stipends are typically not negotiable — they're tied to official GSA rates. However, agencies sometimes use "housing provided" models where they cover your housing directly instead of paying you a stipend. These arrangements vary. What IS negotiable is your base hourly wage. The higher your base pay, the more gross income you earn (though it's taxable). Focus negotiations on hourly rate, sign-on bonuses, and shift differentials, while being aware that higher-paying assignments often have lower-cost locations (and vice versa).
No — qualified stipends that don't exceed GSA rates are non-taxable reimbursements and don't appear on your tax return (assuming you maintain a valid tax home). Your W-2 should only show your taxable wages, not stipends. However, keep detailed records of your assignment location and dates, your permanent tax home address, and any agency documentation. If you're audited, you'll need to prove you qualified for the exemption. Some travel nurses use a tax professional experienced with travel nursing to ensure everything is documented correctly.
If an agency offers stipends above the GSA rate for your location, the excess portion is taxable. For example, if the GSA housing rate is $200/day but your agency pays $250/day, you'd only get $200 tax-free and $50 would be taxable income reported on your W-2. Some agencies intentionally offer higher "stipends" as a way to pay more total compensation (even if part is taxable), so always ask for a written breakdown of your base pay and stipend amounts before accepting an assignment.