When taking any job, it is important to understand the pay terms so that you can truly be aware of what you are earning. Travel nursing pay packages include factors that are not seen in typical compensation packages, so they can be confusing and overwhelming to comprehend if you aren’t used to them. In this article, we will help you get familiar with the important elements of a basic pay package along with helping you calculate your weekly net income!
Considering the Time Variable
Any time you are reviewing your pay package, you will want to make sure you are paying close attention to the number of weeks within the contract and how many hours are expected from you per week. Each contract will vary in time commitment, so in order to accurately understand your pay, you must consider the time variance. Some offers will be for a 13-week contract, while others may be for 10. Even more, one may be for 40 hours per week and the other just 36. You will want to take these differences into consideration when calculating your weekly net pay and when deciding on whether to accept an offer. This is particularly important when comparing offers and making sure you are receiving fair compensation.
Understanding Pay Package Offers
The easiest way to best understand a pay package is to walk through the comparison of two different options. We will break down each offer to show you how to best calculate your weekly net pay and truly comprehend your compensation.
Pay Package 1 Example
The offer is for an 8-week contract with 40 hours per week, an anticipated 320 hours.
- Taxable Base Rate: $26/hour
- Tax-Free Housing Stipend: $1800/month (paid weekly)
- Tax Free M&IE Stipend: $250/week
Pay Package 2 Example
The offer is for an 8-week contract with 40 hours per week, an anticipated 320 hours.
- Taxable Base Rate: $21/hour
- Tax-Free Housing Stipend: $2100/month (paid weekly)
- Tax Free M&IE Stipend: $275/week
Step One – Calculate Weekly Housing Stipend
The first step you will want to take is making sure all figures are broken down into the same time frames. For example, the Tax-Free M&IE Stipend is given in a weekly figure. To compare these offers, we would need to know the weekly figures for the monthly housing stipend. To calculate those numbers, you would just multiply the monthly stipend by the number of months the contract is for and then divide by the number of weeks.
Pay Package 1 Example
(Monthly housing stipend x 2 months) / total weeks
$1800 x 2 months = $3600 total housing stipend
$3600 / 8 weeks = $450 weekly housing stipend
Pay Package 2 Example
(Monthly housing stipend x 2 months) / total weeks
$2100 x 2 months = $4,200 total housing stipend
$4200 / 8 weeks = $525 weekly housing stipend
Step Two – Estimate Tax Cost
The second step to fully understanding your compensation is to estimate how much taxes will be deducted from the taxable base rate. Doing this will give you a better idea of your actual weekly take-home pay.
To estimate tax cost, you will first calculate your gross weekly taxable income. To do this, simply multiple the contracted weekly hours by the base taxable rate.
Pay Package 1 Example
taxable base rate x weekly contracted hours = gross weekly income
$26 x 40 hours= $1040 weekly gross income
Pay Package 2 Example
taxable base rate x weekly contracted hours = gross weekly income
$21 x 40 weeks = $840 weekly gross income
Next, we will multiply our weekly gross income by the estimated tax rate (check with your recruiters if you aren’t sure what this is). For the purpose of this example, we will set our tax rate at 20%. This will then give us an estimate on how much tax will be removed from your weekly check.
Pay Package 1 Example
gross weekly income x tax rate = weekly tax deduction
$1040 x 20% = $208 estimated weekly tax deduction
Pay Package 2 Example
gross weekly income x tax rate = weekly tax deduction
$840 x 20% = $168 estimated weekly tax deduction
Step 3 Calculate Your Total Estimated Weekly Net Pay
Now that we have done all the above calculations, it’s time to discover your total estimated weekly net pay. First, you will subtract your anticipated weekly taxes away from the expected weekly gross income. You then will add on to that your weekly tax-free stipends (housing and M&IE stipends) to discover your total estimated weekly net pay.
Pay Package 1 Example
(gross weekly income – estimated weeklytax deduction) + weekly house stipend + weekly M&IE Stipend = total weekly net income
($1040 – $208) + $450 + $250 =
$832 + $450 + $250 = $1532 weekly net income
Pay Package 2 Example
(gross weekly income – estimated weeklytax deduction) + weekly house stipend = total weekly net income
($840 – $168) + $525 + $275 =
$672 + $525 + 275 = $1472 weekly net income
We hope that by comparing these two different pay packages, we have shown not only how to calculate your weekly net income, but also the importance of doing the calculations so that you can compare opportunities accurately. Knowing your options fully, you can make educated decisions about the next steps in your career and budget.