Ask a Travel Nurse: What is overtime based off of if you take the tax advantage program?


travel nurse trying to figure out taxesAsk a Travel Nurse Question:

Hi David, thanks for your response. I did get your book and it helped a lot! I do have another question for you though, regarding overtime. When you take the tax advantage program what is your overtime based off of? Is it your “hourly” rate or your “blended” rate?

Thanks again!

Ask a Travel Nurse Answer:

Thanks for the follow-up question and thank you for also supporting my book; I’m glad to hear it has helped.

I do want to clarify a bit here because I think I know what you are asking, but the term “blended rate” usually has a different connotation. Usually the place where most people will encounter a “blended rate” is when working in California. This is because anything worked over eight hours is considered overtime and paid at time and a half. So if you work a twelve hour shift, you will earn a base rate the first eight hours and an OT rate the last four. For example, let’s say that you are contracted to work in a California hospital that is quoted as paying a blended rate of $35/hr. If this is the case, your base rate would be $30/hr which is what you would make the first eight hours. Then, the last four hours are billed at an OT rate (1 1/2 of $30 = $45/hr). Doing the math (and by the way, I can’t believe you’re making me do math…I went to nursing school to AVOID math), your rate is figured by taking what you earn in the first eight hours ($30×8= $240), then figuring the last four hours ($45×4= $180), add the two ($240+$180= $420) and divide that by 12 hours ($420/ 12) which gets you a “blended rate” (or average) of $35 per hour.

Now, I understand that a tax advantage program can change this equation a bit and I believe what you might be asking is if OT will be figured off of your base rate before or after the tax advantage program is implemented. In that case, it actually might depend on your company and possibly even the assignment you take because some assignments will be paid through your travel company and some assignments might be paid through the facility’s payroll department. If your company is paying you, they will probably base your OT rate off your tax advantage base rate (the lower figure). If you are being paid by the hospital, they might not see the base rate your company pays you, only the base rate they are contracted to pay you (meaning that they might figure OT off of the higher rate they see). However, it has been a long time since I was eligible to participate in any tax advantage program, so I do not remember if you are even able to participate in one if the facility is paying you.

To make a long story short (too late), in the end, you will ultimately have to ask your recruiter or the payroll depart on each assignment whether or not the company or the facility will be paying you and how the OT will ultimately be figured.

Sorry to be so long winded only to tell you that your travel company will ultimately need to give you that answer, but I wanted to put out a bit more information for those travelers who have not yet encountered that situation.


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About the Author:

Hello everyone. I’m a travel nurse originally from Ohio who graduated in 1993 from Mount Carmel School of Nursing in Columbus. I completed a critical care fellowship at Riverside Methodist Hospital in 1994 and started traveling in that specialty a year later. My first travel assignment was in Maui and since that time I have completed close to 40 different contracts in various states with multiple travel companies. I am the author of Travel Nurse’s Bible (A Guide to Everything on Travel Nursing), in addition to my writings here and in the pages of Travel Nursing publications such as Healthcare Traveler Magazine and American Nurse Today. I am presently on assignment in Phoenix, AZ and travel anywhere from six to eleven months of the year.

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