This is a tool to compare offers for different travel assignments.
It includes difficult to calculate items such as Tax Advantage.
You can use it to improve your pay and benefits.
You must gather accurate information for best advantage.
The data can be used for many purposes to help find assignments.
You can save your information and retrieve it at a later date.
This calculator provides a very powerful tool to compare agency offers and to assist in negotiating and structuring offers. While some of the entry boxes will be self explanatory and you will know the numbers to enter, others will entail a bit of work on your part. However, as you will see, the financial questions that you will have to ask your agency are questions that you should always ask. (Some other questions can be found in the article The Agency Interview, a list of questions to ask a new agency to see if they fit your needs.
First select from the pull down menus the appropriate assignment details. The menu choices cover 95 percent of the typical assignments. The pay status pull down does require some explanation. Regular pay is the common understanding of how pay is calculated everywhere and will most often be the right choice.
California has labor laws that specify that time and a half is paid after 8 hours worked in one day. Many California hospitals have shift exclusion rules and do not pay this way. Agencies may pay this way regardless of legal requirement or hospital practice. You need to ask your agency (not your hospital supervisor during an interview) specifically how the agency pays in California and if the base rate they quote is paid overtime after 8 on a 10 or 12 hour shift. If so, select overtime after 8 but again, only if your contracted shifts are longer than 8 hours.
In many cases, due to traveler’s common belief that overtime after 8 is California law in all cases, agencies will adjust the base rate to pay overtime after eight and the weekly gross pay will remain exactly the same. Because of this, the base rate will look rather low (and often will be in fact) compared to other offers. To compensate, the agency will quote a blended rate. Blended rate is the result of adding up your regular hour pay and your overtime hour pay and dividing the total by the total number of hours worked. This takes the regular pay and overtime pay and averages them over one week to come up with the blended rate. Using a blended rate bumps up the quoted rate (although not necessarily the actual pay). Again you must verify with the agency as to what their offer really represents.The blended rate is identical to the regular rate in most cases and so in most cases you should select Regular pay.
- In one rare case of blended rate and 48 contracted weekly hours, this calculator may not be accurate. In this case, your agency may handle the overtime in different ways (often as flat time). As the “Regular” pay calculator has been designed to pay time and a half after 40, you will have to manually adjust the numbers you enter. One way to do this in the example of 48 straight pay hours, multiply 48 by your blended rate per hour for a one week total, and then divided this number by 40. You would then select 40 hours a week and proceed as normal with the regular method calculator. Note that the displayed base rate for OT calculation will not be accurate.
Hourly pay. The calculator assumes this number is taxable income. However, a number of agencies offer something called Tax Advantage where they can redefine some of your income as non-taxable reimbursements. Generally, agencies will call this a per diem. If you are quoted an hourly, weekly, or monthly per diem or stipend, you can put this number in the per diem entry and select the period. Sometimes an agency will quote you something like this: “$35 an hour of which $5 is non taxed per diem.” If so, you would enter $30 in the taxable hourly, and $5 as an hourly per diem.
Some companies may also offer something called “Total tax advantage" where this per diem rate also includes a housing stipend. If you enter this entire amount into the per diem section, the calculator will still return an accurate number.
As a reminder, most travelers will have a permanent home that can be classified as a Tax Home by the IRS. If you do not, you are not eligible for tax advantage plans or even free housing and this calculator was not designed for you. You can still force it to work by only entering numbers in the taxable entry boxes. You will note that your estimated taxes will be much higher and this will directly impact your take home pay. You will be able to use this information to determine if creating a valid tax home with its associated costs will benefit you. See: Itinerant!
Advanced per diem assumptions for math experts: This is information you will need to know if you are checking the Association calculator results manually.
- There are several underlying assumptions about per diems that this calculator is using (as are most agencies): One is that per diem hours are capped at 40 hours per week, even when you work overtime. If you are are quoted an hourly per diem, this is added to your hourly pay for computing overtime (and this is noted in the calculator). A weekly or monthly per diem is not. Lastly, if you get a weekly, monthly, or hourly per diem, this is calculated on a weekly basis and then subtracted from your gross hourly pay for taxable and non taxable pay purposes. An hourly per diem is not multiplied by time and a half for overtime hours, but your gross pay will still be calculated as if it had.
- Some agencies will cap hourly per diems at some number other than 40. If this is so, you will have to manually adjust the number you enter into hourly per diems. For example, if your agency pays you $10 an hour per diem but only for 24 hours, multiply the two together - $240 in this case. Now divide it by your weekly scheduled hours; 36 or 40 hours; and enter this number in the hourly per diem box.
Travel pay is tax free if you have a tax home. Put in the entire round trip offered amount.
Now we come to a couple items that will require more work. Housing. Always, always, ask what the housing stipend will be if you decline supplied housing. Even if you have no intention of taking a housing stipend, you need to know what it is – otherwise, you will have no valid comparison between agency offers. The number supplied may also help you determine the quality of provided housing. This is the number to put into the housing entry box after first multiplying the supplied amount (usually a monthly number) by the total assignment length. This is technically a tax free reimbursement if you have a valid tax home.
- Advanced housing value calculation: If you suspect that the agency is low balling the housing stipend, in other words quoting you an amount far below their actual cost of supplying housing, ask them what the value of their supplied housing is. They will probably have to do a little digging to come up with a number, and they may be uncomfortable with the question. However as this directly relates to the quality of supplied housing, you probably would like to know. If they will not, or cannot supply this number, ask them about specifically which housing complex they use. You can then go online or phone the complex for housing rates. Don’t forget about furniture rental (you can also ask the complex if they have furnished units) and utilities.
- This requires some work, but is vital to get an accurate picture of your total compensation package. If the agency will not supply any of this information, you need to reconsider if this agency is really going to meet your needs. Basically, you will have no idea. Any good agency should be forthright if you approach them honestly with excellent reasons for wanting this information (like quality of housing).
Health insurance. This is a tax-free fringe benefit for all, even if there is a paycheck deduction. This should be an easy number to obtain, just ask them for the cost to COBRA health insurance. COBRA is a federal law that requires employers to extend your insurance past your assignment at your request. It mandates that the employee pay only the actual cost of the health insurance premium (plus an employer optional 2% to cover administration costs). This is an accurate number. If insurance is part of the offer, multiply a monthly amount by the length of your assignment (typically three months) and enter. If there are any copays, deduct the total of these before entering a number. (Alternatively, you can enter this copay in Deductions: tax free). Read more in this article: Health Insurance Choices for Travelers.
Other Reimbursements and Deductions. The common ones are listed next to the entry box. Clarify with your agency which of these optional items are taxable. But here is how these items are usually handled: Licensure is non-taxable (even if you don’t have a tax home), car rental is generally taxable, most items associated with housing should go in the tax free box. Be careful that housing items are not already included in the quoted housing stipend.
Gross pay per hour: represents all money the agency pays you directly or on your behalf (such as employer’s share of payroll taxes). If you entered all your numbers accurately, this will be directly comparable to other agency’s offers.
Now you get the fun of looking at the impressive numbers generated with the calculator! These do not represent your actual compensation. They represent all dollars actually spent by the agency on your behalf. This includes one hidden figure that is usually not considered at all by employees but is important: payroll taxes. Employers have to pay half of FICA (social security) on your behalf which is 7.65 percent of taxable pay. In addition, they also have to pay for workers comp and unemployment taxes in most states. We have estimated them at a total of 10 percent for the purposes of this calculator. Even though just an estimate, because it applies equally to all offers, you will be able to compare offers accurately. This number does affect the amount the agency can offer you – if you change your compensation from taxed non taxed, the amount they can afford to pay you goes up (or they can increase their profit margin).
If you’ve ever wondered why agency offers are lower when you decline or reduce untaxed reimbursements, this is why! Try this example:
One point to be aware of when comparing offers is that you cannot directly compare offers with different numbers of hours in a week when you are looking at hourly compensation. You must compare apples to apples. If you are concerned only with weekly take home pay regardless of hours worked, then you may compare apples to oranges. This calculator is just a helpful tool and there will be many ways in which personal preferences will override absolute accuracy.
In addition, you will not be able to use this calculator to determine “fair” overtime rates above scheduled hours. This depends in part on hospital bill rates for overtime. Bill rates for overtime vary from flat time to time and a half, and everywhere in between.
Time over scheduled hours should be negotiated separately. Although negotiating overtime is not within the scope of this article, a rule of thumb is to start with double time (of a reasonable hourly pay) and go from there. Full members can read much more about this topic in the Overtime rate negotiation.
If you have more than one offer for the same hospital or city and your preferred agency is not the highest offer, point that out to them and ask for a match of the best offer. Once that point is settled one way or the other, now you can negotiate to structure pay and benefits to your preference.If you take agency supplied housing, then generally this is not one of your negotiating points. However, it is worth mentioning that a few agencies are reimbursing the difference tax free between what they actually pay for housing and what they would have paid for a stipend.
You don’t want or need insurance? Zap it and apply it to another category. Do the same in every other category until you have it structured the way you want it!
You will see that as you change compensation from taxed to untaxed boxes that your tax burden will go down dramatically. This will change your take home pay by the exact same amount. The goal here is to end up with the same number for total gross pay as the original offer (or as negotiated up). This is the number that the agency has already committed to and you are just restructuring it – not costing them a cent more. So take note of this original gross pay figure (perhaps print out the entire calculator for future reference), and keep it the same as you juggle which benefits you want.
1 year package value: These are fun numbers and show how much small differences in your compensation package really makes in the long term. One dollar an hour is $2,000 a year!
Be aware that gross pay and net pay per year may look significantly higher than your former staff income. This is because there are no paid holidays, vacation, or sick time, and benefits are probably of lower quality as well. So staff income is not directly comparable with travel pay and this should be kept in mind. Personal factors such as costs to maintain a permanent home also come into play.
- We plan on having an additional calculator integrated with your agency offer in Full member pages that will take into account your personal tax status. You will be able to save this profile in your member preferences for current and future use. This will allow a very accurate estimate of take home pay and tax burden. In fact, accurate enough that you will be able to check your payroll stub on an assignment to make sure they have properly separated taxable and non taxable items. It can be very difficult to decipher some paystub reports. Basic members can accomplish the same thing at Paycheckcity with a bit of manual entry.
The agency will almost certainly have their own spreadsheet (which is basically a sophisticated calculator similar to this one) that they can plug these numbers into. However, their underlying formulas may not be based on correct assumptions and are often based on human factors that they know can allow them a bit more profit from certain changes. By the way, your recruiter will probably not know how their own spreadsheet works, they are only plugging in numbers. As a result, you will not be easily be able to debate the fairness of their results.
Full members will have help in persuading your agency with the help of a special printout of the original offer, and a printout of your restructuring of the offer to demonstrate that it is not costing them anymore. This will be provided in language that the agency bean counter can understand.
But wait! There is still more. At the very bottom of the calculator page you will see a big NEXT button. If your agency offer is complete and accurate, hitting this button and answering a couple of simple questions will enter your offer into a database for your direct benefit as well as other travelers. Submitting your offer will give you several powerful benefits, even for Basic members. Your offer will be saved and quickly available for review next time you visit. In fact all your submitted offers will be saved and available to only you one by one on a pull down menu which you can now continue to restructure if you want, or just to compare with other offers. This includes a text note you can make and save with each offer.
Thanks for using this tool! We hope that this calculator has proved useful to you.If you have found this tool useful, stay tuned! We have great things planned to make it even more valuable to your career:
- You will have the ability to display several offers on one page for a side by side comparison.
- You will be able to see the average offers received from all travelers for your city, state, or region.
- We plan to tie your offers into a tax database in My Account. This allows viewing of your actual take home pay (it is estimated presently) in a particular offer, and to verify that your agency is paying you accurately (sometimes they withhold taxes on some items incorrectly).
- This feature is analogous to negotiating buying a new car with Consumer Report’s price sheet on that new car! This feature should prove to be immensely valuable to you during negotiations with an agency. You should be able to increase your take home pay, or negotiate the benefits you really want. See the article on How to Negotiate a Travel Contract for additional information.
Publication 1542 - per diem and lodging rates allowed by the IRS