This blog post was inspired by some questions I’ve gotten recently regarding the financial implications that accompany being a travel therapist. In this post I want to talk about not only the financial factors but also the lifestyle factors that play into the decision to become a travel therapist. What would a post on this blog be without talking about finances, am I right?! After all, that is the most common reason leading someone to pursue travel therapy in my experience.
An important factor, that those considering travel therapy are often unaware of is, the tax considerations. In order to be eligible for tax free stipends (the reason travel therapy is so lucrative) you have to meet certain criteria based on the tax laws. I have been promising to write a post on the tax implications of traveling for a while, and I’ve been working on it but want to make sure that I know as much as possible before telling you guys. In the meantime, the most important, and burdensome, of the criteria is to have duplicate expenses while traveling. This means that you have to be paying living expenses in both your “tax home” as well as in the area where you’re working. (I always recommend checking out Travel Tax as they have a great FAQ section that helped me a lot when I was first starting out).
When prospective travelers find out about this, I often hear, “Is it even worth it to travel if you have to pay rent in two places? The extra pay isn’t enough to offset that, is it?”. Those are great questions, and I want to address them both. First lets start with a refresher on the pay difference between a travel job and a permanent job. We’ll use the example of a new grad here:
- Average starting pay at a permanent job for a new grad PT is around $70,000 from what I’ve seen over the past couple of years. This will, of course, be higher in some areas and lower and others, but I’d say it’s a good estimate of the average.
- Average weekly pay after taxes for a new grad traveler is around $1,550. My first contract paid $1,560, some make less, and some make significantly more (I just spoke to a new grad who accepted his first travel contract making $1,900/week after taxes!).
Let’s assume that the traveler works 50 weeks per year. As a traveler without vacation time, this just counts as two weeks of lost pay.
- $1,560 * 50 = $78,000/year
Now you’re probably thinking, only $8,000 more AND I have to pay rent in two places?! That’s not a good deal at all. But wait, this is comparing apples to oranges. Don’t forget that I said the $1,550 figure is after taxes are taken out. What would this equate to before taxes? Using Pay Check City, I find that you would have to be making a salary of $124,000/year before taxes in order to bring home $78,000 a year (assuming Virginia taxes and no exemptions)!! Now with an apples to apples comparison, we have:
- $70,000/year on average at a permanent full time PT job
- $124,000/year on average taking travel assignments full time assuming two weeks off per year
For an even more crazy comparison, let’s look at the new grad I was talking about earlier who just signed a contract making $1,900/week after taxes. Assuming he works 50 weeks per year, he will be making the equivalent of $153,000/year!!
An average of an additional $54,000/year sounds pretty awesome, right? These calculations are the exact reason I chose to pursue the travel PT route. But all of that money doesn’t end up being profit, and the reason is what I talked about earlier, duplicate expenses. All travelers should be paying living expenses at both their “home” and at their travel assignment location. For some this can lead to a lot of extra monthly cost, but if you play it right, it doesn’t have to be. Ideally you want to keep your living expenses at your tax home as low as reasonably possible in order to keep as much of that difference as possible. For this reason, I recommend renting a room in someone’s house where you can keep your stuff while away and where you can stay while between assignments. Depending on the area of the country that your tax home is in, a reasonable amount for a rented room can be pretty low. I’d say the average country wide for a room is $500/month. Again this is keeping in mind that some places are ridiculously expensive and others are ridiculously cheap.
- $500/month * 12 months = $6,000/year in additional housing costs
We also have to consider the fact that while on travel assignments, short term housing can be pretty expensive. I recently took a poll of 130 travel therapists and found that on average, short term housing costs about $1,055/month. Let’s assume that this is $255 more than you would normally pay for housing costs. After all, if you had a permanent job, in most parts of the country, finding decent housing for $800/month is more than reasonable. Let’s add this in.
- $255 * 12 = $3,060 + $6,000 (calculated above) = $9,060/year
So what is the total difference between an average paying travel job while obeying the tax laws and working 50 weeks per year compared to a full time permanent job?
- $124,000 (travel job) – $70,000 (permanent job) – $9,060 (additional cost of housing) =$44,940/year!!
I was terrible at statistics, but I’d call that a significant difference!
If money was the only consideration, travel therapy would obviously be a no-brainer. An additional $45,000/year goes a long way toward whatever financial goals you’re shooting for, whether that be fast loan repayment, saving for a down payment on a house, or seeking financial independence. There are of course other factors to consider which differ significantly depending on the stage of life the potential traveler is in. Traveling with young kids, although possible, doesn’t seem like the ideal situation to me. Having a spouse who can’t travel for his or her job would make it tough. Traveling while having a close family member sick at home would also be difficult. For young people with no kids and no family issues, I believe traveling is a great choice. For those that are outgoing, it provides an opportunity to constantly meet new people and experience new things. For those that are more introverted (definitely me), it forces you to open up more and do things you would normally avoid. My personality and confidence have evolved significantly in the past two years of traveling.
I often have a conversation at some point with each patient about being a travel therapist. I’ve gotten many different reactions (especially once they find out we live in a camper…) but the most common reaction goes something like this: “Wow! That is so cool. I wish I had done something like that when I was younger. I’d love to have seen more of the country when I was in good health.”
If you’re on the fence about traveling and have a conducive family/social situation, I encourage you to give it a shot. Worst case scenario, you hate it and it’s over in three months, but best case scenario, you have the adventure of a lifetime over many years of travel and end up in a much better financial situation with no regrets about traveling later in life.
Please feel free to reach out to me if I can help you at all when starting out because it can definitely be scary. I have mentored many people and love to help those starting out by answering questions and providing recommendations for good companies and recruiters.
Thanks for reading, and I’d love for you to leave questions or comments down below. What is keeping you from traveling or, if you’re a current traveler, what do you love and hate most about travel therapy? Where would be your ideal place to visit on a travel contract? What goals are you saving money for?