The four components
Taxable hourly rate
The actual wage per hour. Goes on your W-2, subject to federal, state, and FICA taxes. Typically $22-$32/hour for travel PTs.
Housing stipend
Weekly amount paid toward housing. Non-taxable if you maintain a valid tax home. Usually $900-$1,800/week depending on cost-of-living at the assignment.
M&IE stipend
Meals & incidentals — a smaller weekly stipend ($250-$450) for food and daily expenses. Also non-taxable with a valid tax home.
Travel reimbursement
One-time payment ($500-$1,500) split between contract start and end, covering your travel to and from the assignment. Non-taxable if properly documented.
How the pieces add up
Here's what a realistic acute care PT contract in Denver looks like, broken out:
| Component | Weekly | Taxable? |
|---|---|---|
| Taxable hourly (40 hrs × $26) | $1,040 | Yes |
| Housing stipend | $1,050 | No (with tax home) |
| M&IE stipend | $325 | No (with tax home) |
| Travel reimbursement (prorated) | $25 | No |
| Total weekly pay package | $2,440 | — |
That's what a recruiter means when they quote "$2,440 a week." About $1,040 is taxable. $1,400 is not, assuming your tax home checks out.
Why the taxable portion is so small
The structure isn't accidental — agencies deliberately weight packages toward stipends. Three reasons:
- Lower taxes for you. Stipends paid non-taxably put more money in your pocket than the same gross paid as wages.
- Lower payroll taxes for the agency. Agencies don't pay FICA/Medicare on stipends the way they do on wages. They're incentivized to maximize stipends.
- Competitive positioning. A higher-stipend package looks better in "total weekly pay" comparisons, even if the taxable wage is suspiciously low.
The IRS is aware of this and tolerates it if you maintain a genuine tax home. Without one, the whole stipend structure collapses and everything becomes taxable.
Tax home — the single biggest thing you can't get wrong
To receive stipends non-taxably, you need a legitimate tax home. The IRS definition is specific and PTs routinely get it wrong.
What qualifies
- Duplicate expenses. You're paying for a residence somewhere that you're not currently living in — rent, mortgage, or substantial payments to family for maintaining your space.
- Regular business at that location. You return to the tax home area periodically. Many travelers satisfy this with PRN work at a home-area facility, a returnable rental, or similar.
- Temporary intent. Each assignment is under 12 months and you genuinely plan to return home.
What doesn't qualify
- The "rotate assignments forever, never return home" pattern
- Paying a family member $50/month with no paper trail, no formal lease, no duplicate expenses
- A PO box or mail-forwarding address with no actual residence
- Traveling continuously for more than 12 months in the same metro area (the assignment becomes "indefinite" and the tax home at your original address is considered abandoned)
What to ask for in your contract
A good recruiter will show you the pay package line-by-line. If they only give you a blended number, ask for the breakdown. Three things to specifically confirm:
Exact taxable rate
Shows on your pay stub. Affects unemployment benefits, loan applications, and future income records. Ask for the exact hourly number.
Guaranteed hours
If census drops and the facility cancels your shift, do you still get paid? Guaranteed-hours contracts exist but you have to ask for them — they're especially important in SNF and acute settings.
Overtime and weekend rates
If the setting expects weekend or on-call coverage, what's the rate? Is on-call included or paid separately? Confirm before signing.
Take-home math — what actually hits your bank account
The gross weekly package isn't what you receive. For a $2,440 weekly package with typical tax and stipend splits, a PT's actual take-home usually lands between $1,950 and $2,150 after federal and state taxes on the taxable portion, plus any agency-provided health insurance deductions.
What changes the math
- Tax home status. Invalid tax home = stipends become taxable = take-home drops 20-30%
- State income tax at contract location. California, New York, Oregon take 5-10%+ on the taxable portion. Texas, Florida, Tennessee, Washington, Nevada take 0.
- Your filing status and other W-2 income from the year. If you worked staff jobs elsewhere in the same tax year, you may owe additional tax when filing.
- Agency health insurance. If you use agency benefits, $80-$200/week comes out of the taxable portion pre-tax. If you buy private coverage, that's separate from your pay package.
Common PT-specific contract quirks
SNF productivity standards
Most SNF contracts include productivity expectations (85% is industry norm, 90% common). Productivity = billable minutes ÷ clocked minutes. Documentation, team meetings, and transitions between patients all count against your denominator. If you can't hit the standard, contracts can end early. Ask what the number is and what happens if you miss it.
Point-of-service documentation
Many acute and SNF settings expect PTs to document during treatment, not after. If you're used to finishing notes at home, most travel contracts won't pay for that time.
Acute on-call
Smaller hospital acute care contracts often include weekend rotation or on-call as part of the package. Confirm upfront — if on-call is weekly and unpaid extra, that changes the effective hourly rate.
Home health per-visit models
Home health sometimes pays per-visit rather than hourly. A competent home health PT doing 30 visits/week (6/day × 5 days) with a mix of routine and eval visits can clear $2,400+. A PT struggling to hit 20 visits/week earns $1,600. If you've never done home health, don't start with a travel contract.