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Everything you need to know about per diem allowances, who qualifies, what's covered, and how it impacts your take-home pay as a travel healthcare professional.
What is Per Diem?
Per diem, from the Latin meaning “by the day,” is a daily allowance provided by employers to cover living expenses while you're on a travel assignment. Unlike standard wages, per diem is a tax-free stipend designed to offset the cost of maintaining a second residence away from your permanent home.
For travel healthcare professionals, per diem is one of the most significant financial benefits of taking assignments away from home. It covers daily living costs including housing, food, and incidentals, allowing you to focus on patient care instead of worrying about out-of-pocket expenses.
“Per diem can significantly increase your overall compensation package as a travel clinician, often adding thousands of dollars per assignment in tax-free income.”
Who Qualifies for Per Diem?
To receive the full per diem stipend (housing + meals), you must meet two key requirements set by the IRS:
- The 50-Mile Rule: Your assignment must be at least 50 miles from your permanent tax home (your primary residence where you maintain living expenses).
- Duplicate Housing Expenses: You must incur duplicate housing costs, meaning you continue to pay for your permanent residence (rent, mortgage, or similar) while also paying for temporary housing at your assignment location.
Clinicians who have duplicate housing expenses but do not meet the 50-mile distance requirement may still qualify for the meal per diem portion only.
What Expenses Does Per Diem Cover?
Per diem allowances are broken into three primary categories:
Lodging
Temporary housing costs such as apartments, extended-stay hotels, or furnished rentals near your assignment.
Meals
Daily food expenses including breakfast, lunch, and dinner while working away from your tax home.
Incidentals
Minor daily costs like laundry, tips for service staff, and other routine travel-related expenses.
How is Per Diem Calculated?
Per diem rates are based on guidelines set by the U.S. General Services Administration (GSA). The GSA publishes standard federal per diem rates for every county in the United States, updated annually each October.
Rates vary by location, major metropolitan areas and high-cost-of-living cities typically have higher per diem rates than rural areas. Your staffing agency uses these GSA rates as a baseline to determine your per diem package, ensuring your stipend aligns with the actual cost of living in your assignment area.
“GSA per diem rates are updated every fiscal year. Always check the current rates for your assignment city to understand your potential stipend.”
Benefits of Per Diem
Per diem offers several key advantages for travel healthcare professionals:
- Reduced Administrative Burden: No need to meticulously track receipts or submit expense reports. Your per diem is a flat daily rate, making reimbursement simple and hassle-free.
- Budgeting Clarity: Know exactly how much you'll receive before your assignment starts. This predictability makes it easier to plan your finances and choose housing that fits your budget.
- Tax Advantages: Per diem stipends that meet IRS guidelines are non-taxable income. This means more money in your pocket compared to the same amount paid as regular wages.
- Increased Take-Home Pay: Because per diem is tax-free, your overall compensation package as a traveler can be significantly higher than a comparable permanent position, even if the hourly rate appears similar.
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