Hello!

This article will cover bonuses, deductions and reimbursements. We’ll dive into what bonuses are and where they come from, go over some deductions to expect on your paycheque and how reimbursements works, what can be reimbursed and where they come from as well.

Bonuses

What is a bonus?

A bonus is where an agency promises extra money outside of the hourly pay and stipends. Bear in mind, these are considered INCOME and are taxed. They can sometimes be called ‘extension bonus’ or ‘completion bonus’ or ‘loyalty bonus’.

Some examples include promotions like the following:

‘Take three contracts in the next year and collect a bonus of $8,000’!

‘For every 500 hours, there will be a 500 loyalty bonus.’

Now, before going any further, because some nurses get mad at their agencies or recruiters, let me clear this up right away -- Bonuses are income and thus cannot be tax-free. I’m not sure why anyone would think they wouldn’t be taxed, yet for some reason many nurses do and can get quite upset when they see a big chunk taken off in taxes.

Most bonuses have a few goals...

Retention

Ie. getting nurses to take MORE than just one contract by luring them with promises of a bonus. This isn’t evil or anything, and a lot of hospitals and relocation agencies offers these to have nurses sign up for a year or more.

Advertising

Ie. looking to lure nurses from outside the agency with snazzy-looking promotions that aim to generate hype. This is really important. As I mentioned, every agency basically is given the same amount by the hospital and has largely the same costs to operate and needs to make a certain profit to do well as a company. As a result, they all tend to offer similar pay packages. They can try and max the stipend which will leave more in your pocket (as long as the hourly is still the norm for nurses in that state), but otherwise, it is really hard for agencies to try and stand out amongst the herd of agencies out there. Bonuses help with this.

Where do Bonuses come from?

Good question!

Surprisingly, it can get a bit complicated as the information about this tend to be done behind-the-scenes with agencies -- which can make it hard to know where it is coming from.

Let’s break it down. Agencies get what’s called the ‘bill rate’ from facilities. It’s sort of a lump sum. How they divide the pie is largely up to them. Most agencies tend to have similar costs and want similar profits so the pay tends to be very similar across agencies.

It’s different per agency but just be aware, odds are any bonuses, no matter how sweet or alluring they appear, are likely taken from YOUR share of the overall pie.

I’ll give an example, I am an advocate for asking other travelers on assignment what their pay package is like and comparing. I want to know if mine is similar or less and if it is less, I’ll be contacting my recruiter to ask them, nay, demand they match it. This will be covered in a future article as it isn’t as easy to negotiate this (e.g. the other nurse may have started months before you when rates were higher, etc.).

Back to the subject of bonuses though... My friend and fellow travel nurse was making roughly $1.50 less than me. Now, she was with an agency that paid $500 per 500 hours worked or a similar retention-oriented program. Get this... our contracts were for 36 hours and for 13 weeks. This meant if she wanted that extra $500, she would need to take a second contract. But as you can see, I was making $1.50 more, which comes out to MORE money and I’m not locked in to a second contract if I want that bonus.

The image just below comes to mind... and the moral of the story is that I wouldn’t go chasing bonuses unless they already fit with your plans. I would also put a magnifying glass up to the pay for the contract and decide on the contract by keeping in mind the bonus (if there is one) is generally sources from the nurse’s portion of the contract so it should be your money anyways.

Deductions

What are deductions?

Deductions come off your paycheque much like in Canada. However, you might question (as I did) if you are exempt from any or how they work as you’re now paying into the American system -- but you’re still a Canadian and possibly returning to Canada.

Federal & state taxes

This functions pretty much the same as in Canada. You pay federal and provincial taxes. When you pay federal and state taxes in the United States, those income taxes are applied and credited in Canada when you file. If you worked in a low or no tax state and didn’t pay any state income tax, be prepared to pay provincial income tax when you get back. One way to offset owing a lot if you travel nurse to a no or low income tax state is to ask if your stipends can be maxed out (while still being about the norm for staff nurses in that state) and/or getting and maxing out a 401k so it lowers your taxable income. Something to bear in mind, a lot of Canadians think our taxes are so terrible, but some states are just as bad or WORSE (e.g. California). And on top of taxes, people still need to pay for their own health care. Which brings us to the next deduction you may see...

Medical/Health Insurance

In Canada, our health coverage is including with those federal and state taxes so we don’t even need to think about buying health care coverage. Not the case with the United States since they have privatized health care. This means that you have three options. HINT, I do not recommend the last option!

1. You can opt in to your employer’s health coverage and incur deductions from your weekly pay (typically $50-300/week) -- but ensure if you do, that the provider will cover Canadians!

2. You can opt out of employer sponsored coverage and get your own, either from Canadian insurance companies (e.g. Manulife, CAA, etc.). I found this option cheaper but you should ask what the weekly cost would be from your recruiter for their plan, then look into some providers and see which one works best for you.

3. You can opt out of employer coverage and take your chances! I do not recommended this. as you could be super cautious and someone still hits your vehicle and you get into a major accident requiring an ICU stay, surgery, etc. and ALL of it will be out of pocket. It just isn’t worth the risk for a couple hundred bucks every time you take a contract. Depending on your medical history and conditions, it can be as little as $150-350 for the entire 13-week contract. I personally would likely never take the employer coverage since it is often way more expensive then getting travel medical insurance from Canadian companies. I also do this before I travel anywhere outside of Canada or between provinces just in case. I think Canadian travel medical coverage is slightly cheaper from companies like CAA, Manulife, etc. because there is a little bit of reimbursement from the province. Not much but a little bit. I needed a walk-in appointment in Ontario after moving from Manitoba and I hadn’t changed my provincial card over yet. They charged me $70 for the appointment and Manitoba deemed the cost would have been about $50 if it were in Manitoba so that is all you’re reimbursed. I suspect the travel medical companies apply with the province for a little bit towards any accidents or illness.

401K

This one has been an issue lately. More and more agencies are saying they can’t enroll Canadian nurses into their 401K plans. They claim it is either due to not having a permanent U.S. address or the provider (e.g. Fidelity) will not allow Canadians. Still, I

m sure many do so if you are interested, look into agencies that have them or if you agency doesn’t allow Canadians to have 401ks, then see if there are other investment opportunities.

Life Insurance

Of course, yet another insurance. Health insurance, tenant insurance, life insurance, disability insurance, pet insurance... So many insurances just in case something happens! This one you might be able to opt in for, possibly with your employer for American programs or you could opt out with your employer and get your own plan back home in Canada. It’s up to you. I have my own plan from Sunlife that covers basically enough to bury me. A little grizzly for a Tuesday evening but, ‘oh well’ it can’t be helped!

Medicare

Alright, so you might be thinking, “Why do I have to pay for this when I already pay for my own insurance?” The answer is that what you pay in Medicare taxes will be credited towards your taxes in Canada. The United States divides the taxes you pay into categories. Canada just sort of lumps it altogether and credits you for it.

Additional Tax Information

The four-five main taxes in the U.S. are: Federal, state, sometimes city (e.g. NYC), Medicare, and social security (aka old age pension).

In Canada, all of those are credited towards your federal and state income taxes here in Canada. Your Medicare taxes from the U.S. are credited towards your income tax too and you still are paying in a qualify for universal free healthcare coverage when in Canada, and the social security or old age pension counts towards your CPP in Canada (which is the Canadian equivalent). All of this is made possible by a tax treaty formerly called NAFTA.

*An important reminder, when filling out tax forms when you get a contract, do NOT put ‘exempt’ from taxes. On the form, a W8-BEN (NOT a W9 which requires you to declare you are an American citizen), it has a section where it asks if you are part of a treaty country and a space where you write ‘Canada’ after ticking off ‘yes’ to the question. Many employers still accidentally send us Canadian nurses these W9 forms. The require you sign that you are an American citizen under pain of perjury, which we obviously can’t do. You can find a W8-BEN online, fill it out and reply to your recruiter that they might have made a mistake, remind them you are Canadian and can’t legally sign a W9, and then attach the W8-BEN instead for them to forward to payroll.

Reimbursements

What are reimbursements?

This is where your agency will pay you for your costs out-of-pocket that you had to pay in order to travel nurse to the States. These are not typically taxed.

There are A LOT of different things that can be reimbursed, but it will depend on your agency and their reimbursement policies as to what will and won’t be covered. And always, always ask! You never know if the demand might make them change their mind to cover something. For example, I haven’t found an agency yet who will cover, not only the state license fee, but the costs to have your university and provincial college of nursing send verifications to the state board of nursing. These are easily $100 each depending on your university and provincial college of nursing. The same thing for things like fingerprints, etc. I do not know of any agencies who may reimburse for that, but it can’t hurt to ask! And if it won’t be reimbursed and you needed it for work, hang on to the receipts and claim the expenses come tax season!

Here are some expenses that agencies might reimburse you for. Do keep all receipts because if you can’t get reimbursed for something, you can typically claim the expense on your taxes as a deduction!

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VisaScreen or Visa4Nurses

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State license fee

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TN border fee

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Travel/Mileage/Relocation

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Certifications, Continuing Ed, BLS, etc.

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Scrubs & supplies

Where do Reimbursements come from?

Another good question!

This is a bit trickier. Many nurses rightfully believe it solely comes from the pay package but that actually isn’t always the case.

Many larger agencies provide certain reimbursements as a benefit that doesn’t come from the pay. Whether they are able to write it off as a tax deduction, who knows?

The point is, certifications, licenses, visa paperwork, credentialing costs... with some companies, that doesn’t come from your share of the pie. It comes from the agency’s share of the pie. One notable example is RNNetwork that does this.

Go ahead and ask your recruiter where reimbursements come from (ie. your share of the money or theirs), any limits (e.g. $250 per contract), and what is and is not covered. Then factor all of this into your pay to determine how to best maximize your pay.

***Note: Every agency might have a time frame when to expect your reimbursements. Some agencies might say at the end of your contract, others might say on the first or second paycheque. The idea is that they want to ensure you won’t be cancelled or decide to quit after getting all that money back.

This is why, even though I wish agencies could pay for everything we need up front in advance, they would be crazy to do so in case a nurse doesn’t follow through or in case their attendance, performance or circumstances outside their control (e.g. low census) ends up getting them cancelled.

I, for one, LOVE getting a deal or bargain. It makes any trip or whatever more satisfying. So, when I went with RNNetwork initially, I got my VisaScreen covered (1k value), MA state license, all credentialing costs, mileage to and from Massachusetts (both of my last contracts), the $50 border fee, my BLS, drug screen & lab work, etc.

So, very little costs came out-of-pocket for me.

When you have to pay so much up front just to start travel nursing, it can really feel like you need to catch up to recoup your costs.