Travel Therapy Job Market Outlook for 2023

2022 was a blockbuster year for the travel therapy job market and the industry as a whole. It looked like it would be a good year when writing our 2022 travel therapy job market outlook, but it turned out even better than I anticipated. We saw some new all time highs in average pay packages and number of open jobs, particularly for PTs and SLPs, especially in the first half of the year. Our travel therapy jobs list exploded in number of jobs due to all of the really good and high paying contracts. It looked like that trend was possibly reversing around the middle of the year, but instead things mostly leveled off at a new higher baseline. Most of the travel companies that we work with set new records for travel therapist placements and also for the bill rates they were seeing.

For us at Travel Therapy Mentor, we had a big year of growth as well. We interviewed and added several new travel companies and over a dozen new recruiters throughout the year as the volume of therapists contacting us interested in getting connected with good recruiters increased. Unfortunately we also had to remove some that weren’t upholding the standards that we expect based on feedback we received in our contract completion forms. We ended 2022 with 14 travel therapy companies and 54 recruiters at those companies to whom we now send prospective travel therapists.

Holiday Travel Therapy Job Market Lull

Normally around the end of December and beginning of January, there’s a lull in the travel therapy job market. This happens for a variety of reasons including new year budgets being in flux, hiring managers taking time off, and travel therapists wanting to be home for the holidays and start fresh in January, causing a lot of competition. Fortunately though, for the third straight year we saw only very little slow down in the job market at the beginning of January. The market stayed strong through the holidays and the beginning of the year, which has been a good indicator of how the rest of the year will go lately. Here’s a live video of us discussing the January job market lull way back in 2019.

Is 2023 a Good Time to Take a Travel Therapy Job?

The beginning of the year seems to be the time when many therapists start considering jumping into travel therapy. We always get lots of social media messages and emails around this time asking if it’s a good time to start traveling and how the rest of the year looks for the market. Each year, as we get more knowledgeable about the industry, and we get better at spotting trends and predicting what’s to come. We also have the advantage of having frequent contact and getting insight from travel therapy recruiters, managers, and company owners at a variety of different companies. We consulted all of them to get some fresh data in terms of current job numbers for each discipline, as well as how they see the rest of the year unfolding.

Here are the ranges we received for the current open travel job numbers by discipline:

  • PT: 420-900
  • SLP: 100-1,300
  • OT: 115-425
  • PTA: 65-175
  • COTA: 30-100

You probably have a couple of questions when looking at these numbers: Why is the range so large, and how do these numbers compare to periods in the past? Let’s go ahead and answer those questions.

The reason the range is so wide is because we work with a large variety of travel companies from very small (1 recruiter) to absolutely massive (100+ recruiters). A consistent trend we’ve seen when looking at the data from this variety of companies is that often bigger companies usually have access to a larger number of jobs when compared to smaller companies. With that being said, it’s probably not a good idea to only work with the large companies because often smaller companies can pay better than a large company if they have the same job due to having lower overhead, and sometimes smaller companies may have direct connections with niche jobs that some of the larger companies may not have.

We often get questions about the highest paying travel therapy companies, and while there are some common themes, there’s no one size fits all answer. We always recommend working with a few different companies to see a variety of job options, including at least one big company and one small company for this reason.

In terms of the job numbers, compared to last year at this time, the number of open travel jobs is about the same or slightly higher for each discipline. Last year records were being broken, but this year is even better! The OT, PTA, and COTA job markets are all better than at the beginning of 2022, while PT and SLP are around the same but still extremely strong. Overall, it’s a great time to be a travel therapist.

How is the Travel Therapy Job Market likely to Change Throughout 2023?

As I mentioned above, I was a little pessimistic on the travel therapy market going into the second half of 2022. Inflation was running rampant (especially short term housing prices), travel pay packages seemed to have peaked, hundreds of new therapists had entered the market chasing higher pay, and job numbers were starting to level off. It seemed like we were in for a reversion to the mean of some sort. Fortunately I was wrong, and the market stayed very hot throughout the entire year. At this point, my opinion has changed and I’m more optimistic.

Bill rates are remaining high; the exuberance around increasing contract pay rates has declined somewhat, meaning less permanent therapists quitting to travel; inflation has slowed down; and open job numbers are staying strong. It seems that this increase in travel therapist demand could be much more long lived than first expected. I now believe that there were so many elective surgeries put on hold during 2020 that it could take another year or more for everything to get caught up and demand for therapists to slow down. And if you take into consideration that some therapists and other healthcare workers left the field after 2020, the higher demand could be ongoing even longer.

All of the companies we work with agree with this sentiment as well. They all expect 2023 to be as good or better than 2022 for travel therapy jobs, and they expect a continued higher baseline for pay packages. Travel companies and recruiters are looking forward to a record breaking year, and so are we!

Should You Jump into Travel Therapy in 2023?

Honestly, there’s never been a better time. The market has been booming for nearly a year and a half now coming off of the massive slowdown in 2020/early 2021, with no signs of letting up. It’s a “traveler’s market” with the supply/demand dynamics in our favor, meaning increased negotiating power for travel therapists.

We helped thousands of therapists get started with travel therapy in 2022 and look forward to helping even more than that in 2023. If you’re reading this and are considering taking the leap into travel therapy, but not sure where to start, our Free Travel Therapy 101 Series is the perfect place to learn the basics.

If you want an in-depth, step by step guide to not only getting started but becoming financially successful as a travel therapist, then Our Comprehensive Online Course is for you.

And of course, finding great recruiters for your situation is vital in having success as a traveler, so fill out our recruiter recommendation form to get connected with a few that will fit your needs. If you have any questions, feel free to contact us! Best of luck with your career goals in 2023!

Jared Casazza

Written by Jared Casazza, PT, DPT – Jared has been a traveling physical therapist since 2015. He has become an expert in the field of travel healthcare through his experience, research, and networking over nearly a decade.

Taxable Pay as a Travel Therapist

What is a reasonable hourly taxable pay rate for a travel therapist?

This is a question we get quite often, which is understandable. This area of travel healthcare is confusing and certainly not black and white. Pretty much everyone knows that travel therapists earn more than permanent therapists on average. What some therapists don’t realize though is that the reason travelers earn more is due to the stipends (also called per diems) that are offered on travel contracts.

If you’re new to this concept, it’s important to learn the basics about travel therapist pay and how travel pay packages are set up first.

Some travelers who travel without a tax home receive their stipends as fully taxed income, in which case they don’t earn nearly as much as they would otherwise after taxes each week. Travel therapists without a tax home often wonder if it’s actually financially worth it to be a traveler, and in some cases it isn’t depending on the bill rate of the job and the amount the travel companies keeps.

But, the majority of travel therapists do have a tax home, which means that they are eligible to receive their housing, meals, and incidental stipends tax free. This is great and certainly means more take home pay each week. But naturally, many travel therapists when negotiating contracts and looking at their pay packages wonder how much of the money should be received in the form of stipends and how much should be received as hourly taxable pay.

Why Do Travel Therapists Receive Stipends?

The first thing that’s important to understand is why travelers would receive tax free stipends in the first place. Obviously the stipends themselves are for housing, meals, and incidentals while traveling for a contract, but why would they be tax free for some therapists but taxed for others? The reason for this is that if a travel therapist has a tax home that they’re traveling away from temporarily for work, then the IRS doesn’t see it as fair for them to have to pay taxes on money that they’re using for additional expenses that they’re already incurring back home.

This is the same reason that those traveling away from home for business can write off the cost of their lodging, meals, incidentals, and transportation against their business income. For example, think of a pilot or other professional who travels away from home often for work. Those costs had to be incurred as part of the job, and the individual still has all of their fixed costs back at home as well, so they’re not obligated to pay taxes on those travel related costs that are associated with their job.

On the other hand, those travel therapists without a tax home don’t have any costs back home, so there’s no reason for them to be getting a tax break on their lodging, meals, and incidentals since the costs at their “travel job” are the only living costs they’re paying. Once you understand the reasoning, it makes perfect sense, although it can be confusing at first.

To learn more about travel pay when traveling with vs. without a tax home, check out this article and this video.

Evolution of Taxable Pay Over Time

We can all agree that in most cases, if a therapist can’t earn more money as a traveler, then it doesn’t make much sense to do it. After all, there are certainly cons of travel therapy that can make it a hassle. Packing and moving often, finding temporary housing, getting licensed in various states, and having the risk of a contract being cancelled early are all headaches. Figuring out benefits when working with multiple travel companies is also a concern that permanent therapists don’t have to deal with. Yes the adventure and freedom aspects of being a travel therapist are amazing, but ultimately probably not worth the downsides for most therapists if extra money isn’t involved. Because of this, for clinics to entice therapists to take travel contracts, they have to be willing to pay more for them to offset the cons and risks. Otherwise no one would take the position.

Initially when travel healthcare was new, this meant that a facility would offer a taxable pay rate at or higher than a permanent therapist would make at a comparable job in that location. The stipends were then added on top of that pay rate to cover housing, meals, and incidentals. The stipends weren’t very high because often the facilities couldn’t afford to pay both a high taxable rate and high stipends.

Over time, there are incentives which have gradually shifted more of the travel therapist’s pay toward stipends and less to taxable pay. You see, it benefits the travel therapist, the facility, and the travel company for taxable pay to be lower and stipends to be higher. This is because the taxes you pay as a traveler and the taxes the travel company pays on your behalf (FICA) are both lower when taxable pay is less. That means more money for you each week after taxes and lower expenses for the travel company. The facility benefits as well because they can pay a lower relative bill rate and still be competitive when compared to permanent positions when looking at after tax pay than they’d otherwise be able to. So, these days, travel companies try to offer as low of a taxable hourly rate as possible to the therapist, while offering the highest tax-free stipends possible, to get the highest after tax weekly take home pay for the therapist that the bill rate will allow.

Again, if all of this is very confusing to you, it’s best to start by learning the basics of travel therapist pay here and here.

So now you might be wondering, if making the taxable pay as low as possible benefits everyone involved, why not make it really low? Like minimum wage low? Here’s where the IRS enters the chat.

How Low of Taxable Pay is Allowed?

Everyone benefits from a low taxable pay… except for the government. Lower taxable pay means less tax revenue for both federal and state governments. To keep the government from losing out in this travel work arrangement, the IRS has put rules and guidelines in place. One way they’ve done this is to set maximum allowable amounts for housing, meals, and incidental per diems that they adjust based on the cost of living in the area of the job. You can find these maximum amounts on the GSA website. This keeps travel therapists and travel companies from agreeing on unreasonably high tax free stipends on a contract.

For example, if you take a travel therapy contract in a high cost of living city like San Francisco, the allowable stipends (AKA per diems) for a job there will be very high. So, if the bill rate from the facility is high enough, the travel company can pay you a LOT in tax-free stipends. Whereas if you take a travel therapy job in rural Kansas, the allowable per diems will be much lower, so there are restrictions on how much of the bill rate the company can allocate to tax-free stipends.

As most travelers, and the IRS, know though, not all travel jobs have a high enough bill rate to max out those stipends, while keeping the hourly taxable pay in a reasonable range. There is only so much money in the “pot” (the bill rate that the facility is paying) to go around, and it has to be divided accordingly into the taxable hourly rate and the stipends.

If the GSA per diem rates were the only safeguard, then on those lower bill rate contracts, that would mean that a travel company could just pay a traveler minimum wage for their taxable rate, while putting all of the extra money into stipends to max them out. This would save both them and the traveler money on taxes. However, the IRS knows that there are incentives for companies to do this, and if left with no rules they would do this every time. So, guidance was put out by the IRS to stop this from happening. Not paying high enough taxable wages in order to move money into tax free stipends is known as wage recharacterization and is illegal.

Avoiding Wage Recharacterization

So, we want to make as much as possible after taxes as travel therapists. Part of this means paying less in taxes (in addition to working with high paying travel companies and negotiating well) by having higher tax free stipends and a lower taxable hourly rate. But we don’t want to reduce the taxable rate so much that we risk wage recharacterization. So, we have guidelines on the maximum stipends via the GSA website. But, how do we know what is an appropriate hourly taxable wage? How low is too low?

If only it was that easy. If you know anything about the IRS, you should know that nothing is black and white. Unfortunately, there’s no clear answer here. Part of it depends on your discipline (PT, OT, SLP, PTA, COTA, etc). Part of it depends on what a comparable permanent job would pay in that setting and location. Part of it depends on how high the bill rate for the job is, and if your stipends are able to be maxed out or not. Part of it depends on how you, your accountant, and your travel company (likely guided by their lawyers and accountants) interpret wage recharacterization.

The safest bet would be to accept a taxable hourly wage that is the same as the permanent staff is making in the facility where you’ll be working as a traveler, and then just take the remainder as tax free stipends. This would mean much lower take home pay than you’d make with higher tax free stipend amounts, but absolutely no risk of the wages being considered as recharacterized. On the other end of the risk spectrum, you could insist on only taking minimum wage for every contract and get as much as possible in tax free stipends. This would mean a much higher paycheck, but it would put you at serious risk of having to pay taxes and fines if ever audited due to wage recharacterization. I have heard of several therapists doing this over the years. The right decision is probably somewhere in between.

Your taxable hourly wage should be a reasonable amount for the work performed, without being so high that it makes travel therapy no longer worth it. For me, as a traveling physical therapist, I have always chosen to err on the side of caution with a taxable rate in the $20-$30/hour range depending on the contract. My justification for this pay range is that I know some therapists who have taken permanent jobs making that hourly wage in the past, so it’s much easier to justify this rate than it would be accepting minimum wage as a physical therapist. It’s also low enough that my tax free stipends are usually plenty to cover my living expenses (and have extra to put towards savings) while on contract.

What Should You Choose for Your Taxable Pay as a Travel Therapist?

Ultimately, there’s no clear answer here, and the decision is up to you. Choose an amount that you could justify based on the particular contract. If you feel uncomfortable making a decision, then consulting a professional is warranted. I recommend setting up a consultation with a trusted CPA who is knowledgeable on taxes for traveling professionals to get their opinion. Our preferred CPA who works with healthcare travelers is Nermina Culesker at Choice 1 Accounting and Tax. You can set up a consultation with her here if you’d like to discuss your taxable pay as a traveler or other travel tax related questions. Having worries of an audit hanging over your head isn’t worth making a little extra each week by cutting corners on how your pay is allocated. Peace of mind is valuable.

If you’re brand new to travel therapy and this was all very confusing to you, then I’d recommend checking out our free Travel Therapy 101 series to learn the basics. If you want more in depth knowledge before jumping into travel therapy to improve your odds of financial success, then our course, Becoming a Financially Successful Travel Therapist is the way to go. If you want help getting connected with great recruiters for your situation, then fill out our recruiter recommendation form to get our top picks based on interviewing hundreds of recruiters over our years as travel therapists.

Jared Casazza

Written by Jared Casazza, PT, DPT – Jared has been a traveling physical therapist since 2015. He is also a personal finance enthusiast. He has become an expert in the field of travel healthcare through his experience, research, and networking over nearly a decade.