All of your compensation and the company’s expenses/profits will come from one thing; The Bill Rate.  A bill rate is the amount contracted for the hospital to pay the agency based on hours worked for each nurse contracted.  You, as the travel nurse, may never know your bill rate between the agency and the hospital.  You need to know how it’s broken down and why you only have a certain amount to negotiate with.

Bill Rate Broken Down

Please note: The actual numbers in this calculation are strictly for example purposes. Bill rates fluctuate continuously, so this in no way is a statement on what a current bill rate might be.

Bill Rate: $65/hr
Nurse pay rate: $35/hr (~53%)
Social Security and unemployment,
workers’ compensation, liability,
malpractice, recruitment and
other administrative costs (including profit or GPM): $30

Think of it as a huge pie

The best way that I can think to break down the bill rate is by thinking of the Bill Rate as a huge pie.  Each separate component is a slice of the pie.  Each individual contract has its own pie….some are large, and some are small.  This is dependent on many factors, including location, hospital size, company relationship with the hospital, level of hospital need, etc.   Ultimately, the size of the pie is beyond your negotiation.  There is a separate contract between the hospitals and the nursing agencies that defines this.

The travel company gets their slice

The travel company is going to take a percentage of the pie right off the top.  It’s important to remember that your recruiter does not have a say in this.  This is generally corporate-mandated and covers such things as overhead for the company, employee salary/benefits, and a defined profit margin.  The amount of the pie that the company will lock out of negotiations varies from company to company.

The standard GPM (gross profit margin) is 20-22%. Some agencies, the larger agencies, maintain a 25% GPM for most contracts.   Smaller companies tend to maintain a lower GPM, as low as 15%.

– Crystal Lovato, Placement Specialist at Freedom Healthcare Staffing

The last part of the pie belongs to the traveler (you).  

Several items will come out of your part of the pie.  These may include:

– Travel reimbursements
– Licensing reimbursements
– Any benefits offered, i.e., 401K, health insurance, etc
– Housing

And last but not least…..Salary.

How these items come together in your contract is discussed in Preliminary Contract Negotiations. Check out the TOP 10 Questions for Travel Nurses on Taxes

If you are a new travel nurse or looking into becoming a travel nurse:

Travel Nurse Guide: Step-by-Step (now offered in a PDF Downloadable version!)