The 'Internal Travel' Trap: Why Hospital Contracts Can Be Risky

“Cut Out the Middleman and Make More Money!”

That is the pitch.

Hospitals are getting smarter. Instead of paying an agency $120/hr to hire you (where you keep $60), they are offering “Internal Travel” contracts directly to nurses for $85/hr.

On paper, it looks like a raise.

• Agency Offer: $50/hr (Taxable) + Stipends
• Internal Offer: $85/hr (Fully Taxable)

You see “$85/hr” and think you struck gold. But before you quit your agency, you need to look at the taxes.

In 2026, the “Internal Travel” trend is exploding, but for many nurses, it is actually a pay cut disguised as a raise.

The Tax-Free Stipend Advantage

The magic of travel nursing isn’t the hourly rate; it’s the Tax-Free Stipends.

When you work for an agency, a huge chunk of your check (often $1,200 - $1,600 per week) is completely tax-free GSA reimbursements for housing and meals.

When you work “Internal” for a hospital, 100% of your income is W2 wages. It is all taxed.

The Math: Who Actually Wins?

Let’s look at a real comparison for a standard 36-hour week.

Option A: Agency Contract

• Taxable Rate: $40/hr x 36 = $1,440
• Tax-Free Stipend: $1,500/wk
• Gross Pay: $2,940
• Estimated Taxes (24% on the $1,440): -$345
• TRUE NET PAY: $2,595 / week

Option B: Internal Contract

• Taxable Rate: $85/hr x 36 = $3,060
• Tax-Free Stipend: $0
• Gross Pay: $3,060
• Estimated Taxes (24% on the whole $3,060): -$734
• TRUE NET PAY: $2,326 / week

The Verdict: You took the “higher” $85/hr job, but you took home $269 LESS per week. That is over $3,000 lost in a 13-week contract.

The “Political” Risk of Internal Contracts

Money aside, working directly for the hospital comes with risks that agencies usually protect you from.

1. You Are the First to Float

Internal travelers are often float pool staff. You don’t have a “home unit.” You go where the fire is. If the Psych unit is short, you are going to Psych, even if you are an ER nurse. Agencies can write “No Float” clauses into contracts; Internal contracts rarely allow this.

2. Zero Representation

If a manager bullies you or changes your schedule from Days to Nights, who do you call?

• Agency Nurse: Calls their recruiter, who threatens to pull the contract if the hospital doesn’t fix it.
• Internal Nurse: Calls hospital HR… who works for the hospital. Good luck.

When Does “Internal” Make Sense?

Internal travel isn’t always bad. It makes sense if:

1. You are Local: If you don’t duplicate expenses, you don’t qualify for tax-free stipends anyway. In this case, the high hourly rate is King.
2. The Rate is Massive: If the internal rate is $120/hr+, it usually beats the agency rate regardless of taxes.

Don’t Guess. Run the Numbers.

Never accept an Internal contract until you compare the True Net Pay.

Use Our Pay Calculator Enter the agency offer vs. the internal offer to see which one actually puts more cash in your pocket after taxes.

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