Per Diem vs Contract Travel Nursing: Which Pays More in 2026?

Per diem and contract travel nursing offer different trade-offs between pay, flexibility, and stability. Here’s how to decide which works better for you.

The Key Differences

Contract Travel Nursing

• Fixed duration (typically 13 weeks)
• Guaranteed hours
• Set schedule
• Tax-free stipends
• Usually full benefits available

Per Diem Travel Nursing

• No fixed duration
• Work when you want
• Higher hourly rates
• Often no stipends
• Usually no benefits

Pay Comparison

Contract Pay Structure

Weekly breakdown:

• Taxable hourly: $35/hr × 36 hrs = $1,260
• Housing stipend: $1,400
• M&IE stipend: $500
• Total: $3,160/week

Per Diem Pay Structure

Daily rate:

• Per diem rate: $600-900/day
• 3 shifts/week: $1,800-2,700
• No stipends typically
• Total: $1,800-2,700/week

Annual Comparison (Working 40 Weeks)

Contract typically wins on gross earnings when you factor in stipends.

When Per Diem Pays More

Scenario 1: Short-Notice Premium

Per diem rates spike for urgent needs:

• Same-day shifts: +50-100%
• Weekend premium: +20-30%
• Holiday rates: +100%

Example: Regular per diem: $700/day Short-notice holiday: $1,400/day

Scenario 2: High-Cost Area

In expensive cities where you already live:

• No duplicate housing expenses
• Stipend value is zero (no tax home qualification)
• Per diem’s higher hourly makes sense

Scenario 3: Supplementing Income

Working per diem alongside other income:

• 1-2 shifts/week for extra cash
• Flexibility more valuable than stability
• Don’t need benefits

Tax Implications

Contract Tax Treatment

If you maintain tax home:

• Housing stipend: Tax-free
• M&IE stipend: Tax-free
• Only hourly wages taxed
• Effective tax rate: ~15-20%

Per Diem Tax Treatment

• All income taxable
• No stipend structure
• Effective tax rate: ~25-30%
• May deduct business expenses (limited)

Flexibility Analysis

Contract Constraints

• Committed for 13 weeks
• Schedule set by facility
• Cancellation has consequences
• Less ability to take time off

Per Diem Freedom

• Work when you want
• No minimum hours
• Can decline shifts
• Take off weeks easily
• Multiple facilities simultaneously

Benefits Comparison

Contract Benefits

Typically available:

• Health insurance (Day 1 at many agencies)
• 401(k) with match
• CEU reimbursement
• License reimbursement
• Travel reimbursement

Per Diem Benefits

Often not available:

• No health insurance
• No retirement match
• No reimbursements
• Must self-fund everything

Cost to replicate contract benefits:

• Health insurance: $400-600/month
• Retirement: Self-funded (no match)
• CEUs: $500-1,000/year
• Total: ~$6,000-9,000/year

Who Should Choose Contract

Ideal for:

• Primary income earners
• Those needing benefits
• Nurses who like stability
• Building travel experience
• Wanting to explore locations

Best situations:

• New to travel nursing
• Have tax home for stipends
• Want guaranteed income
• Need health insurance

Who Should Choose Per Diem

Ideal for:

• Secondary income
• Maximum flexibility needed
• Already have benefits (spouse)
• Live in high-cost area
• Semi-retired

Best situations:

• Supplementing partner’s income
• Testing travel nursing
• Busy season only
• Special life circumstances

Hybrid Approach

Many experienced travelers combine both:

Strategy 1: Contract + Per Diem

• Take 2-3 contracts/year
• Fill gaps with per diem
• Best of both worlds

Strategy 2: Per Diem in Home Area

• Contract in desirable locations
• Per diem locally between contracts
• Maintain continuous income

Strategy 3: Seasonal Mix

• Contracts during peak season (higher rates)
• Per diem during slow season (flexibility)
• Optimize throughout year

Decision Framework

Choose Contract If:

• Need consistent income
• Want tax-free stipends
• Require health insurance
• Building travel career
• Prefer stability

Choose Per Diem If:

• Have benefits elsewhere
• Need maximum flexibility
• Supplementing other income
• Live in expensive area
• Testing travel nursing

Consider Both If:

• Experienced traveler
• Variable schedule needs
• Want to maximize earnings
• Comfortable with complexity

Key Takeaways

• Contract typically pays more when tax-free stipends factor in
• Per diem offers unmatched flexibility
• Benefits add $6K-9K/year in value
• Hybrid approaches work for experienced travelers
• Your personal situation determines best choice
• Both have a place in travel nursing strategy