CPA guide • 2026 update
Understanding Blended Rates: Why Hourly Pay is Misleading
A headline “$90/hour” is often a blended rate that combines taxable pay and tax-free stipends. Without the breakdown, you can compare two offers the wrong way and lose thousands per year. This guide shows how a travel nurse blended rate calculator works and exactly how to calculate travel pay.
The Rules: IRS and Pay Structure Basics
- Blended rate ≠ taxable wage. It’s total weekly pay divided by hours.
- Stipends are tax-free only if you qualify. Tax home + temporary assignment + duplicate expenses.
- GSA limits cap tax-free stipends. Excess is taxable.
- Overtime is always taxable. It should never be replaced by stipends.
The Math: Two Offers, One Correct Answer
Assume a 36-hour contract and a 25% tax rate.
| Scenario | Weekly Hours | Taxable Hourly | Weekly Stipend | Weekly Gross | Estimated Weekly Net |
|---|---|---|---|---|---|
| Scenario A (Balanced) | 36 | $30 | $900 | $1,980 | $1,485 |
| Scenario B (Over-stipended) | 36 | $20 | $1,260 | $1,980 | $1,485 (higher audit risk) |
Takeaway: Same gross pay, but Scenario B carries more IRS risk because taxable wages are too low.
How to Calculate Travel Pay Like a Pro
- Start with weekly gross (hourly rate × hours + stipends).
- Separate taxable wages from tax-free stipends.
- Apply your tax rate to taxable wages only.
- Add the stipend back for net pay.
- Compare offers based on weekly net, not hourly.
FAQ
Is a higher blended rate always better?
No. It can mean the contract is over-stipended or includes hours you won’t work.
Can I negotiate a higher stipend?
Yes, but stay within GSA limits or the excess becomes taxable.
What’s a safe taxable hourly range?
There’s no official minimum, but many CPA firms suggest wages at or above staff rates.
Final Takeaway
Blended rates are useful for marketing, but not for real pay analysis. Use a travel nurse blended rate calculator to break down stipends, confirm GSA compliance, and compare offers based on net pay.
Estimate your net pay in minutes
Use the calculator to compare taxable wages vs. stipends and see your true take-home.