Travel Therapy Stipends Explained
A travel therapy stipend is a payment for housing, meals and incidentals while you work away from your tax home, and the IRS leaves it out of your taxable wages when it is at or below the federal per diem rate for the area. GSA sets those rates for each area of the continental United States, with a standard rate covering most of it, while the Defense Department sets them for Alaska and Hawaii.
How Stipends WorkWhat Are Travel Therapy Stipends?
When you work as a travel therapist, your total compensation is split into two main components: a taxable hourly wage and non-taxable stipends. Stipends are designed to reimburse you for the duplicate living expenses you incur while working away from your permanent tax home — things like temporary housing, meals, and incidental costs.
Because these stipends are tax-free (when you qualify), they significantly increase your take-home pay compared to what you'd earn as a permanent employee at the same hourly rate. This tax advantage is one of the primary financial benefits of travel therapy.
How it works: The facility pays your agency a single rate for each hour you work. The agency takes its margin, and the remainder becomes your total pay package. The agency then divides that package between your taxable hourly wage and your non-taxable stipends. The more of your package the agency can legally structure as stipends, the more you take home.
The Three Main Stipend Components
Housing Stipend
The largest component of your non-taxable pay. This is meant to cover your temporary lodging while on assignment. The GSA lodging rate for the area and fiscal year sets the ceiling: the standard rate anywhere in the continental US without its own listed rate, and a higher listed rate in higher-cost cities. GSA publishes each rate on its per diem rates page, by city, state or ZIP code. This site lists them by state. What an agency actually offers sits at or below that, and is not published anywhere, so ask for the figure in writing.
Meals & Incidentals (M&IE)
A daily allowance for food and other small expenses while you're away from your tax home. M&IE rates are set by the GSA and vary by location. The daily rate for the contract's location comes from GSA's M&IE table for the fiscal year, and the weekly amount follows from it. Alaska and Hawaii are outside the GSA CONUS tables and are not benchmarked here.
Travel Reimbursement
A one-time or per-assignment payment to cover the cost of getting to and from your assignment location. This may cover gas, flights, or mileage. Amounts vary by agency and are not set by any published schedule, so ask what the travel allowance is before you sign.
Who Qualifies for Tax-Free Stipends?
Not every travel therapist automatically qualifies for tax-free stipends. The IRS has specific requirements you must meet:
You must maintain a tax home. This means you have a permanent residence where you pay rent or mortgage and maintain financial ties. It's the place you return to between assignments — your "home base." With your tax home in place, the next step is an offer that shows which part is stipend: Find my next contract.
Your assignment must create duplicate expenses. You're paying for housing at your tax home AND separate housing at your assignment location. This duplication of expenses is the fundamental reason stipends exist.
Assignments must be temporary. In the words of IRS Publication 463: “Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less.” And for an assignment that is not: “If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called “travel allowances” and you account to your employer for them.”
You must be traveling away from home. Publication 463 sets no distance in miles. In its words: “You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day’s work, and You need to sleep or rest to meet the demands of your work while away from home.” Where the “fifty-mile rule” comes from, and what the IRS tests instead: is there a fifty-mile rule?
Critical warning: If you don't meet these requirements, your stipends are taxed as wages. As IRS Publication 463 puts it: “Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay.” When in doubt, consult a CPA who specializes in travel therapy taxes. Visit our tax guide →
Maximizing Your Stipends
Smart travelers know how to make the most of their stipend structure. A few key strategies:
Choose your housing wisely. If you find a furnished room that costs less than your housing stipend, you pocket the difference tax-free. Many travelers use Furnished Finder, Airbnb, or roommate situations to keep housing costs well below their stipend amount.
Ask your recruiter for a full pay package breakdown. You deserve to see every line item in writing — hourly rate, housing stipend, M&IE, travel reimbursement. If any component seems low compared to the GSA per diem rates for your assignment area, ask why and whether it can be adjusted. A travel therapy pay calculator can help you model how the hourly-versus-stipend split affects your take-home.
Compare stipends across written offers. Each agency splits what the facility pays between your wage, its margin and your stipends in its own way, so set the stipend lines of each written offer side by side before you choose.
Understand the GSA rate for your location. The General Services Administration publishes per diem rates for the continental US: a rate for each listed area and a standard rate everywhere else. These rates set the maximum non-taxable amounts your agency can pay. Knowing the GSA rate for your assignment gives you leverage to ensure your stipends are competitive. You can also see how overall pay differs from market to market in the Travel Therapy Pay Index.
Frequently asked questions
When is a travel assignment temporary for tax purposes?
In the words of IRS Publication 463: “Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less.”
What if my assignment is indefinite?
And for an assignment that is not: “If your assignment is indefinite, you must include in your income any amounts you receive from your employer for living expenses, even if they are called “travel allowances” and you account to your employer for them.”
How far from home do I have to be?
Publication 463 sets no distance in miles. In its words: “You are traveling away from home if: Your duties require you to be away from the general area of your tax home (defined later) substantially longer than an ordinary day’s work, and You need to sleep or rest to meet the demands of your work while away from home.”
What if I don't qualify for tax-free stipends?
If you don't meet these requirements, your stipends are taxed as wages. As IRS Publication 463 puts it: “Your employer will combine the amount of any reimbursement or other expense allowance paid to you under a nonaccountable plan with your wages, salary, or other pay.”
What sets the ceiling on a housing stipend?
The GSA lodging rate for the area and fiscal year sets the ceiling: the standard rate anywhere in the continental US without its own listed rate, and a higher listed rate in higher-cost cities. GSA publishes each rate on its per diem rates page, by city, state or ZIP code.
What should I do if a stipend on my offer looks low?
If any component seems low compared to the GSA per diem rates for your assignment area, ask why and whether it can be adjusted.
Explore More
Find Travel PT Assignments
Free and confidential. Tick the text box and a recruiter texts you right away. A recruiter emails you about your request.