Are you a travel nurse wondering if agency bill rates should matter to you? Or perhaps you are wondering what bill rates even are? You are not alone! We surveyed travel nurses across the country and found that only 58% were familiar with agency bill rates and less than 20% understood how bill rates are formulated. While we found that most travel nurses have heard of bill rates, very few completely understand what they are and what goes into them. By understanding billing rates, you can have better control over your income and make informed decisions when choosing assignments. Read on to discover why understanding bill rates is crucial for your success as a travel nurse.
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Introduction to Bill Rates
As a travel nurse, you are likely familiar with the term “bill rate.” But what does it really mean?
Simply put, bill rates are the hourly rate that a hospital or other medical facility pays a staffing agency for your services. This rate differs significantly from your take home “pay rate” and can seem significantly higher at first glance. This is because the bill rate includes additional costs like taxes, agency recruitment fees, benefits, malpractice coverage and workers’ compensation insurance – basically any additional costs associated with the position.
Benefits of Knowing the Bill Rate for Your Assignment
All travel nurses know their assignment pay rate, but most nurses are in the dark about their bill rate. While you may think “well it’s not my pay, so I don’t need to know it,” there are many benefits to learning your bill rate and how it is calculated. For one, it allows nurses to know exactly how much they will be paid for their work including the costs of the benefits and stipends they are receiving each week. This helps them budget their finances and plan for their future. But also, knowing how the bill rate breaks down allows clinicians to understand if they are being paid fairly by an agency and if there is wiggle room to further negotiate take home pay. This places more power in travel nurses’ hands and ensures that they have control over their assignment selections. Helping you be informed and educated to form a win-win relationship with your recruiter, this is what we are all about at Wanderly!
How to Find Out Your Bill Rate
Finding out your bill rate is as simple as asking your agency. They may be able to give you this information easily. If they do not want to disclose your bill rate or the full cost breakdown of your assignment, it may be because they want you to believe you are already getting the best pay rate available and limit your negotiation power. With that said, in some circumstances they may be contractually limited in how much they can disclose to you.
Regardless, just asking your recruiter for visibility into the assignment bill rate will give you better insight into their ability/willingness to work honestly with you, if their pay estimates have wiggle room, and how they stack up against other agencies hiring for the same job.
Breaking Down Bill Rates
Upon finding out an assignment bill rate many nurses can experience sticker shock – and for good reason, the discrepancy between it and their pay rate is often very high!
It is extremely important to note that while a bill rate may seem much higher than your pay rate, this does not mean that an agency is pocketing the entire difference. Much the opposite, they are covering a ton of costs on the back end – making it easier for you to get into your assignment. Let’s break down what these costs are.
Bill rate and pay rate calculations are quite complexed and require a lot of work on the agency end to get to. To start with, here is a list of variables factored into bill rate on top of a traveler’s take home pay:
Costs Associated with Nurse Pay/Benefits
- Taxable Hourly Rate
- Taxable Overtime Hourly Rate
- Housing Stipends
- Medical/Health Benefits
- Liability Insurance On The Nurse
- Travel stipends
- Housing Stipends
- Incidental Expenditures
- Orientation Hours (in many cases, aren’t billable hours)
Administrative Costs Incurred by Agency
- Payroll Loans
- Credentialing Costs
- Vendor Management System Fees
- GSA Rates
A very important callout is point #10 – payroll loans. Agencies do not actually get paid by the hospital for sometimes up to 90 after you start working. This means that agencies front your pay so that you get a check each week. While this is a massive perk to you and a great example of agencies putting your timely-pay and well-being first, it is also very cumbersome from an accounting standpoint and incurs additional loan costs by agencies to finance your paycheck.
All in all, expenses related to your benefits and hourly pay take up 60-75% of the total bill rate. On top of that, another 10% go to administrative costs. This means that an agency pockets only about 20-30% of the total bill rate. This percentage is what goes to paying their own overhead, such as credentialer and recruiter salaries, so net their profit is even lower.
After taking out all these additional costs from the hospital bill rate, an agency can then determine an assignment’s pay rate with an appropriate cut for themselves. So, an agency’s profit margin is actually significantly smaller than you may initially think when see your assignment’s bill rate.
This is clearly a lot of math, but luckily agencies have software systems and bill rate calculation sheets in place to easily input a new assignment and spit out an appropriate pay quote for you.
Leveraging Bill Rate Knowledge to Negotiating Higher Pay
Now that you understand bill rates and what goes into them, let’s talk negotiating. As a travel nurse, you are in a unique position to negotiate your pay rate. Unlike traditional nursing positions, travel nurses hired by /staffing agencies and are not bound by the same salary constraints. This gives you the flexibility to negotiate your pay rate and ultimately earn more money.
There are a few things to keep in mind when negotiating your pay rate:
1. Know Your Worth: It is important to do your research on Wanderly and know what the going rate is for travel nurses in your specialty and region. You can compare assignments side by side and determine what the highest paying pay package is for your desired location and what other agencies are paying for the same position. This will help you determine what you should be paid as well as give you a little insight into which agencies take a higher cut for themselves.
2. Know Your Priorities: It’s important for travel nurses to remember that there are other factors to consider when accepting an assignment, such as location and the type of facility, and that a higher salary isn’t always worth it if it means compromising on these other factors. Some travel nurses may feel like they’re being taken advantage of if they don’t try to negotiate for a higher rate, but others might not want to rock the boat and risk losing an otherwise “perfect” assignment altogether. Always know what is most important to you when taking an assignment and negotiate for it, even if it isn’t pay!
3. Be Prepared to Walk Away: If you are not happy with the offer, be prepared to walk away. There are plenty of other agencies out there that will be willing to pay your desired rate.
4. Don’t Accept the First Offer: Always counter offer any initial offers. Agencies expect this and will usually have some wiggle room in their initial offer. Just like any salesperson they want to make the highest cut possible from your assignment but have room to lower their fees to get you to accept.
5. Get it in Writing: Once you have agreed upon a pay rate, make sure it is put into writing so there is no confusion later on down the road.
Conclusion All in all, the benefits of understanding bill rates for travel nurses are clear. By ensuring that they understand exactly what their bill rate is and how it affects their income, nurses can make informed decisions about which assignments to take and ensure that they get the best value out of each assignment. As a result, travel nursing organizations should prioritize creating a transparent system to ensure that nurses have access to this important information. At Wanderly, it is vital to our success and extremely important to us to get you the most transparent, high paying, and quality pay package information.