To fully understand the financial benefit of traveling therapy we need to first understand the math behind the salary of a full-time physical therapist. Especially someone just starting out. I’m going to use my own math for this example, but understand, that my situation may be different than yours based on setting, location, and experience.
To start, according to Payscale.com, the average entry level physical therapist makes around $66,830 before taxes. This is below my state of MN, but above other states I have worked in such as MA. I still don’t understand how you can afford the cost of living, pay off your student debt, and start out making that little in Boston. I was in shock when my colleagues shared this with me. I digress.
My First Job
Background: Outpatient orthopedic physical therapist, new graduate, in Minnesota, May 2017
Taxable Income: $71,000
- Social Security: $71,000 x .062 = $4,402
- Medicare: $71,000 x .0145 =$1,029.50
- Federal Income Tax:
- $9,325 x .10 = $932.50
- $28,635 x .15 = $4,293.75
- $33,050 x .25= $8,206.50
- Total: $13,488.75
- Minnesota Income Tax:
- $25,390 x .0535 = $1,358.365
- $45,610 x .0705 = $3215.50
- Total: $4573.87
- Total Taxes: $23,494.12
Income (after taxes): $47,505.88
My First Contract
Background: Outpatient Orthopedic, ½ year of experience, in South Carolina, Jan 2018
Taxable Income (extrapolated to a full year): $41,600
*Comparing taxes to 2017 (apples to apples)
- Social Security: $41,600 x .062 = $2,579.20
- Medicare: $41,600 x .0145 =$603.20
- Federal Income Tax:
- $9,325 x .10 = $932.50
- $28,635 x .15 = $4,293.75
- $3,650 x .25= $912.20
- Total: $6,138.45
- South Carolina Income Tax:
- $527.40 + ($26,500 x .07) =$2,371.90
- Total: $2,371.90
- Total Taxes: $11,692.75
Income in tax free stipend (extrapolated to a full year): $32,864
Income (before taxes): $74, 464
*Not including overtime pay, travel stipends, and licensure stipends
Income (after taxes): $62,771.25
Total Take home difference: $15,265.37
This was also before I knew how to negotiate contracts and was by far my worst reimbursement I have received since I started traveling. Not to mention, I was able to live in an extremely low cost of living location in SC, but let’s not get into that yet.
My Next Contract
Background: Outpatient orthopedic physical therapist, 1 yr experience, in MA, May 2018
Taxable Income (extrapolated to a full year): $57,720
*Comparing taxes to 2017 (apples to apples)
- Social Security: $57,720 x .062 = $3578.64
- Medicare: $57,720 x .0145 =$836.94
- Federal Income Tax:
- $9,325 x .10 = $932.50
- $28,635 x .15 = $4,293.75
- $19,770 x .25= $4942.50
- Total: $10,168.75
- Massachusetts Income Tax:
- $57,720 x .051 = $2,943.72
- Total: $2,943.72
- Total Taxes: $17,528.05
Income in tax free stipend (extrapolated to a full year): $42,583.82
Income (before taxes): $100,303.32
**Not including overtime pay, travel stipends, and licensure stipends
Income (after taxes): $82,775.27
Total Take home difference: $35,269.39… DAMN!
Just think if I picked a state without an income tax in it???
Home health or SNF example
As I know, others are much smarter or financially wise than me and often work in a SNF or home health setting. Here is a real example I took from one of my countless emails I receive weekly.
Background: SNF, New Hampshire (yes, I picked an assignment in a state without income tax on paychecks)
Taxable Income (extrapolated to a full year): $87,360
*Comparing taxes to 2017 (apples to apples)
- Social Security: $87,360 x .062 = $5,416.32
- Medicare: $87,360 x .0145 =$1,266.72
- Federal Income Tax:
- $9,325 x .10 = $932.50
- $28,635 x .15 = $4,293.75
- $49,410 x .25= $12,352.50
- Total: $17,578.75
- New Hampshire Income Tax:
- None
- Total: $0
- Total Taxes: $24,261.79
Income in tax free stipend (extrapolated to a full year): $54,236
Income (before taxes): $141,596
**Not including overtime pay, travel stipends, and licensure stipends
Income (after taxes): $124,017.25
Total Take home difference: $76,511.37… And In thought I was doing okay…
If this didn’t open your eyes to the financial power of traveling therapy, I’m not sure what will.
*Remember, this would be working straight through without taking any weeks off between assignments or days off.
*But also remember this is without completion bonuses, earned sick time that can be paid out (in certain states), travel stipends, licensure stipends, or overtime pay.
Traveling healthcare, whether you are a physical therapist, occupational therapist, doctor, CNA, or any other of the numerous medical professions, is a great tool to get you out of debt, and well on your path to financial freedom or or on track with any of your other financial endeavors.
I don’t plan to work forever, and traveling therapy offers me the fastest track to reach my financial goals.
As always, feel free to reach out here with any questions or to talk to me about my traveling company. I’d love to set you up with one of my awesome recruiters.
