Travel and Housing on Assignment (Who Pays What)
By Cory Kleinschmidt
On most locum assignments the agency arranges and pays for travel and housing directly, but the split is negotiable. Confirm in the contract exactly what is agency-provided, what is reimbursed and what is a taxable stipend versus a tax-free payment under IRS tax-home rules.
Travel and housing are one of the real perks of locum work and one of the most misunderstood tax questions in it. The arrangement is usually generous. Whether it’s tax-free turns on a rule most clinicians have never heard of, so this guide covers both.
Who Pays for Travel and Housing on a Locum Assignment?
Usually the agency, as a standard part of the assignment. The common model is that the agency books and pays for your flights or mileage and your lodging directly, so you never front the cost. This is a contract term, not a law. It varies, so confirm it in writing before you accept.
What’s typically covered: transportation to and from the site, lodging for the duration and sometimes a rental car. What’s often on you: meals (frequently handled through a per diem, covered in per diem and stipends) and incidentals.
Agency-Arranged, Reimbursed or Stipend: What’s the Difference?
The three models differ in who pays first and how it’s taxed. The label matters less than the mechanics: a payment handled under an IRS accountable plan (you substantiate the expense and return any excess) is generally tax-free, while a flat payment with no substantiation is generally taxable income.
| Model | Who pays first | Typical tax treatment |
|---|---|---|
| Agency-arranged | The agency books and pays directly | Not income to you |
| Reimbursed | You pay, the agency pays you back | Tax-free if documented under an accountable plan |
| Stipend | A flat allowance paid to you | Taxable unless it meets accountable-plan rules |
What Is a Tax Home and Why Does It Decide If Housing Is Taxable?
Your tax home is the general area of your main place of work. It’s the hinge on which tax-free travel and housing turns. Travel and lodging are only tax-free when you’re working away from your tax home on a temporary assignment. If you don’t maintain a real tax home, the IRS can treat you as an itinerant worker, so your travel reimbursements become taxable.
Two traps to know.
The one-year rule. An assignment realistically expected to last more than one year is no longer “temporary,” so its travel and housing benefits become taxable.
The no-tax-home trap. If you don’t have a regular or main place of business, the IRS weighs whether you maintain a home and duplicate living expenses when deciding if you have a tax home at all. This is the single most important tax concept for a traveling clinician. It’s worth a CPA conversation early.
What Travel Costs Are Typically Covered?
Transportation to and from the site, lodging for the assignment and often a rental car or a mileage arrangement for getting there. Meals are usually handled separately through per diem. Get the specific list in the contract rather than relying on “travel provided”.
If you drive and aren’t reimbursed, unreimbursed business mileage may be deductible at the IRS standard mileage rate for the current year, so keep a mileage log. Look up the current-year rate at IRS.gov rather than a figure that goes stale.
What to Confirm in the Contract Before You Accept
Get four things in writing:
- What transportation is covered.
- What lodging is provided or reimbursed.
- Whether there’s a rental car.
- How any allowance is classified: reimbursement under an accountable plan, or a flat taxable stipend.
The classification in point 4 is what determines your tax bill. See reviewing a locum contract for the rest of the terms.
How This Differs for NPs, PAs and CRNAs
This is the most uniform topic in the set. The travel and housing rules and the tax-home concept are identical for every locum clinician regardless of profession.
The only variation is that higher-paid or longer assignments may negotiate different arrangements, which tracks pay band and assignment length, not profession. See the nurse practitioner, physician assistant and CRNA guides for pay context.
Key Takeaways
- On most assignments the agency arranges and pays for travel and lodging directly, but it’s a negotiable contract term, so confirm it in writing.
- How a payment is classified decides the tax: accountable-plan reimbursement is generally tax-free, a flat stipend is generally taxable.
- Tax-free travel and housing depend on working away from your tax home on a temporary assignment.
- An assignment expected to last more than one year stops being “temporary,” and the benefits become taxable.
- Unreimbursed driving may be deductible at the current-year IRS standard mileage rate, so keep a log.
Frequently Asked Questions
Does the agency pay for housing on a locum assignment?
Usually yes, arranged and paid directly, though it’s a contract term that varies. Confirm what’s provided before you accept.
Is locum housing taxable?
It’s generally tax-free when you’re working away from your tax home on a temporary assignment and the payment is handled under an accountable plan. It can be taxable otherwise.
What is a tax home for a locum?
The general area of your main place of work. Tax-free travel and lodging depend on having one and being temporarily away from it.
What happens if my assignment lasts more than a year?
An assignment realistically expected to last more than one year is no longer “temporary” for tax purposes, so the travel and housing benefits generally become taxable.
This guide explains how the rules work; it isn’t tax advice for your situation. Confirm your tax-home situation with a CPA before relying on tax-free treatment.