People eager to leave their agency jobs often wonder how much should I make as a therapist in private practice. This question is tricky because it depends on a lot of variables. Some people will tell you that you can make tons of money in private practice, no matter what area you are in, if only you believe in your worth. While this thought process often helps, it’s not the only factor in how much a therapist should make in private practice.
A quick Google search tells me that the median salary for a masters level and licensed clinician is $49,000. There are a ton of sites out there that range that figure from $30,000-80,000. Most therapists in agencies report making somewhere within that range. But where does that leave private practitioners?
There are two popular ways to decide how much to pay yourself. You can do one of the following:
- Identify how much money you want to bring home every week/month/year and reverse engineer how much you’ll need to work and how much you’ll need to charge
- Start taking on clients and pay yourself a percentage of how much you are bringing in
Example #1: For a therapist who worked at an agency job and made $60,000 a year on a salary will need to factor in expenses for running a practice, self-employment taxes, health insurance, planning for vacations and all of the other things being in private practice costs. This therapist may want to make a goal of bringing in $100,000 into the business to cover their salary, taxes and expenses. With $100,000 gross income (before taxes or expenses) into their private practice, they can bring home very close to the same amount they were taking home at their agency.
Example #2: For a therapist who is just starting out and seeing clients on the side, identify a percentage of your gross income you plan giving to yourself. I highly recommend the book “Profit First”. It explains, in percentages, how much you can anticipate and plan for different expenses in your business. The basic formula for businesses bringing in under $250,000 is to pay the owner 50%, account for 30% for expenses, pay 15% for taxes and enjoy 5% of profit. You can do this at any level, whether you are just starting out or you are over the $100,000 mark.
Therapists can make a wide range of income from private practice. This will depend on the following considerations:
- How much you charge per session
- If you plan on taking insurance
- What your local market competition looks like
- If you plan on offering workshops
- Any “passive income” streams you want to have
- Growing into a group practice
- Renting out your office space when you are not using it
- Getting specialized trainings and working within your niche population
- Providing supervision to other therapists
- How many sessions per week you want to have
- How much weeks out of the year you want to work
- Any family considerations you might have, including small children or being a caretaker
Being in private practice can be a great way to have flexibility in your scheduling and income. How much you make is going to be a result of many factors that will be unique to your personal and professional situation.
** I am an affiliate on some of these products and do receive a commission. I only affiliate with companies who support the work of counselors and therapists.
Amanda Patterson, LMHC, CAP, NCC is the owner of Caring Therapists of Broward, a group practice in Pembroke Pines, Florida. She specializes in working with young adults and teens with depression and anxiety. She is the founder of “My Private Practice Tribe”, a Facebook group for therapists looking to build successful private practices. She helps therapists with business, financial and market planning. To schedule a 15-minute consultation on your private practice needs, visit her website here: https://www.amandapattersonlmhc.com/work-with-amanda/.