How to Set Private Practice Fees → Private Practice Income Calculator [2026 Update]
Takeaway
As therapists, we don’t get much training in how to set private practice fees. However, this is an important business decision that takes careful consideration. In this blog post, I’ll share some key factors to consider when setting your private practice fees.
Plus, you can use my private practice fee calculator to find a fee that will provide a sustainable income for your financial well-being.
There are tons of factors to consider when setting your session fee. The good news is that you're going to learn a fee-setting method that you can use throughout your entire career as a therapist. You'll always know exactly how many clients to see, what to charge per session, and whether you can support a sliding scale without compromising your financial goals.
And if we haven’t met yet, hello! 👋🏻 I’m Felicia, the Bad Therapist©. I’m a business coach who helps therapists make more money and impact in their practices without sacrificing their values and pleasure.
Why private practice therapists need to be intentional about fee setting
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Don't get me wrong. Your friend is great. But your life is not their life. Their expenses aren't your expenses. And their financial goals aren't yours. When you set fees for your therapy services, don't spend the weekend Googling the current market rate. What works for other therapists won't automatically work for you. Or decide to charge what their group practice was charging. (Now they get to keep it all so that should be enough, right?)
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Don't ignore important factors like quarterly taxes, health insurance, and your financial goals. If you do, you're headed for a world of hurt that no amount of "self-care" can solve. While you can navigate temporary financial rough patches, they shouldn't be the norm. A therapy practice with a stressed therapist and inadequate funds will lead to resentment, poor work quality, and other issues.
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When you're struggling to pay your rent and your client talks about saving to buy a home, how do you feel? If you can't be happy for them because all you can think about is how you just said yes to two new clients because your student loan payments are starting again, then you are undercharging them. Your fee should be a reflection of what you need to enjoy your life and feel joy for others enjoying theirs. As private practice therapists, it is our job to set fees that ensure we won't put our clients in a position where we would resent them.
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A lot of mental health clinicians in private practice deal with not making enough money by adding a new therapy client and taking fewer weeks off. This is only a temporary solution to a much bigger problem. Ultimately, there are only a certain number of sessions per week a therapist can do. At some point, another lever is going to have to be pulled and that lever is the fee.
By increasing your hourly rate, you could see fewer clients, have more income, and still have a sliding scale or be on insurance panels. I'm going to walk you through exactly how to do that by using my private practice income calculator.
Steps for setting your rate
Many factors go into fee setting. You'll need to decide how much money you want your practice to earn, how many clients you want to see each week, how many weeks you'd like to take off, and what your cancellation policy is. (See my blog on how to create a cancellation policy for guidance on this.) Once we have those numbers, we'll work backward to find out exactly what your full rate needs to be. Make sure to have your own copy of The Bad Therapist® Magic Sheets handy so you can fill it out as you read this. You can get the Magic Sheets for free by clicking the button below.
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This is a highly underrated step in the process of setting your fee.
We’ve all got stories about money and self-worth. And therapists have the added baggage of good therapist conditioning. Left unchecked, our money stories can impact our decision-making.
Here’s a personal story about my own money mindset. When I was a kid, we’d go to the store to buy clothes. My mom didn’t make a lot of money, so we always headed straight to the sale section, never pausing to look at anything else. I’d pick out some things I liked but if we stayed there long enough, I’d put everything back. I had a black shirt already. I didn’t really need another one.
So, what does this have to do with setting my fee in my private practice?
Well, I don’t need to pay off student loans that fast. I mean I could carry that debt for years. Right? Plenty of people do. Who do I think I am to want that? Why should I pay off that debt faster than anyone else? My clients need their money too!
Here are a few journaling prompts to assess your money mindset.
What is your story around money, value, worth, and having?
Where does this story come from?
What are your beliefs about money and stability?
What do you want even if a part of you thinks it’s silly?
Answer these questions honestly. Come back to them from time to time whenever you're feeling stuck around money.
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Most therapists factor in our current expenses, like our EMR and quarterly taxes, when considering how much income we need to make. But, most therapists don't realize how important it is to include their "desired expenses." These are all the things you'd like to spend money on if you had it. This could be saving for a home, larger payments on your student loans, an extravagant vacation, or the ceramics class you've wanted to take for ages.
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Imagine that you could see exactly as many clients per week as you want to see—no more, no less—and that you could make exactly what you need and want to make. When therapists first start their practice, they base their caseload on past experiences. Often, this is in an agency or group practice where they were overworked and underpaid. Remember, in private practice, you'll need time outside of sessions to attend to other aspects of your business. Plus, this is your business. You should make it a great place to work. Go here for a deep dive on how many clients to see and some sample practice schedules.
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How many weeks per year would you like to take off for vacation and give yourself leeway for sick time? If you have no idea where to start, chose 10 when doing the math to set your fee. Remember you are creating a business designed for you. Create one that you'll love working in. When fee setting, it's better for this number to be larger because it ensures that you can take up to that amount of time off each year and still hit your income goals. If you don't use all your vacation/sick time, that just means your income will be higher.
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This is the factor nearly all therapists fail to consider and it is one of the most important. Not only for determining your therapist fee but for ensuring your income and schedule are consistent and predictable. Private practice therapists who lack a clear and consistent cancellation policy risk an unpredictable loss of income. I wrote a whole blog on this which includes a cancellation policy template. Check it out!
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52 weeks minus the number of vacation and sick weeks (10) and the number of free missed sessions per client (4) = The total number of weeks you will be working (38).
Multiply that by the total number of clients you want to have on your caseload (12).
38 x 12 = 456 (the total number of sessions you will do in a year).
$150,000 (the total amount of money you'd like your business to bring in)/456 (the total number of sessions in a year) = $330 per session or if you wanted your business to bring in $200k, you would need to charge $440 per session.
Using The Bad Therapist® Magic Sheets you can easily alter factors like the number of weeks off, cancellation policy, number of clients, and the impact of taking insurance or adding or removing your sliding scale. I did the math for you to make it fun and easy to design your practice. Because I'm a total spreadsheet nerd, you can even do a side-by-side comparison of what your current practice brings in and what it could bring in if you made some changes.
How to set your sliding scale fee
Though private practices aren't required to offer sliding-scale therapy services, many therapists want to offer them as part of their values-based private practice. By doing the math above, you will determine what your average fee per session needs to be. To hit your income goals, you can offer fees above and below that amount as long as your fee averages to the number you got from your calculations. You may be surprised to discover that your current rate is too low, especially if they are insurance providers. You may even find that your full rate is actually a sliding scale rate and that your fee needs to increase significantly.
Example client vignette
One of my clients was feeling nervous about charging a higher rate. They needed to earn more money but couldn't add many more sessions per week to their schedule. When we did the math, we saw immediately that their average fee was much too low to ever hit their income goals. They simply couldn't add enough new clients to earn what they needed to pay their expenses. They quit agency work and started their own practice to improve their quality of life while doing what they loved. This therapist realized that they had unwittingly created the same working conditions they wanted to escape.
Their solution was to allow old clients to stay at their current rates while increasing their new hourly rate to increase their average fee. They also realized they could only take a certain number of clients using insurance. New clients paid a much higher rate to compensate for this therapist accepting low rates from old clients.
The most important thing when creating a sliding scale is to ensure that you make decisions that put your well-being first. This will also prevent resentment toward your clients.
How to heal your money mindset
Remember step one in this process? It’s about checking your money mindset, and if you’re anything like most other therapists, you likely have some healing to do.
When you think about getting to have, wanting, and worth, what memories come up? Get to know these stories and beliefs so you can see when they are influencing how you are making decisions now. This is a process that will likely unfold throughout your life. You have your whole life to learn what these stories are and get free from them.
You don’t have to choose between having an aligned private practice and being broke or making a lot of money and having a heartless practice. You can make a lot of money and run a business that is values-based.
So get to know your stories. Mine your memories so you can see they are impacting your current decisions. When you know they’re there, then you have an incredible opportunity. You can make new choices. If you are ready to go deeper into healing your money mindset, join my free Facebook group, Healing Money. You can also take my free course on money mindset for private practice therapists. Go here to join.
Does setting new private practice fees feel out of reach? I’m here to help.
I get it. You probably didn't become a therapist because you dreamed of being an entrepreneur. You also didn't get any training in finance, marketing, or office administration in grad school. But here you are, striking out on your own and you deserve to have support every step of the way.
Did you do the math and discover that your fee needs to be much higher? Are you scared imagining telling potential clients what your new hourly rate is? Do you worry that new clients would never agree to that cost per session? Are you unsure of how to talk to your old client about raising their fee?
Working with a therapist business coach can help. As a private practice therapist, you have tons of decisions to make and changes to implement. One of the benefits of working with a private practice business coach is that you don't have to do it alone. You get expert advice and support to ensure that you follow through with important changes and finally prioritize your own self-care. It's time that you started valuing your own time and services more highly. I've worked with therapists all over the country to help them dramatically raise their fees, get off insurance panels, and institute sliding scales that ensure both they and their clients are taken care of. Join my signature program Liberated Business, apply to be a one-on-one client, or register for my next retreat or CEO Day. Learn more in the Work With Me section of my website.
