How to Decide What Rates to Charge for Your Therapy Services

Deciding how much therapy costs can be challenging for even the most seasoned therapists. Counseling is a unique field. The value of your services is often seen as subjective, and many patients ask for reduced fees — but even the most compassionate therapist needs to make a living to support themselves and the long-term success of their practice.

You didn't go into the business to haggle or debate your worth, so setting private practice therapy rates might seem daunting. Whether you're just starting your private practice or are reevaluating your fees, we've put together some tips and suggestions for setting your therapy rates to support your practice, your financial security and your patient's needs.

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How to Determine if Your Therapy Rates Are Too High or Too Low

As a therapist, you need to find the sweet spot where your rates are neither too high nor too low. They must align with factors like your income goals, local rates and your level of experience. Many therapists just starting out in private practice struggle with setting a fair rate. You might feel guilty or awkward asking for higher fees, but these payments are critical in helping you serve your patients to the best of your ability.

Are Therapy Rates to High or Too Low

The basic formula for determining your therapy rates involves:

  • Your income goals: This number depends on your financial needs throughout the year, like paying off loans, buying a home and taking vacations. Decide how much money you need to make to meet these needs, and factor in other types of income, such as part-time agency work or speaking engagements.
  • Business expenses: These expenses include costs like office rent, practice management software, licensure fees and continuing education credits.
  • The number of sessions per year: To find the ideal number of sessions, consider how many clients you want to have per day. Multiply that number by the number of days per week you want to work, then the number of weeks you want to work in a year. Consider no-show rates, vacation time and holidays.

Add up your income goals and business expenses. Then, divide that number by the number of sessions you want to hold per year. This gives you the fee per session you'll need to charge to meet your income goals. Play around with these numbers to see how higher fees or fewer sessions would affect your income.

Determining Group and Couples Therapy Rates

The process is a little more complicated for therapy sessions with multiple clients. It might be tempting to simply reduce your typical fee, perhaps to 50% or a third of your usual rate. This kind of pricing, however, bases your group or couples therapy rates primarily on headcount and not on how the service you're offering differs from individual therapy.

In many cases, group or couples therapy is more valuable than individual therapy. A group session, for instance, can expose patients to more support, shared experience and different learning processes. Some evidence shows that group therapy may be even more beneficial for certain mental health disorders, such as substance abuse. Process-oriented or relationship-oriented groups are often considered more valuable than individual therapy due to the unique dynamics of the group.

To determine fees, start by identifying the value of the group. Will group therapy be particularly useful for patients with a certain condition? Or is it more oriented toward saving your patients money or reaching more people? Consider the time and effort it takes to organize groups, along with your skill level. If your experience as a group facilitator is limited, you may need to start with lower group therapy rates.

The Importance of Finding the Right Private Practice Therapy Rates

Financial security allows you to keep your practice running, offer better services and achieve a quality of life that allows you to go to work every day feeling content. Many therapists enter the profession out of compassion and a desire to help others, which can lead them to settle for being underpaid. The average salary for someone with a master's degree in the United States is $77,844, but the average salary for a mental health counselor, which typically requires a master's degree and practicum requirements, is just $35,642.

Financial Stability in Therapy Practice

Lower salaries can directly affect the likelihood of burnout. You may find yourself needing more income to support yourself or taking on more patients than is realistic to make ends meet. If you struggle with the idea of raising your fees, consider your long-term capabilities as a professional and how fair pay can help you serve your patients better and for longer. Options like sliding scales or occasional pro-bono services can allow you to meet patients in unique financial situations while maintaining the income you need.

On the other hand, if your fee is too high, it may not sit right with you. Think about what works for you and your practice. Some say that a low fee means you don't value yourself and a high fee elevates the value of the profession overall. Ignore these statements, especially if they don't align with your values.

A significant part of setting fees is identifying where your comfort level lies. Say you raise your fees. A little initial discomfort is often a good sign that you're pushing yourself to a fairer fee, but if the feeling sticks around after you've raised your fees, they might not be right for your practice. If higher fees work well for you, it's perfectly fine to keep them there. If not, there's no shame in lowering your fees and honoring your boundaries.

Determine what works for you, and remember that your worth as a therapist is not determined by your fees. You deserve pay that reflects your experience, resources, values and income goals.

Tips to Help You Decide What Rates to Charge for Your Therapy Services

You'll need to consider a wide range of factors when finding the right fees. Below are some tips to help you determine the best rates for your practice.

Identify Your Personal Income Goals

The first step in determining rates is identifying how much money you need to make to support your lifestyle. Tally up your expenses. These will include higher costs, like loans, rent and vacations, as well as smaller costs, such as your gym membership, car insurance and your penchant for attending concerts. Once you find your pre-tax annual income goal, add in the cost of taxes in your state.

Remember that, as a private practice owner, your business revenue is essentially the same thing as your personal income. It should guide your business decisions to charge fair amounts and support yourself.

Determine Your Monthly Expenses

While accounting isn't a very glamorous part of running a practice, it is crucial. Add up your business expenses, including:

  • Rent and utilities
  • Office expenses, like furniture and supplies
  • Marketing expenses, such as online ads, a professional website or directory listings
  • Practice management platforms, including your electronic health record (EHR) and billing or scheduling tools
  • Professional liability insurance
  • Legal fees, such as those for drawing up policies and forms
  • Continuing education credits

Factor in Other Sources of Income

Many therapists have additional sources of income to supplement their counseling sessions. These include:

  • Subletting your office when you're not using it
  • Supervising students
  • Performing occasional evaluations and assessments, such as personal injury or fitness for duty evaluations
  • Performing agency or as-needed hospital work
  • Teaching courses
  • Professional blogging or writing e-books
  • Holding speaking engagements

Identify your income from these sources, and include them in your calculations.

See How Similar Therapists Set Their Rates

While experience and skill will vary by therapist, the cost of living in some areas will affect the going rate for counseling. For example, therapy sessions in New York City tend to be much pricier than sessions in rural parts of the country. Do some research into the average rates for your region. Consider what other therapists with similar levels of experience or specializations charge. Some skills, like unique certifications or coursework, can increase the value of your services.

Account for Your No-Show Rate

No-shows are an unavoidable part of being a counselor. You'll need to include these costs in your overall calculations. If your no-show rate is high, you may need to increase your regular rate to compensate.

Consider How You Want to Use Your Time

As you determine the number of sessions you want to hold per week, remember to leave time for yourself. You could charge a low fee and still meet your income goals by packing your schedule with appointments, but you'll likely reduce the quality of your services and experience burnout. A higher fee allows you to see a more realistic number of patients while still meeting your income needs and leaving time for other activities.

Some of the activities you'll need to leave time for include professional tasks, such as billing, charting and professional development, and personal tasks, like spending time with family, staying physically active and going on vacation. Remember the value of downtime and allow yourself plenty of room to stay rejuvenated.

Decide Whether You Will Use a Sliding Scale

A sliding scale is a great way to offer flexibility for patients in certain financial situations. Unfortunately, it can also make some patients think your fees are negotiable. Establish a standardized sliding scale that bases rates on factors like annual income, number of dependents, disability, chronic illness or employment status.

A clear, objective sliding scale allows you to answer difficult questions about payment without reducing prices unnecessarily or creating uncomfortable situations. It can also help you avoid ethical or discriminatory issues that might appear by offering different prices without clear criteria.

Determine Whether You Will Take Insurance

The decision to take insurance can be complicated. Unfortunately, reimbursement rates are often low for mental health providers, but it's also the only way that many patients can afford services. Consider the pros and cons of taking insurance, and see what reimbursement rates you might expect from the insurance providers in your area.

Insurance can entail time-consuming documentation and claims processing and limit how you perform other services. For example, you might not be able to use a sliding scale if you take insurance, and you may have to argue for the treatment necessary to help a patient receive coverage. On the other hand, insurance can be useful for therapists new to private practice because it can help them quickly build a clientele and reach more people who need care.

If you decide to take insurance, try to optimize your billing procedures to save yourself time and money. Set aside some time to learn about submitting claims, verifying benefits, using Common Procedural Technology (CPT) codes and other insurance fundamentals. Consider an automated solution to streamline the process and integrate with your payment and practice management solutions.

Should You Accept Insurance?

Other Important Factors to Consider When Setting Therapy Service Rates

As you set your prices, keep the following factors in mind.

Client Retention

It can be difficult to get new patients through the door. Many of your patients will need ongoing care, so be sure to offer an exceptional experience and draw them back to you. Create a smooth intake process, communicate professionally and focus on building long-term relationships. Consider client-facing tools like a self-scheduling portal or online billing.

Session Frequency

A significant part of your rates depends on how many sessions you have per day. You could opt for fewer sessions with higher fees or more sessions with lower fees. The choice depends on your style of work and your capability to fill up a high caseload. Do you like to stay as busy as possible or do you prefer more downtime? Is your pool of potential clients large or fairly limited? Ask yourself these questions as you determine your caseload.


You don't need to get it right the first time. One of the perks of private practice is that you're allowed to change your rates if they turn out to be too high or too low. You don't want to change rates too often, but doing so a few times a year isn't unheard of for therapists new to private practice. You could start off low and raise them as you become more established.


Sometimes, you don't know you're getting burnt out until you're already there. Set a regular reminder to assess your well-being every so often and reevaluate whether your schedule supports your own mental health needs. Look for ways to optimize your schedule to avoid burnout and maximize your revenue.

Find Out How ICANotes EHR Software Can Help You Manage Your Practice

Find Out How ICANotes EHR Software Can Help You Manage Your Practice

However you choose to charge for your services, the right tools can help you maximize your income. Streamlined processes might reduce errors or speed up documentation, giving you more time to spend with patients. Automated billing can help you maximize reimbursements and manage flexible payment options, while patient-facing tools such as self-scheduling and payment processing can improve the experience to keep them coming back.

ICANotes is a behavioral health EHR designed to streamline all elements of running a practice. With tools for charting, practice management, billing, telehealth and more, ICANotes can help you run your practice the way you want to. Spend less time charting and billing and more time seeing patients or taking time for yourself. Reach out to us today to learn more about ICANotes, or request a free demo or free trial to see it in action.