Make what you're worth: How to set your rates in private practice
Download a free checklist for setting and raising rates
Download free resource
Enter your email below to access this resource.
By entering your email address, you are opting-in to receive emails from SimplePractice on its various products, solutions, and/or offerings. Unsubscribe anytime.
As therapists build their practices and client lists, they may struggle with one important task: setting therapy rates.
Summary
- Calculate your required therapy rate using the formula: (Business/personal Expenses + Annual salary goal) ÷ (Weeks per year you plan to work) = (Required income per week) ÷ (Clients you plan to see per week) = Fee per session.
- Research local market rates using practice directories and competitor analysis to ensure your rates align with geographic averages while accounting for your unique specializations and experience level.
- Implement an annual rate increase strategy by including rate adjustment language in your informed consent forms and planning increases around cost-of-living adjustments (COLA).
- If necessary, establish a clear sliding scale policy that defines the exact number of reduced-rate slots available while maintaining boundaries to protect your practice's financial health.
- Create a comprehensive business expense spreadsheet that includes all costs (liability insurance, practice management software, rent, continuing education, taxes) to ensure your rates support a sustainable practice.
How to set your rates in private practice is a decision you’ll have to make based on your unique situation, so while we can’t answer that question for you with specificity, we can share insights into what therapists in your area charge for specific services.
Along with specialty, degree, and years of experience, an awareness of other therapists’ rates can help determine how to set private practice fees that are right for your business.
And, from a client perspective, your session rate may suggest a lot about your expertise and the real or perceived value of your services.
For example, if you charge significantly more than your peers, potential clients may look elsewhere. Similarly, if you charge significantly less than your peers, clients may perceive your low rate as an indication of low value.
Therefore, in an effort to help you feel confident about setting or raising rates, we created this guide on how to set your rates in private practice, including a printable checklist to help you remember every step when setting therapy rates.
Our intent is to empower you with information so you can make informed decisions when either setting therapy rates or deciding whether or not to raise your rates.
Tips for charging the rate you deserve
You’ve earned your degree, secured licensure, honed your skills, and ventured into the world of private practice.
Now comes the next hurdle. Determining the rates to charge for your services.
How much does a therapy session cost typically and how much should you charge?
This question can cause anxiety—even for experienced therapists.
You want to be paid fairly, but you may have a difficult time assigning a monetary value to the services you provide.
Jessica Improta, LCSW, a clinical social worker in private practice says she isn’t surprised therapists end up closing their doors due to financial hardships. The misleading messaging therapists receive, even during their academic training, is that the mental health profession simply isn’t lucrative.
You can make a good living, take care of yourself, and take great care of your patients by setting private practice rates that work best for the health of your business.
“The idea that ‘therapists don’t go into the profession for the money,’ is somewhat disingenuous because every therapist needs to think about money to sustain their business,” she says. “You can make a good living, take care of yourself, and take great care of your patients by setting the right fee,” she adds.
Charging a fair rate can help you:
- Avoid burnout
- Cover business and personal expenses
- Maintain a healthy work-life balance
- Offer one or more sliding scale appointments to clients in need
- Provide pro bono work if you choose to do so
Consider these three tips when thinking about how to set your rates in private practice:
Remember that you’re an entrepreneur
One question is paramount: How much revenue must you earn to cover your expenses?
Be sure to consider business expenses (e.g., rent, taxes, liability insurance, professional association memberships, continuing education, and practice management software) as well as personal expenses (e.g., student loans or a mortgage).
Calculate a total, and then add a buffer for peace of mind.
You need to ensure you earn more than this amount to maintain a profitable business.
Next, determine how many clients you want to see weekly and whether you plan to take time off for vacation throughout the year. For example, you set a goal of seeing 20 clients per week and plan to take four weeks of vacation time annually.
You can then determine your hourly rate using this calculation: (Business/personal Expenses + Annual salary goal) ÷ (Weeks per year you plan to work) = (Required income per week) ÷ (Clients you plan to see per week) = Fee per session
Improta says doing the math is ultimately helpful for setting therapy rates, as it allows her practice to thrive without leaving her vulnerable to burnout.
Determine whether your calculated rate is reasonable for your geographic area
Next, when thinking about how to set your rates in private practice, focus on your state, city, town, or neighborhood.
Therapists in urban areas, for example, may be able to charge more than their rural counterparts.
And, while asking a few local colleagues about their rates can be helpful, it may not necessarily provide a well-rounded view.
Instead, it’s best to seek a larger sample size.
In order to see this information at a larger scale, you can glean this information using a tool like the SimplePractice Monarch directory where therapists may include their out-of-pocket costs for a session.
Take a sample size of 10 or more therapists in your area and examine this data by calculating the average, median, maximum, and minimum rates. This can give you a good idea of how the rates are distributed.
Better yet, SimplePractice provides more in-depth rate data and tips for how to set your rates in private practice, including state- and city- specific average costs based on nearly 105 million sessions (both self-pay and insurance), billed by therapists nationwide in 2023-2024.
Are there any factors that can help you justify setting therapy rates that are higher than average?
Do you have significant experience or specialized training? For example, you may be able to charge more if you’re the only therapist in your area who provides eye movement desensitization and reprocessing (EMDR) therapy.
“If you can’t justify the higher rate, you may need to consider other alternatives, such as adding an additional client to your weekly caseload or supplementing your income by running a therapy group,” says Improta. Over time—and as you gain experience—consider increasing your rate.
Consider a limited sliding scale
Setting therapy rates might mean including the option for a sliding scale or other type of payment plan. Doing so allows you to take on additional clients who might not be able to afford your full rate.
Decide in advance how many sliding scale clients you can afford to take on, and stay firm with your offerings. For example, if you decide to offer a sliding scale to two of your 20 clients, don’t continue to offer this reduced rate once those slots are full.
Ultimately, setting the right rate helps you maintain a profitable practice that allows you to focus on what you do best: helping your patients.
Raising your rate: How to navigate the transition with ease
You’re in back-to-back sessions all day every day, but your profit-margin never seems to reflect the endless hours you work.
Although it’s tempting to normalize this and shrug it off as the cost of doing business as a therapist, this grueling routine doesn’t need to be your reality.
In fact, you can literally transform your business and achieve the life you want by taking one simple step: raising your rate.
There are two important reasons why therapists should raise their rates.
First, a higher rate can help support a viable business.
When you first enter the profession and are learning how to set your rates in private practice, you may set rates that are far too low in the hopes that this will attract clients. Even when business is booming, the downside is that you can quickly experience significant burnout.
Second, a higher rate offsets expenses that naturally increase as the cost of living goes up. Most companies provide annual cost of living salary increases for this purpose, and your practice should not be an exception.
But, unfortunately, therapists may tell themselves the following:
- My existing clients will leave.
- I won’t gain any new clients.
- My colleagues will perceive me as greedy.
- I don’t deserve the higher rate because my work isn’t good enough.
“It’s these conversations that therapists have internally that really prohibit them from setting a fee that’s fair—and then raising that fee on a regular basis,” says Improta.
Not sure where to begin when raising your rate? Consider these five tips to help you get started:
1. Include language in your informed consent about a potential rate increase
Stating that your rate may increase once a year gives you the flexibility to keep your rate the same or raise it annually as business expenses increase.
2. Decide when—and by how much—you’ll raise your rate
For example, will you raise it every year on January 1st, or on an annualized basis per client? This means if you start seeing a client in November, you wouldn’t raise their rate until the following November. At a minimum, consider increasing your rate to reflect the cost-of-living adjustment (COLA). In 2025, the COLA is 2.5%, according to the Social Security Administration.
3. Communicate the increase to clients verbally
For example, consider a two-month verbal notice and a three-week written notice to clients. When telling clients about your rate increase, keep it simple and straightforward.
4. Be prepared for client reactions
If clients can’t—or won’t—pay your increased rate, you need to have a backup plan. For example, can you offer a sliding scale or a package (discounted) rate for multiple sessions? Some therapists have a referral list ready, including referrals to interns as well as other therapists who are willing to provide services at a lower rate.
5. Remember that raising your rate is about building your practice and a life that works for you
You may lose one or two clients once you raise your rate, but the clients who remain will be more likely, willing, and able to pay.
Need a quick reminder about how to set your rates in private practice?
Download a printable checklist at the top of this article to refer to with steps for both setting therapy rates and raising them.
How SimplePractice streamlines running your practice
SimplePractice is HIPAA-compliant practice management software with everything you need to run your practice built into the platform—from booking and scheduling to insurance and client billing.
If you’ve been considering switching to an EHR system, SimplePractice empowers you to streamline appointment bookings, reminders, and rescheduling and simplify the billing and coding process—so you get more time for the things that matter most to you.
Try SimplePractice free for 30 days. No credit card required.