How to Determine the Fair Cost of Therapy

As a private practice owner in the mental health field, I’ve heard so many perspectives on how to run my business—on everything from the cost of therapy to how many clients I should take on. Everyone has an opinion. 

Currently, a popular narrative is that we should be ensuring that the cost of therapy is “accessible” to our clients and that, as therapists, it’s our responsibility to meet the financial constraints of all therapy-seekers. 

But where does this leave those of us in this field who don’t come from generational wealth and are drowning in student debt? (Looking at you, Millennial therapists.) 

The reality is that a private practice is a business and private practice owners are business owners. Therefore, our private practice salaries need to be financially sustainable.

Why therapists struggle with charging higher rates

Therapists may struggle with charging higher rates for many reasons, including: 

• Unclear business and professional boundaries 
• Unresolved issues with money 
• Indoctrination through certain training programs
• Allowing guilt to make business decisions 
• Imposter-syndrome   

When we enact codependent dynamics, by assuming the role of rescuer, over-empathizing, acting on countertransference, or undermining our needs or worth,  we ensnare our clients in that pattern as well—modeling unhealthy relationships and harming the therapeutic alliance. 

The old adage, “You can only take your clients as far as you’ve gone” absolutely applies to the parallel processes of creating healthy boundaries in business practices and client relationships. 

The better we care for ourselves, the stronger a model we provide our clients—inviting them to do the same boundary setting and self-work within their own lives. 

Argument in favor of charging premium rates

Setting premium rates to support a viable therapist salary is something that all therapists should consider instilling in their business. Yes, budgeting is important, but you are running a business—and a business needs revenue. 

Despite the current narrative, we are not meant to struggle just because we chose to enter a helping profession. For many other medical professionals, higher rates are fixed and unchallenged. So, why isn’t this standard practice for therapists? 

Higher rates allow you to structure your business the way you want versus how you feel you need to. 

For example, if you have to see upwards of 20 to 30 clients a week in order to feed your family, then chances are you aren’t able to practice work-life balance or incorporate any creativity into your practice (i.e., build an authentic therapy brand, offer additional workshops and services, specialize in clinical modalities, or expand your practice). 

This may lead to burnout or resentment toward your sliding scale clients. Maybe your dream workday includes seeing a handful of clients, working on a writing project, and taking the afternoon to get a massage before picking your kids up from school.

Think about the parallel process here. As you are tending to yourself more consistently, you are pulling your client along for the ride and modeling behaviors that reflect self-worth, confidence, boundaries, and professionalism. If we can only take our clients as far as we can go, then setting premium rates can help set them up for deeper success in therapy. 

Have you ever noticed that you’re drawn to certain people in your life? And that those people are usually those who are passionate and infectious with their energy? The same concept applies to how we as therapists set the stage for our clients to grow and thrive. Our joy can inspire our clients.

Lastly, when a client is paying a premium price for a service, they are showing up differently and more actively in the process.

They are hungry and ready to make an investment in themselves and in their journey. Clients are much more likely to make behavioral changes outside of therapy when they are acutely aware that they are making a significant investment in themselves each week. 

3 critical factors to determine the cost of therapy in your practice

While I believe raising your rate is something that every effective therapist should consider from time to time, clinicians need to consider certain factors before deciding when to raise their rates. 

Prior to raising rates or determining a new therapist salary, I advise all my therapist coaching clients to evaluate their skill set, purpose, and the current market. 

Here’s how to evaluate each of these three factors: 

1. Your skill set

It can be difficult to evaluate your effectiveness and skills as a therapist, but you can start by looking at your retention rates.

Generally speaking, do you retain your clients for a significant period of time? Are they completing their treatment goals prior to discharge or committing to a specific time-frame? 

If not, are you getting ghosted consistently after a first session or consultation calls? 

This can swing the other way too—so it’s important to see if your clients are staying for years and not making significant progress toward the change they sought services for in the first place. 

The only way to look at this objectively is to track data. Creating a spreadsheet to track incoming leads, conversion to clients, duration of treatment, and whether goals are being met is a good place to start.

Next, check in with your clients.

Are they getting what they need from the therapeutic process? 

You can do so by implementing measurement-based care (MBC) in your practice. This can include tracking client symptoms by regularly administering clinical assessments, or sending surveys to collect client-reported feedback on their therapy. 

I send a survey to my clients annually, which I let them know about  during the intake process. 

For example, on your intake forms, you can include a note that says something to this effect: “I use data to inform my clinical practices, training, policies, and any pivots that need to be made based on my clients’ needs. To that effect, you will receive an email once a year from me to check in with you regarding your experience within my practice. This survey is anonymous and helps me ensure I’m providing the highest quality of care. Please note, your response is not a requirement to continue working with me.” 

2. Your reason “why”

If you don’t have a reason for why you want to charge a premium rate, you may feel sleazy about increasing your rate. 

Weaving purpose and transparency into business decisions helps support clinicians in getting over the guilt that inevitably shows up when considering raising rates.

There is a reason that therapists tend to charge lower rates, and typically, it has a lot to do with accessibility, which may be tied into the mission behind their business.

What if part of the mission of your business was not only to support your clients, but also to support living a life where your needs were met? 

When we understand our “why,” it’s much easier to understand that we aren’t horrible people for wanting to enjoy our lives and our careers. 

A fair rate isn’t inextricably tied to what the general population can pay. There will always be someone who can pay a certain amount if you are helping them with a problem they deem to be worth the cost.

A fair rate has everything to do with whether or not you are tending to the costs associated with your business, your personal life, and if you are providing effective services for your clients.

For example, I encourage my coaching clients to not just consider rent in their overhead costs, but many other costs, such as: student loan payments, miscellaneous office materials (paper, pens, water for clients, etc.), training, professional memberships, marketing expenses, business coaching, personal therapy, bodywork, accountant fees, legal fees necessary to run a business, housing, childcare, groceries, personal debt, retirement planning, and more. 

Clients aren’t just paying for your time—they are also paying for all of the behind the scenes things that go into keeping your business running and meeting your personal needs.

If you haven’t put in the work to look at your numbers and effectively budget, you may be arbitrarily increasing rates to a figure pulled out of thin air, which will feel grimy. 

If accessibility is important to you, there are many other ways to increase access that don’t require you struggling to pay your bills. 

You can choose to lobby insurance companies for fair compensation, donate to community mental health agencies, get involved in community organizations that are making a meaningful difference, or create an online presence where you offer free or low-cost psychoeducation resources. 

3. Viable market niche 

People won’t typically pay top dollar for a generalist. 

Instead, people tend to pay premium rates for clinicians who are solving specific problems, have experience treating specific groups of people or symptoms, or have extensive expertise in a specialized clinical practice. You want clients to pull up your website and say, “Oh, that’s me!” or “That sounds like what I need!”

My coaching clients often fear turning people away with specific marketing, but I always remind them that we want to turn clients away who aren’t our ideal clients. By creating an authentic therapy brand, you create space for people in your niche to find you.

How to raise your rate

If you’ve ascertained that you’re a solid candidate for charging premium rates in your practice, there are only a few additional steps you need to take to move forward with setting your new rate. 

First, you want to determine what your premium rate will be. Again, this should take into account your business and personal needs. 

After you’ve determined the rate you will be charging, it’s time to tell your clients about your rate change. There are two different scenarios where you will be telling your clients about your rate. The first is with new clients and the second is with current clients. 

If you’re telling new incoming clients about your rate, I recommend being upfront on your website, consultation calls, and during intake. 

Using a straightforward script is great for consultation calls. For example, you can say: “Currently, my rate is [amount]. Let me know if that doesn’t work for you and we can discuss referrals. The most important part of this process is that you feel comfortable with whoever you move forward with, even if that isn’t me.”

During your initial intake, this could sound like: “My current fee is [amount]. I raise my rate once a year, but reserve the rate to adjust it throughout the year if needed. You will always have at least three months notice so that we can process anything that may come up with that adjustment.”  

The conversation around raising your rate with current clients is always more anxiety-provoking—at least the first time you raise your rates. I advocate for giving your clients three to six months notice before any change actually goes into effect. 

If you’re raising rates more than $50 per service, it’s worth considering grandfathering your current clients in without charging them the new rate. 

This is an ethical way to ensure continuity of care for your current clients and tending to your needs.

For the conversation itself, I encourage clinicians to start a session with the news. 

A statement like this allows you to deliver the news directly, while also attending to your client’s reaction: “Today we have a bit of admin to cover before we get started. Starting [date], my rate will be increasing to [amount]. As you hear me saying my rate is increasing, what shows up for you?” 

After a session, it’s important to make space to process your own unfinished business that may be showing up after announcing your rate increase (i.e., desire to rescue, shame in taking care of yourself, fear of rejection, or losing clients). You may decide to process this with your own therapist, a trusted colleague, or a business coach. 

Remember, you are worthy of gentle rest

My biggest argument for charging premium rates as a therapist is that we are worthy of gentle rest. Helping others doesn’t equate to martyrdom. 

The mental health crisis will not be solved by burning out this generation of therapists, but our field will continue to lose a significant number of clinicians if something doesn’t drastically change. 

However you decide to implement it, I hope you are infusing your business with self-love, self-care, courage, and are practicing what you preach.

Your business is your canvas, you are the artist, and this world needs you to create the business of your dreams.

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