If you work in community setting counseling, or as an employee in a group practice, you may be wondering: could you earn more if you worked for yourself? 

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It’s an important question to answer before taking the leap and starting your own practice. Here’s what you need to know about employee therapist vs. private practice therapist incomes—how they differ, and the factors affecting your paycheck if you decide to go solo.

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Private practice therapists vs employees: earnings comparison

When it comes to private practice therapist earnings, there is not much data available to the public.

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That’s one of the reasons we launched the Heard Financial State of Private Practice Report. This annual report surveys therapists in private practice to learn more about how they run their businesses. 

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In 2025, we surveyed over 3,000 therapists. These are the earnings they reported for the 2023 and 2024 tax years:

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Keep in mind, this is revenue or gross income: the amount private practices earned before taking into account operating costs.

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The numbers for net income—earnings after expenses and taxes—are a bit different:

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Overall, 34% of respondents said their income increased between 2023 and 2024.

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In comparison, here are the average earnings for therapists working as employees, based on wage data from the US Bureau of Labor Statistics:

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On first glance, it appears employee therapists earn more than private practice therapists.

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However, the Heard Report surveyed both full- and part-time therapists. Just over half of respondents were working full-time when they completed the survey. 

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The Bureau data, on the other hand, applies only to full-time therapists. Annual wages are based on 52 work weeks per year, or 2,080 working hours annually.

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Private practices are diverse, and there are a number of factors affecting their income. It’s worthwhile taking those into account before you decide whether to start your own practice.

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Factors affecting private practice income

Five major factors affect private practice earnings, but do not typically affect the earnings of therapists working as employees:

Location

Therapists’ fees are tied to local markets. In locations where demand is high, they can usually charge more per session. Where demand is low, the opposite applies.

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Employees may have little say over whether they see clients in-person or remotely. And their physical location is tied to their employer’s practice.

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Private practice therapists, on the other hand, may choose to serve clients in multiple states via telehealth, or even move their business entirely to a location where the market is more favorable. 

Operating costs

If you run your own private practice, it’s up to you to cover operating costs like rent and insurance. These have a direct impact on the bottom line and how much you are able to pay yourself.

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Employee therapists’ salaries or wages are affected by their employers’ operating costs, over which they have no control.

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When you’re self-employed, you have more opportunities to increase your net income by building an efficient budget and reducing expenses.

Fees

Employee therapists’ fees are typically set by their employers. They may operate on a fee split, with their employer taking a percentage of their earnings.

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Self-employed therapists, on the other hand, set their own fees. You may be able to charge more per session as a therapist in private practice. And every dollar you earn goes directly to the business you own.

Variable income

If you work as an employee, particularly in community setting counselling, your employee likely manages the inflow of new clients. That could mean you find yourself overworked—but it could also mean you never have to worry about filling your client list.

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In private practice, it’s up to you to attract new clients. When there are dips in demand, or when clients leave, your earnings decrease. As a result, you may find your income waxes and wanes. You can prepare for this by setting aside emergency savings.

Multiple income streams

Therapists working as employees have income streams tied to their employers’ services. That could mean you only earn income from individual therapy sessions, while—due to the demands of your work or the terms of your contract—other income streams pass you by.

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Supervising, consulting, teaching, speaking, publishing—these are just a few of the ways private practice therapists earn an income outside the office. And these diverse income streams help them build more resilient, flexible practices.

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For a deeper dive, check out Therapist Income Benchmarks: What to Expect in Private Practice.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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Bryce Warnes is a West Coast writer specializing in small business finances.

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