How much do private practice therapists make? That’s an important question to answer if you work for somebody else’s practice and you’re considering going solo. But it’s just as important if you already run your own practice.
Knowing typical income benchmarks for therapists in private practice helps you gauge your own practice’s performance. And it can help determine whether you raise your fees, explore additional income streams, or switch to accepting cash pay only.
Whether you’re deciding if you should start your own practice or whether you’ve already taken the plunge, here’s what you can expect to earn as a private practice therapist.
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Therapist incomes from the Financial State of Private Practice Report
While comprehensive resources like the Bureau of Labor Statistics provide salary and wage data for therapists, there is very little public data about the earnings of self-employed therapists.
Partly for that reason, 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 and the challenges they face.
The 2025 Financial State of Private Practice Report surveyed over 3,000 therapists in private practice. As part of the survey, we asked therapists what they earned.
Gross income of therapists in private practice
Gross income or revenue is the measure of how much a practice earned for the year before taking into account operating expenses and taxes.
Here’s what respondents reported for the years 2023 and 2024:
Based on these numbers, we see a general increase in income from 2023 to 2024.
Net income of therapists in private practice
Net income is the measure of how much a practice earned for the year before taking into account operating costs.
Here’s what respondents reported for the years 2023 and 2024:
Net income shows an upward shift that corresponds to revenue.
That makes sense—according to the report, 34% of therapists saw their profit increase from one year to the next.
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Factors affecting private practice therapist income
Looking at the numbers from the Financial State of Private Practice Report, you can get an idea of what a typical private therapy practice earns.
But what is the difference between the therapist earning $25,000 to $50,000 per year and the therapist earning $75,000 to $100,000 per year? Are they simply seeing more clients, or do other factors play a role?
Given the diversity of therapy practices and the many different types of services they provide, there’s no hard and fast rule that determines why some practices earn less than $25,000 per year while others sit comfortably in the six digit range.
However, seven factors have a major impact:
License type
Your license type helps to determine how much you can charge for therapy.
For instance, according to the Report, average hourly fees range from $147 to $216. Psychologists are at the top of that range, while Professional Counsellors (LPC) are at the bottom.
An LPC that charges psychologist-level fees may have difficulty competing with other practices. So, to some extent, the amount you charge—and the amount you earn—can be tied to how you are licensed.
Experience
Anecdotally, private practice therapists with more experience in their field earn higher incomes.
Because of high demand, they may be able to charge higher fees. Also because of high demand, they have an easier time than less experienced therapists maintaining a full client list.
Clients may be willing to pay more to see a therapist who has been in practice for 30 years compared to one who has been practicing five years. But also:
- Over a long time in practice, a therapist may build up an extensive referral network that guarantees a steady stream of new clients
- More years practicing means more time spent on continuing education, a wider range of certifications, and the potential to treat more niches
- Word-of-mouth marketing may build momentum with time, increasing demand
The only way to benefit is to stay in practice, give your clients the best treatment possible, and continue growing your skills and referral network.
Location
Therapists are able to charge different fees depending where they are based.
For instance, Wyoming is the most sparsely populated state, while New York has the highest population density. A therapist in Wyoming is in less demand, and should expect to charge lower fees.
Local economic factors—such as how much clients can afford to pay, and whether they are covered by insurance—also plays a role.
Fees
Charging higher fees may earn you a higher income. Conversely, higher fees may reduce the number of potential clients who can afford your services.
Your hourly session fee is impacted by a number of factors—competition with other practices, experience level, location, and the operating expenses you need to cover to keep your practice running.
Insurance
Whether you accept insurance, which insurance companies you are credentialed with, and the typical reimbursement rates based on your location all play a role in determining your income.
Nearly one quarter of survey respondents said they did not accept insurance reimbursements. Going that route may result in higher earnings per session: the average hourly fee for individual therapy in 2025 was $159, while the average hourly reimbursement was $111.
But it also means potentially excluding clients who can’t afford cash pay therapy—resulting in fewer clients and lower earnings overall.
Operating expenses
Your operating expenses have a major impact on your take-home pay.
However, according to the Report, 69% of therapists spent less than $25,000 on operating expenses in 2025. (One third of respondents said rent was their largest expense.)
That suggests that, once certain baseline expenses are covered—rent, insurance, and continuing education—expenses do not increase in tandem with income.
By settling on a stable operating budget when your practice is young, you can keep your expenses low even as you onboard more clients, access new revenue streams, and raise your fees.
Business structure
Once a therapy practice reaches a certain income threshold, they can enjoy a larger net income by electing S corporation status.
In short, S corp status reduces the amount of self-employment tax you pay on your practice’s earnings. (For a deep dive, check out our guide to S corps.)
But since an S corp comes with higher operating fees than a sole proprietorship, it usually doesn’t benefit your practice to elect S corp status until you’re earning at least $100,000 per year.
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Do private practice therapists earn more than employees?
Going from working as someone else’s employee to running your own therapy practice gives you more control over how you schedule your time, how you treat clients, and how you market your services.
But does it also mean a higher income?
Here’s therapist wage data from the US Bureau of Labor Statistics:
At first, these numbers may be sobering when compared to the private practice therapist net incomes from the Report.
For example, 27% of survey respondents said they earned less than $25,000 per year, while the US Bureau of Labor Statistics shows the bottom 10% earning an average wage of $40,790.
However, just 53% of survey respondents said they worked full-time, with 21% saying they were part-time and hoping to go full-time, and 26% permanently full-time.
Since the numbers from the Bureau apply to full-time therapists, that muddies the waters somewhat.
Also, the annual incomes from the Bureau data are based on full-time employment—5 days a week for 52 weeks, or 2,080 hours a year.
Self-employed therapists rarely work standard eight-hour days. For instance, a therapist in private practice might spend Monday and Tuesday each week doing back-to-back remote therapy sessions, spend Wednesday catching up on notes, and devote Thursday morning to back office admin—and still manage to earn a full-time income.
Or they might work Monday through Friday, but only four or five hours each day. When you run your own therapy practice, you set your own hours and manage your own caseload. That gives you more flexibility—and, in the end, may help to prevent burnout.
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How to earn more money as a private practice therapist
When you run your own therapy practice, strategies for increasing your income are limited only by your own ingenuity.
But if you’ve reviewed the income benchmarks covered above and you believe you’re falling short, there are a few business moves you can start making now to increase your earnings.
Grow your client list
Most full-time self-employed therapists manage to treat 20 to 24 clients per week. If you’re seeing fewer than that, simply growing your client list may be the secret to a higher income.
That’s easier said than done. But with a little planning—and some upfront investment in marketing—you can start to see steady growth.
Learn more:
Negotiate with insurance companies
Many therapists complain that insurance companies reimburse them too little for their services. But few therapists ever negotiate for higher rates.
Try sending negotiating letters to the companies you’re credentialed with. You may be pleasantly surprised at the results.
Learn more:
Transition to cash pay
If low reimbursement rates are a real drag on your income, you may benefit more from accepting only cash pay clients.
Making the transition to cash-pay-only takes some planning, and it may mean a temporary dip in revenue. But if you do it right, you could bump your practice into a higher income bracket.
Learn more:
- How to Transition Your Therapy Practice from Insurance to Cash Pay
- How to Make Cash Pay Therapy More Accessible for Your Clients
Fine-tune your budget
Without a comprehensive budget in place, operating expenses can eat away at your bottom line. By carefully managing your budget and periodically updating it to adapt to new situations, you can enjoy higher earnings.
Learn more:
Stay up to date with bookkeeping and accounting
Bookkeeping tracks your day-to-day transactions; accounting gives you the data you need to make important financial decisions and take advantage of tax deductions.
If you’ve fallen behind on bookkeeping and accounting, take the time to catch up ASAP. A more organized financial back office will give you better insight into how your business is running and help you to build a practice that earns more.
Learn more:
- The Complete Guide to Bookkeeping for Therapists
- How to Catch Up on Bookkeeping for Your Therapy Practice
Take advantage of tax deductions
You may be leaving money on the table when you file your taxes because you’re not claiming every deduction your practice is eligible for.
A quick refresher on tax deductions for therapy practices—plus good recordkeeping—can help you pay a lower tax bill and keep more money in the bank.
Learn more:
Leverage tax credits
Particularly if you have employees, there are a number of tax credits you can claim in order to lower your tax bill. And with recent changes to tax law, those credits have become more lucrative.
Brush up on tax credits for therapy practices to find opportunities to save.
Learn more:
- The Complete Guide to Tax Credits for Therapists
- New Tax Credits and Deductions for Private Practice Owners
Automate your back office
If bookkeeping and accounting tasks have been draining your energy and eating up valuable work hours, you could save more money in the long run by having them handled by a professional. Explore options for outsourcing your backoffice admin to free up more time and energy to devote to your clients.
Learn more:
Consider S corp status
If your annual revenue is approaching the $100,000 mark, electing S corporation status now could save you thousands each year.
Consider the benefits and drawbacks of S corp status, and decide whether it’s right for your practice.
Learn more:
- The Complete Guide to S Corporations for Therapists
- How To Switch From a Sole Proprietor to an S Corporation as a Therapist
Explore alternative income streams
If you’ve maxed out your client list—or if you’re simply looking for a break in routine—then exploring alternative income streams could open the door to more earnings.
Coaching, consulting, teaching, supervising, publishing—these are just some of the ways private practice therapists diversify their income. And one of them could be your next big business move.
Learn more:
Transition to 100% telehealth
Rent is a major expense for private practice therapists—one third of survey respondents said it was their biggest.
By making the switch to a 100% remote practice, you may sacrifice a few clients. But you could also make yourself available to clientele who wouldn’t be able to visit you in person, while significantly reducing your operating expenses.
Plus, the home office deduction allows you to write off a portion of your home’s rent or mortgage from your taxes.
Learn more:
- What Therapists Need to Know About the Home Office Deduction
- How Do I Pay Taxes as a Therapist if I Have Clients in Multiple States?
Expand your practice
It costs time, money, and effort to expand from a solo therapy practice into a group practice. But in the long run it could be the key to earning a higher income. If you’ve thought about hiring other practitioners to your practice but never gone ahead with it, now could be the time to take the prospect seriously.
Learn more:
- How to Grow Your Solo Therapy Practice Into a Group Practice
- How to Build a Business Plan for Your Therapy Practice
Key takeaways
- Your therapy practice’s earnings are determined by your license type, location, fee structure, and other factors
- Self-employed therapists set their own schedules and caseloads, and you may be able to earn as much or more as a solo therapist—while working fewer hours—than you would as an employee
- Rent is among the largest expenses for therapy practices, and making the switch to a remote-only practice could help grow your bottom line
- Don’t be afraid to negotiate with insurance companies for higher fees, or even to switch to exclusively accepting cash pay clients—it could be the key to increased earnings
- Your income level may benefit from better budgeting, more comprehensive tax planning, and back office automation—consider hiring a bookkeeper and accountant to help with these
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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.
Bryce Warnes is a West Coast writer specializing in small business finances.
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