We surveyed 3,229 therapists in private practice to understand how they're doing financially. The picture is complicated — and worth understanding.
Fewer therapists reported earning less than $25,000 in 2024 (20%) compared to 2023 (29%). That's a meaningful shift. And 31% reported $100,000 or more in gross income in 2024.
After expenses, 36% of therapists took home less than $25,000 in 2023. That dropped to 27% in 2024 — a real improvement. 14% reported net income over $100,000.
34% of therapists reported an increase in net income from 2023 to 2024. That's genuine progress — and a sign that for many, the financial side of private practice is becoming more manageable.
38% of therapists earned income from sources outside of therapy in 2024. Consulting and supervision tied for first place, followed by teaching. One in five therapists has diversifying income as their top financial goal for 2025.
68% of therapists see fewer than 20 clients per week. The widely cited "sweet spot" is 20–25 clients — enough for a sustainable income without exceeding 40 hours of total weekly work. About 13% see more than 25 clients each week.
57% of respondents are the primary earner in their household — which makes these income numbers even more significant.
| License | Share | Avg. Fee |
|---|---|---|
| Psychologist (PhD/PsyD) | 10% | $216 |
| LMFT | 17% | $166 |
| Social Worker (LCSW/LMSW/LICSW) | 37% | $151 |
| Mental Health Counselor (LMHC) | 12% | $146 |
| Professional Counselor (LPC) | 23% | $147 |
41% of respondents planned to raise their fees in 2025 — consistent with the same roughly 60/40 split found in both 2023 and 2022. The majority are holding steady.
Word-of-mouth referrals remain the most common source of new clients (38%), followed by Psychology Today (35%). Social media drives only 2% of new business — which may come as a relief to therapists who've struggled to build an online following.
The average insurance reimbursement rate in 2024 was $111 — compared to the average private pay rate of $159. That's a 36% gap that self-employed therapists absorb every time they accept insurance.
Reimbursement rates vary considerably by state. Colorado averaged the highest at $180, while Florida came in at $137.
| State | Avg. Reimbursement |
|---|---|
| Colorado | $180 |
| California | $174 |
| New York | $172 |
| Washington | $158 |
| Massachusetts | $156 |
| North Carolina | $145 |
| Virginia | $148 |
| Texas | $140 |
| Pennsylvania | $146 |
| Florida | $137 |
| Insurer | Avg. Reimbursement |
|---|---|
| Aetna | $115 |
| Other | $115 |
| BCBS | $108 |
| Oscar | $108 |
| Oxford | $107 |
| United | $106 |
| Medicaid | $103 |
| Kaiser Permanente | $102 |
| Anthem | $101 |
| Medicare | $94 |
| Humana | $96 |
| Cigna | $91 |
63% of therapists who bill insurance use an online service like Alma, Headway, Rula, or Grow Therapy. Only 21% bill insurance themselves.
36% of therapists ranked rent as their biggest business expense. That's notable given that nearly half see clients exclusively from a home office, and only 2% see clients in person only. Rent still looms large — whether it's office space or a home office portion.
50% of therapists spent less than $1,000 on accounting, bookkeeping, and tax filing in 2024 — down from 59% in 2023. That could reflect rising costs, or more therapists investing in professional support.
72% of therapists spent less than $1,000 on marketing in 2024. That's consistent with last year — and makes sense, given that word-of-mouth is far and away the most effective channel.
Self-employed therapists owing more than $1,000 in annual taxes are required by the IRS to pay quarterly. Yet more than a third of respondents reported paying no quarterly taxes at all — likely resulting in penalties and interest at year-end.
About half of respondents are registered as LLCs or PLLCs. Forming an LLC opens the door to S corporation status — which can offer tax advantages for therapists earning $100,000 or more in net annual income.
4 in 5 therapists hire a professional to file their taxes. One in five completes their own return.
About half of therapists spend more than an hour per month on bookkeeping. That's at least 12 hours per year. At an average session fee of $159, that's nearly $2,000 in lost income potential annually.
41% of therapists who handle their own bookkeeping do so with spreadsheets. 42% outsource it entirely. QuickBooks is used by 14% of DIYers — while more specialized options remain underused.
Heard handles bookkeeping, taxes, and financial reporting for therapists in private practice — so you don't have to choose between your clients and your books.
Book a free consult85% of respondents said they were concerned about the financial impact of the new Trump administration on their practice. Among them, 40% described themselves as "very concerned." Cuts to federal healthcare funding in early 2025 are fueling those fears — particularly for therapists who work with federally funded organizations.
26% of therapists said they currently use AI in their practice. Whether that means documentation, scheduling, or something else entirely is still evolving — but a quarter of the field has already started experimenting.
Insurance companies continue to under-reimburse. Debt weighs on financial decisions. 85% are navigating political and economic uncertainty. And yet — new therapists keep entering the field, income is ticking upward, and one in four is already experimenting with new tools.
Three in four therapists offer sliding scale and pro bono rates. Word-of-mouth continues to be the most effective way to grow a practice. Therapists are, above all, putting their clients first — and figuring out the business side as they go.
Methodology: Heard distributed a SurveyMonkey survey through its therapist community via email and social media. Respondents were offered a chance to win one of several $250 Amazon gift cards as an incentive to complete the survey. In total, 3,229 therapists completed the survey between January 16, 2025 and February 3, 2025. Values are rounded to the nearest whole number; values ≤ 0.50% are rounded to the first decimal place.
This report is for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this report.