At a recent dinner party, a friend's sister and someone I just adore, shared that her therapist, "Must be raking in the big bucks charging $150 per session!" When I gently leaned into this with her, she responded, "Mari think about it, at $150 per client x 20 clients a week, that is $3,000 per week or $12,000 per month x 12 months is almost $150,000 a year and she is only working 20 hours a week!"
I loved our chat, and though it was not appropriate for me to break it all down to her at a dinner party, I did ask her if I could email her a more realistic scenario later in the week; she shared she would welcome this.
Here is what I emailed to my friend's sister last week, I thought I would cut and paste here as a support:
Thank you for asking the question at your sister's party regarding therapist fees. You shared that you believe your therapist must be "raking in the big bucks" at $150 per session. I appreciate that you are open to me breaking this down to give you a more realistic idea about therapists and fees:
I'll break this down per client fee. Using 20 clients a week, or 80 clients per month, at a $150 gross fee per client, we must take out Uncle Sam's cut per client. Now we are left with approximately $112 net (after taxes) income per client.
From this net balance we must take out of the client's fee our office rent, so let's say that is about $600 per month that we pay in rent, divided by 80 clients per month means we would want to deduct approximately $7 per session, so that is now $105 net income per client.
From that $105 we will need to deduct liability insurance, membership fees, CEUs, business licensing fees, and board licensing fees, website fees, Psychology Today fees, accounting fees, so let's say annually those fees come to a conservative approximate at $4,000, and 4K divided by 12 months = $333 divided by 80 clients per month = approx. $4.00 that we will need to deduct per client fee, so we will want to reduce that $105 net down to $101 net per session fee.
We also will need to deduct books, training, office cleaning, phone, alarm, water for clients, Edison, TP, Kleenex, art supplies, flowers, books, magazines, hand towels, candles, hand soap, candy, light bulbs, printer ink, paper, file folders, stamps, cleaning supplies, credit card fees, shipping, PO box, and a zillion other little and big office supply expenses. Let's say that conservatively comes to about $5,000 per year or approximately $416.00 per month divided by 80 clients is another $5 that we need to reduce the net fee by, so now we are at $96 per client take home.
Not too shabby....except....many (not all, but many) therapists must pay for their own health insurance, sick time, and vacation and retirement.
So, we take a low average at $300 per month in health insurance x 12 months that is $3,600 per year, divide that $300 a month by 80 clients, that is approximately $4.00 that we will need to deduct from our $96 net. Now we are at $92 take home.
From this we will want to take out of each client session fee $5 to cover unpaid sick time (or approximately $4,800 dollars annually to cover sick time for the therapist or if their spouse or child is sick), $5 to cover unpaid vacation time (or $4,800 to cover time out of office for vacation and self care), and $20 to put away for retirement (about $19,000 per year). So that is another $30 that we will need to subtract from our $92 dollar net, leaving us with a grand total of approximately $62 per client fee take home.
$62 net dollars (after taxes and expenses) x 20 clients per week = $1,240 net per week x 4 weeks = $4,960 actual approximate take home after taxes, rent, fees, CEU training, professional expenses and licensing, office expenses, sick time, vacation pay, and retirement.
And for many clinicians, this does not take into consideration the many years and the large amount of money they invested into their education, and the student loans that they are paying each month.
$4,960 net per month x 12 months = approx. $60,000 net take home per year seeing 80 clients per month at $150 per client fee. A far cry from raking in the big bucks wouldn't you say?
Now, let's move on to your question about your therapist only working 20 hours a week for these big bucks as I'd love to clarify what an average therapist's week actually looks like:
Outside of the clinical hour there are hours and hours devoted to research, treatment planning, treatment notes, accounting, practice management, super bills, consulting time, scheduling, returning client calls and emails, classes, marketing, networking, writing, blogging, social media, speaking, and general practice tasks (everything from refilling kleenex boxes, to running office errands) that a therapist must do in order to run a successful, organized, and professional practice. So the 20 hours quickly add up to 40 + or more hours very easily.
And for those clinicians who work with insurance panels, there is less pay, more paperwork, and even more hours.
This is why we have a very high rate of burn out among healing clinical professionals. Therapists who do not have a spouse or partner to help out, or therapists who do not create multiple income streams, or therapists who do not diversify into other active income roles, often end up seeing close to 150-200 clients per month (or 6-8 clients a day, 6 days a week, missing out on time with spouses, partners, children and friends) in order to earn a decent living. And there are clients who insist on contacting the therapist out of session, and then become frustrated and even enraged when their therapist holds good boundaries around their time off.
Therapists who do this end up very burned out. And this is why clients share that they do not always have a good result in therapy, or that they feel as if their therapist is checked out, or doesn't care.
There are many therapists who rarely take vacations, or are fearful of becoming sick because if they don't work, they don't earn. The irony is that the stress of this grind is what creates illness. And many therapists cannot afford to save for a vacation, and they put away very little for retirement because, as you can see, they make very little, even at that "whopping fee" of $150 per clinical hour.
There are therapists who have to work weekends and evenings, losing time with families. And there are therapists who charge a fee that is over $250 per hour if they want to work less hours, which many therapy clients simply cannot afford. Or they must work another job like teaching or agency work so that they can either make more money to feed their family, or because they need paid health insurance for their family.
And even with a fee of $150 an hour, though I heard from our conversation how much you appreciate and value the support you have with your own therapist, there are some clients who will still ask for a sliding scale, or resent the fee that they are paying for a therapist who is providing a high level of support that is priceless. There are clients who have the mindset that their therapist should sacrifice and reduce their fee, vs. the client saying no to their own vacations, dinners out, or daily Starbucks so that they can afford the therapist's support. Think about it...what other clinical or medical professional would you ask for a sliding scale? Not a dentist, not a OB GYN, not a Chiropractor, not a surgeon. But there is a societal mindset that highly trained, highly educated psychotherapists, psychologists, and other counseling professionals should reduce their fee.
Do we really want our healers barely scraping by? How does that model a healthy, balanced, abundant life to therapy clients? Short answer: It doesn't.
You also asked me during our chat if therapists are able to barter their time in exchange for services. Our profession has one of the highest standards of ethics that does not allow for therapists to barter with other professionals. Which, of course, makes sense given the sensitive nature of our work. So, if we want to go to yoga, we can't barter our sessions for yoga classes. If we want a massage, we must pay for that out of pocket. If we want to get our hair done, again, we must pay for this - not barter. It is illegal and unethical to do so. And I (as well as my colleagues) understand and honor this.
I do hope that this breakdown in therapist hours, fees, and actual time in running a therapy practice has broadened your understanding about therapists making the "big bucks while working less hours per week". As you can see, this is one of the most misunderstood aspects of clinical work.
And make no mistake about it, providing therapy is some of the most complex and challenging work there is.
I hope that you will share this message far and wide so that this misconception can finally be put to rest. After all, therapy clients don't know what they don't know, and it is up to our profession to educate the public about this. You may be wondering why your own therapist did not share this with you - that is because we therapists must be careful to keep our eye trained on supporting and assisting our clinical clients, not going over fee structures in this kind of detail which may interfere with the client's healing process and focus.
For many of us, our role as a therapist is sacred work and is often a calling. It is for me. Like teachers, we are not in this field because we under an illusion that we will become incredibly wealthy doing only one-on-one therapy sessions. That is why many of us have learned to diversify our active income, or work with a coach to create multiple income streams so that we can bring our best selves into our clinical roles.
For example, as a coach to other clinicians, I teach therapists how to create passive and leveraged income to supplement their clinical work so that that can make a really good living doing the work they love, and not have to burn themselves out taking on too many clinical clients each week.
Thanks again for broaching the topic at your sister's party last week, and for expressing a genuine interest in this topic, and being open to having me share.
Looking forward to seeing you at yoga class this weekend!
Update: A week after posting this blog, a couple of my clinical colleagues reminded me that many clinicians must also pay for vision and dental out of pocket, child care, office cleaning, and as shared by colleagues in the comment section below, some areas of the US (New York and Los Angeles County) have very high office rents, and/or have EHR notes that incur a monthly expense. I chose a more moderate office rent for this blog in order to consider all parts of the United States. If you are a therapist and have thought of another item or expense that is not included in this list, you are welcome to share in the comment section below and I will add it here.
If you are a non therapist reading this, I hope this provides helpful and clear information. Therapists love supporting the clients we are honored to work with, and it is unlikely that your own therapist would share about their fee and schedule in this detail, thus, I am glad you have found this.
If you are a therapist reading this, I hope this supports the good work you are doing, and encourages you to consider working with a coach to create multiple income streams, or to fine tune your policy with respect to your fee and boundaries around your time out of session. And I hope that you will share this article as well.
You are worth every single penny for the incredible work you are doing in the world, keep shining your light!