I was there, when I first started my private practice I gave staff a 50/50 split, then 65/35, then 75/25. As they saw more people, they got paid more. But I was always left asking myself: 

• Am I paying my therapists enough?
• Will they stay in the private practice? 
• Why are they making so much and I’m making so little?

A few years ago we noticed a trend with our consulting clients. More practice owners were switching to a W2, fixed rate model. So first, let’s talk about the different models:

1. What type of classification do they have?: We need to first know if a therapist is a 1099 contractor (you have less control and oversight) or a W2 employee (you have more oversight and control). In general we are seeing the IRS come down on practices with 1099s, we’re not attorney/accountants here, but our general recommendation is to go W2.
2. How are the counselors paid?: The two major approaches we see are a “percentage-based model”, where a clinician gets a % of what they bring in or a “fixed rate model” where the clinician gets a fixed rate per session. We also see some owners give bonuses based on the number of sessions. 

As a general rule, we are seeing W2, fixed-rate models that lead into a salary as the leading option right now. This does a few things: 

Get therapists to stay longer at your practice

It increases job security and retention, therapists stay longer. 

Private practice owners can usually make more overall, by providing that security. 

It reduces the amount of bookkeeping that a practice owner or accountant needs to do. 

 So how does fixed rate clinical pay work?

Typically we give a fixed rate based on a few factors: the average reimbursement rate between all insurance and private pay x the % rate of that average (we recommend 40-45%). So if the average counseling reimbursement rate for a 90834 session 38-52 minutes is $125, then the fixed rate would be $50 (40%) to $56.25 (45%). 

This is the rate that a new clinician gets when they average below 12 sessions. That’s not a ton of money, but we then need to look at how it scales as we move into a salary model. When someone averages 12 sessions we can offer them a part-time position, based on 15 clinical hours average + 5 non-clinical hours ($25-$35/hour). 

Clinical: So we’re do 15 x $50 (if that’s what we landed on) = $750

Non-clinical: 5 x $30 (if that’s what we landed on) = $150

Weekly salary = $900/week 

Then we look at having them get time off, maybe we give 4 weeks paid vacation to stand out in our area, so we’d base the $900 on 48 weeks = $43,200 salary. Every other week that would be $1,661.54. 

We’d do the same math with ¾ time (20 clinical hours) and full-time 25 clinical hours. 

So a full-time therapist would be 25 clinical and 10 non-clinical with a four-day workweek:

25 x $50 = $1,250

10 x $30 = $300

Total weekly = $1,550 

X 48 weeks = $74,400 per year or $2,861 per paycheck. 

What if they’re not full? 

So what happens if you can’t keep the person full? This is where the risk is on you the owner, not the clinician. You need to watch those averages. Is summer slower in the private practice? Then maybe they average 28 sessions in the winter. But they still work 35 hours. 

What do they spend non-clinical time one? 

I believe that clinicians should be able to design their positions to match their passions. So the non-clinical time is not for notes, that is included in the clinical time. The non-clinical time is specifically to moving the practice forward in some way. So if they like blogging, social media, networking, going on local radio, you design those projects together and that is where they spend the non-clinical time. Also it may be staff meetings, credentialing work, or other practice specific tasks, Or if someone levels up to be a supervisor, that is part of the non-clinical time. 

How much would I make if I did this? 

If you had one full-time person doing 25 sessions per week with this model and your overhead was 35% off the gross you would make $23,100 per full-time clinician. 

The calculator above will help you play with all these numbers and give some recommendations to help you. We’re only offering this to the public for a short time, then it will be exclusively within our membership community The Practice Academy.