How to Calculate Your Private Pay Rate (And Actually Charge It)

“What should I charge?” is the wrong question.

The right question is: “What do I need to charge to sustain my life and my practice?”

Most therapists pick a rate by looking around at what other therapists charge, picking something in the middle, and hoping it’s enough. That’s not a strategy. That’s a guess.

Your rate isn’t about your worth.

Let’s get this out of the way: I don’t believe in “charge what you’re worth.” You’re a human being - your worth isn’t quantifiable. And frankly, that framing keeps therapists stuck, because they tie their self-esteem to a dollar amount.

Your rate is about math. What does it cost to run your life and your business? That’s your starting point.

The actual calculation.

Here’s the simplified version:

1. Add up your monthly personal expenses (rent/mortgage, food, utilities, insurance, debt payments, everything)

2. Add up your monthly business expenses (EHR, liability insurance, subscriptions, continuing education, etc.)

3. Add those together

4. Multiply by 1.3 to account for taxes and self-employment costs

5. Divide by the number of sessions you want to see per month

That’s your minimum sustainable rate.

Notice I said “sessions you want to see” - not “sessions you could theoretically cram into your schedule.” If you want to see 20 clients a week and take actual vacations, calculate based on that.

Why therapists resist this.

When I walk therapists through this calculation, they often land on a number higher than what they’re currently charging. And then the panic sets in.

“No one will pay that.” “I’ll lose all my clients.” “That’s more than other therapists in my area charge.”

Here’s what I know: there are therapists in your area charging more than you, seeing full caseloads. The difference isn’t their credentials or their experience. It’s their confidence and their clarity.

The real barrier is internal.

Most pricing problems aren’t business problems - they’re money story problems. The messages you absorbed growing up about money, worth, and who gets to have nice things. The implicit lessons from grad school that therapists should sacrifice. The guilt about charging for help.

This is why I spend the first two weeks of my intensive coaching program on money mindset before we ever touch strategy. You can know what to charge and still not be able to do it if your internal wiring is fighting you.

What to do with your number.

Once you’ve calculated your sustainable rate:

1. Say it out loud. Ten times. Notice what comes up.

2. Practice stating it without apologizing, explaining, or immediately offering a discount.

3. If there’s a gap between your current rate and your sustainable rate, make a plan to close it.

Maybe that means raising your rate for new clients immediately. Maybe it means a gradual increase for existing clients. Maybe it means having some hard conversations. But you can’t build a sustainable practice on an unsustainable rate.

Ready to run your numbers? Use the Private Pay Rate Calculator - it factors in taxes, time off, and the expenses most therapists forget.

Advertising, Marketing, and Networking: They’re Not the Same Thing

Therapists use these words interchangeably all the time. “I need to do more marketing,” when they mean advertising. “My advertising isn’t working,” when the problem is actually their messaging. “I hate marketing,” when what they really hate is self-promotion.

Let’s untangle this.

Marketing is the umbrella.

Marketing is everything about how you position yourself and communicate your value. It’s your messaging, your brand, who you’re trying to reach, and how you talk about what you do. Marketing answers the questions: Who do I help? What problem do I solve? Why should someone choose me?

Your website copy is marketing. Your Psychology Today profile is marketing. The way you describe your practice at a networking event is marketing. The Instagram post you wrote about burnout is marketing.

Marketing isn’t something you do - it’s the foundation everything else sits on.

Advertising is paid visibility.

Advertising is when you pay to put your message in front of people. Psychology Today is advertising (yes, that monthly fee is an ad). Google Ads, Facebook Ads, Instagram promotions, sponsored posts - all advertising.

Here’s where therapists get tripped up: they invest in advertising before their marketing is solid. You can pay for all the visibility in the world, but if your messaging doesn’t resonate, you’re just paying to be ignored.

I’ve seen therapists spend hundreds on Google Ads driving traffic to a website that says, “I provide a warm, supportive environment using evidence-based approaches.” That’s not a message. That’s wallpaper.

Networking is relationship-based visibility.

Networking is building connections with people who can refer to you or collaborate with you. Coffee meetings with other therapists, connecting with physicians, building relationships with school counselors, and joining professional communities.

Networking is slow. It doesn’t scale. And it’s often the most effective thing you can do.

Why? Because a referral from a trusted source carries weight that no ad can match. When a psychiatrist tells their patient “I know a therapist who specializes in exactly what you’re dealing with,” that person is practically sold before they ever visit your website.

So what does this mean for your practice?

First, get your marketing right. Clarify who you help and what transformation you provide. Make sure your website and profiles actually speak to your ideal client’s experience - not just your credentials and modalities.

Second, don’t over-rely on any single advertising channel. I’ve watched therapists build entire practices on Psychology Today referrals, then panic when the algorithm changes or their area gets saturated. Diversify. Maybe it’s Psychology Today, a Google Business Profile, and one other directory. Don’t put all your eggs in one basket.

Third, network consistently. Not frantically when your caseload drops - consistently. Two coffee meetings a month. Staying connected with colleagues. Building real relationships, not just collecting business cards.

Here’s the thing: advertising costs money. Networking costs time. But bad marketing costs you both - because you’ll spend money on ads that don’t convert and time on networking conversations that don’t lead anywhere, all because your message isn’t landing.

Before you ask, “Where should I advertise?” ask, “Is my message clear?” Before you ask, “How do I get more referrals?” ask, “Do people actually understand who I help?”

Marketing first. Then decide how you want to get visible - through paid advertising, relationship-building, or ideally both.

Not sure what to charge? Start with the Private Pay Rate Calculator to get your numbers clear.