Part 1:How to Pay Yourself in Private Practice
The foundation. You can't build a pricing strategy without knowing what you need to earn. Answers the question "what am I actually building this practice for?"
Here's a question I ask every therapist I coach: how do you pay yourself?
Most of the time the answer is some version of "I take what's left in the business account after everything else is paid." Which sounds reasonable until you realize what's actually happening. You've built a business where you're the last person to get paid. And you're paying yourself with the leftovers.
That's not a paycheck. That's a scrap.
I did the same thing for years. Pay everyone else first, then take whatever was left. It worked, until it didn't. When insurance clawbacks started hitting my group practice, I could barely pay my staff and therapists. My "whatever's left" quickly became nothing at all. I was funding a business that couldn't sustain me.
Getting out of that took a team. My accountant helped me see the real numbers. My money recovery team through the 12 steps helped me untangle the shame and the codependent patterns underneath the pricing decisions. Slowly, I figured out what I actually needed and what I didn't. That process is what eventually led to me creating Private Pay Practitioners, because I realized how many therapists were stuck in exactly the same place I had been.
Don't figure this out alone. I tried. It nearly cost me my practice.
The Problem with "Whatever's Left"
When you pay yourself based on what's left in the account, three things happen:
Your income becomes unpredictable. Some months there's plenty. Some months there's nothing. You can't budget your life around scraps.
You keep undercharging. If you don't know what you actually need to pay yourself, you can't build a rate that supports it. You end up setting rates based on what feels comfortable, then hoping the numbers work at the end of the month.
You develop resentment. Toward your business, toward your clients, toward the field. You're working full-time and it's still not paying you enough. The problem isn't the work. It's the structure.
The therapists I've coached who have made real changes started here: paying themselves like an employee of their own business, not like an afterthought.
What Paying Yourself Actually Looks Like
Pay yourself a set amount, on a set schedule, from your business account into your personal account. Just like a paycheck from any other employer.
The set amount is whatever you've decided your practice can support based on real math. Not "whatever's left." A defined number.
The set schedule is whatever works for your cash flow: weekly, biweekly, monthly. Just consistent.
This changes everything. Because now you know what your income is. Now you can budget. Now you can see whether your practice is actually supporting your life or slowly draining it.
How to Figure Out What You Should Pay Yourself
Here's the math that most of us in this field were never taught.
Step 1: Calculate your business overhead.
Add up every dollar it costs to run your practice for a year. Rent, software, insurance, professional fees, marketing, continuing education, subscriptions, phone, everything. Get a real number.
Step 2: Calculate your annual gross revenue at your current rate.
Take your session rate, multiply by the number of sessions you realistically see in a year, subtract expected cancellations (usually 10-15%). That's your gross.
Step 3: Subtract expenses.
Gross revenue minus business overhead equals your pre-tax profit.
Step 4: Set aside for taxes.
25-30% of your profit needs to go to self-employment taxes, federal, state, whatever applies to you. If you're not setting this aside, you're going to be devastated at tax time.
Step 5: Set aside for retirement.
No employer is matching you. If you're not saving 10-15% for retirement, you're subsidizing your future self's poverty.
Step 6: What's left is what you can pay yourself.
If that number is too low to live on, you have three levers to pull: raise your rate, see more clients, or cut expenses. Usually raising your rate is the answer, because it's the only one that doesn't cost you time or quality of life.
How Much Should Therapists Actually Pay Themselves?
There's no single right number because every therapist has different overhead, different income needs, and different practice models. But here are some anchors from what I see:
Solo private pay therapist working 20 clinical hours per week at $150+ session rate: paying yourself $65-85K salary is realistic after expenses, taxes, and retirement contributions.
Solo private pay therapist working 15 clinical hours per week at $200+ session rate: similar takehome, less clinical load.
Solo insurance-heavy practice at $110 average per session: you're going to need to see more clients or supplement with something else to pay yourself a real living.
The numbers vary. But if your practice can't pay you at least what you'd earn at an agency job, the practice isn't working. Something has to change.
The Salary Mindset Shift
The biggest change isn't the math. It's the mindset.
When you pay yourself a real salary, you start seeing your practice differently. It's not a passion project you happen to charge for. It's a business that has to sustain you.
That shift changes how you think about pricing. It changes how you think about your calendar. It changes what you say yes to and what you decline. You stop confusing "successful practice" with "busy practice" and start measuring success by whether it pays you what you need to have a life.
Common Mistakes I See
In my coaching work, the pattern is consistent:
Paying yourself only when the account looks healthy
Setting aside nothing for taxes and getting hit hard in April
Confusing gross revenue with take-home pay
Not building in retirement contributions at all
Working more hours to make up for underpricing instead of raising the rate
Assuming an inconsistent paycheck is just part of being self-employed
None of these are inevitable. They're the result of not having a system. Once you build one, they mostly go away.
What to Do Next
Sit down with real numbers this week. Calculate your business overhead. Calculate your gross revenue at your current rate. Do the math backward from what you actually need to pay yourself to live.
If the number doesn't work, you now know why. And you know what has to change.
If you want structured support, I offer strategy calls, group coaching, and a 6-week intensive specifically for therapists building sustainable private pay practices. My rate calculator walks you through both pricing methods. My Rate Raise Kit gives you scripts and templates for when you need to raise rates on existing clients.
Paying yourself isn't optional. It's the whole point of running a business.
You built this practice. Now let it pay you.
