Private Practice Therapist Salary: What to Pay Your New Hire

Bringing someone onto your team is a significant step as a practice owner. It's also quite loaded. As Simone, owner of group practice The Cognitive Corner put it, "Money is a sensitive topic." Simone and Arisza Hillman, a licensed clinical social worker and practice coach, shed some light for those who are tackling this in their own practices.

Here's what they shared.

Start with market research

"How do you figure out what's a fair amount to pay admin staff?" It’s a very common question.

Simone's answer was straightforward, "Market research is number one. What is the person going to be doing? And based off of what they're doing, what is the industry standard?" It sounds simple, but it's a step many practice owners skip because they either set rates based on gut feel or what they were paid at a previous job.

Before you post a job listing, it helps to do a little research. Find out what comparable roles are paying in your region, then work backward from what your practice can realistically sustain.

How pay splits actually work

When bringing on a new practitioner, pay splits are the most common compensation structure. But do you decide what your split should be?

A 60-40 split (60% to the clinician, 40% to the practice) is typical in practices that handle billing, scheduling, and client intake. The practice is absorbing real overhead costs, and the split reflects that. When you factor in rent, admin salaries, software, and insurance, that 40% is spoken for sooner than most new owners expect. Practices where clinicians take on more of their own billing or client acquisition often offer a higher split, closer to 70-30, to compensate for work the practice isn't doing.

When hiring themselves, both Simone and Arisza were transparent with candidates about their structure upfront and ensured the split came with a clear explanation of what it includes.

Tip: For mental and behavioral health, clinical supervision is a crucial requirement for new practitioners, so Arisza offers free clinical supervision if practitioners maintain a certain caseload. As she explained, "Most people are going to do what they can to maintain the hours, because they like the part of having free supervision." It's a way to make an offer more competitive without increasing fixed costs.

Understanding your numbers before you post the job

Here's a question worth sitting with before you start interviewing: do you actually know your gross revenue right now?

This goes beyond just your session count and billing rate. It’s important to understand your actual gross revenue, meaning, what comes in after cancellations, no-shows, and insurance write-offs. That number tells you what your practice can genuinely support as a payroll obligation. Without it, compensation decisions are guesswork.

When you know your gross revenue and your overhead costs, you can reverse-engineer a sustainable pay structure rather than picking a percentage and hoping it works out. Simone reminds practitioners, "When there are multiple people [on your payroll], you really have to make sure that all your I's are dotted and T's are crossed and that you’re looking at your finances monthly and quarterly."

Tip: Andrew Riesen co-found of Heard, recommends practitioners track income and expenses month-over-month before making any major business decisions. Hiring applies here. His rule of thumb: look at what's coming in, subtract what's going out, and understand your profit clearly enough that you can ask "can I sustainably carry this new cost?"

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Keep cash flow in mind

In an insurance-based model, reimbursement windows of 30 to 60 days are common, but your payroll schedule won’t always line up with those reimbursements. Arisza describes this cadence mismatch as stressful at times, "A lot of times, I was paying them [employees] before I was even reimbursed for anything."

Her advice to anyone preparing to hire: "Before you start your practice, make sure you have a decent amount in your account, because you might be paying before you’ve been reimbursed yourself."

That gap, between when you pay staff and when money actually arrives, is something to plan for before you make your first hire. It’s best practice to have a meaningful cash cushion in place. Know what your payroll obligation looks like on a recurring basis, and make sure your operating account can carry it through a slow billing cycle.

Arisza says, “When you’re by yourself the money looks really good, but as you hire, payroll becomes your biggest deduction.”

Tip: Not sure how to calculate your own salary? Check out this post How to Pay Yourself in Private Practice (Without Guessing) for some helpful insights.

Before you post the job

Some questions to ask yourself before you hire:

Can I afford this?

How will I structure the offer?

What’s the going rate or structure in my area?

Doing the work upfront, so knowing your market rates, understanding your overhead, and having a cash buffer in place, means you can make an offer you're confident in, from a position of genuine readiness. This will allow you to offer a position to someone from a place of excitement (after all, this is an exciting step).

That shift, from hiring out of urgency to hiring from a place of preparation, changes the whole experience. For you and for the person you're bringing on.

Tip: Getting a private practice off the ground? The New Practice Guide is a free resource from Jane designed for those considering starting a practice or new to owning a practice. And if you’re just getting started and are wondering about your software options, we’d love to show you around.

FAQ

What's a typical private practice therapist salary for a clinical hire?

There's no universal number, but in a private practice setting, therapist compensation is most often structured as a percentage split rather than a flat salary. A 60-40 split (60% to the clinician) is common where the practice covers billing, scheduling, and overhead. Flat-rate pay per session does exist, but it's less common.

Does offering clinical supervision help with therapist recruitment?

Yes, and it's one of the more underused aspects of private practice hiring. Clinical supervision has real monetary value to early-career therapists working toward full licensure. Tying it to a minimum caseload, as Arisza Hillman does, creates a built-in incentive to stay engaged and productive.

Should therapist pay be a flat rate per session or a percentage split?

Both models work, but they carry different risks. Percentage splits flex with your revenue, which protects you during slow periods. Flat rates are simpler to communicate but can create cash flow pressure if session volume drops. Which works better depends on your billing model, whether you're insurance-based or private pay, and how predictable your caseload is.

What overhead costs should I account for before hiring?

At minimum: rent or space costs, practice management software, liability insurance, any marketing spend, and the admin time required to onboard and support a new clinician. Many practice owners underestimate the admin load that comes with adding a provider. If you're currently doing your own billing, adding a clinician often means you'll need admin support too, which compounds the cost.