How Much Do Therapists Make an Hour?
Authors: Ryan Shinazy & Cole Butler, MACP
(6-minute read)
A therapist doing accounting
Introduction
Are you considering becoming a therapist, but curious about how much they make? Or maybe you already are a therapist and want to know where to set your hourly rate for your new private practice? Perhaps you are interested in therapy and want to know how much it will cost? If any of these apply to you, then you might be wondering, “How much do therapists make an hour?”
Licensed Therapist Salary in Colorado
Salaries can vary widely between therapists depending on several factors. These include elements such as level of education, years of experience, license type, skill level, type of practice, and even location.
Therapists generally receive a pay increase once they receive official licensure. For example, in Colorado, this means going from a Licensed Professional Counselor Candidate (LPCC) to a Licensed Professional Counselor (LPC).
Additionally, as a therapist gains experience and learns to work with new skills, they have the opportunity to charge a higher rate for their services.
Taking those factors into consideration, let’s look at some averages based on data from ZipRecruiter:
Colorado Average
Low: $21.74 per hour ($45,215/year)
Average: $43.23 per hour ($89,928/year)
High: $62.94 per hour ($130,915/year)
Comparison by Location
Nationwide Average: $40 per hour
Colorado Average: $43.23 per hour
As seen above, ZipRecruiter reports salaries ranging from as low as $21.74 to as high as $62.94, with the majority falling between $32.36 and $50.58. As of July 1, 2024, the average hourly pay for a licensed therapist in Colorado is $43.23.
The variance in pay suggests opportunities for advancement based on the previously mentioned factors like skill level, location, and years of experience. Colorado currently ranks fifth highest paid state nationwide for licensed therapist salaries.
Working for a Company
Therapists working for companies or agencies, such as hospitals, government agencies, and community mental health centers can have more stable salaries and potentially even benefits compared to those in private practice.
However, working for a mental health agency may come with its own drawbacks too, such as excessively high client volume and increased potential for burn out, but for the most part we will stick to income with this post.
Income while working for a company or agency can vary based on the sector and one’s role. Let’s take a look at some average incomes compiled by Counseling Wise:
Wages by Sector
Government: $50,600
Hospitals: $47,000
Individual and Family Services: $42,190
Outpatient Centers: $42,140
Residential Facilities: $37,210
Private Practice
Salaries for therapists in private practice vary widely as well. Factors such as client load, hourly rates, and marketing can influence how much a therapist can make.
Tip: Check out some of our previous blog posts for mental health marketing guides:
Mental Health Marketing Beginner’s Guide
SEO for Mental Health Professionals
Social Media Marketing for Therapists
7 Steps to Effectively Create a Mental Health Brand
Private practice therapists have the potential to earn significantly more than those working for companies, especially with a well-managed practice. Again, let’s look at some averages based on data from ZipRecruiter:
Average Salaries
Low: $26.17 per hour ($54,422/year)
Average: $49 per hour ($102,645/year)
High: $62.82 per hour ($130,660/year)
Although the numbers reported by ZipRecruiter show minimal differences between all therapists and private practice therapists, they may not paint the full picture. Some private practice therapist’s rates range between $100 per session up to $200-$300 per session, depending on the type of visit.
Sliding Scale Fees
It is also important to note that therapists may offer a sliding scale for cash pay clients. This allows them to adjust their fees based on the client's ability to pay, especially for therapists on the higher end of the hourly rate. This approach makes therapy more accessible to a broader range of clients while ensuring therapists can still earn a fair wage.
Insurance
Therapists accepting insurance may see a lower per-session rate compared to private pay clients, but they often benefit from a steady stream of clients and reduced marketing efforts. The following are a few factors that impact income when accepting insurance:
Impact of Insurance on Income
Negotiated Rates: Typically, insurance companies will pay therapists a lower rate than private practice fees. This is because insurance companies negotiate rates with therapists to control costs, which often results in reduced compensation per session for the therapist.
Network: Insurance companies generally have networks they work within, so if you accept their insurance, you are in their network. For out-of-network clients to receive coverage, the therapist may need to provide the client with a “superbill” which they will pay, and submit to their insurance company for reimbursement.
Client Volume: can be higher due to insurance networks. Insurance networks can provide therapists with a higher volume of clients because individuals are more inclined to seek therapy when it is covered by their insurance. Clients often prefer to use their insurance benefits to reduce out-of-pocket costs, leading them to choose therapists within their insurance network. As a result, therapists who accept insurance may experience a more consistent and larger client base compared to those who only accept private pay clients.
Income Stability: can be increased due to consistent client flow. Accepting insurance can lead to a more predictable and stable income for therapists. The steady pace of new clients through insurance networks helps maintain a regular schedule and income stream. This consistent client flow reduces the financial uncertainty that can come with relying solely on private pay clients, who may be less consistent in their attendance or ability to pay for sessions.
Companies Supporting Therapists
Alma: Provides support for private practice therapists to accept insurance and manage administrative tasks.
Headway: Helps therapists accept insurance and get new clients through their platform.
SonderMind: Connects therapists with clients and handles insurance claims to streamline the process.
Telehealth
One of the more recent forms of therapy, telehealth platforms offer therapists the flexibility to work from home and set their schedules. However, as with working for in-person agencies some telehealth companies come with their own drawbacks. The therapist’s income can vary based on the platform's payment structure and their client load.
Average Salaries
BetterHelp and Similar Platforms: Rates vary, with some therapists earning between $20 and $50 per hour depending on client volume and platform policies according to Glassdoor.
Companies Supporting Telehealth Therapists
Alma, BetterHelp, Headway, SonderMind, and similar companies offer low-cost telehealth services with varying insurance coverage. While these may not be the highest paying options out there, their services can make therapy more accessible to a wide range of people in need.
Conclusion
The earning potential for therapists varies widely based on their employment setting, specialization, location, and years of experience. Whether working for a company, in private practice, accepting insurance, or providing telehealth services, therapists have numerous opportunities to shape their careers and income. Understanding these variables can help current and aspiring therapists make informed decisions about their career paths and financial goals.
About the Author:
Ryan Shinazy
Ryan Shinazy is an Intern at Integrative Care Collective PBC. He is an Honors Student in Psychology at University of Northern Colorado (UNC). He is currently a Senior with a 4.0/4.0 GPA. He is currently working on developing his honors thesis under Dr. James Kole, entitled: Understanding Loneliness in the Digital Age: Implications of Social Media Use. He plans to get his Master’s Degree in Clinical Mental Health Counseling at UNC. As ICC PBC’s Intern, he is responsible for content production, including SEO-optimized blog posts and social media content.
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