The Most Common Mistakes Therapists Make When Setting Their Fees—And How to Avoid Them

Jul 15

Setting your fees in private practice isn’t just a financial decision; it’s a foundational step in building a sustainable, thriving business. Yet, many therapists (especially those new to private practice) find this part confusing, uncomfortable, or overwhelming.

If you’ve ever caught yourself Googling “how to set therapy fees” or setting a number based on what others charge, you’re not alone. But getting this wrong can lead to burnout, resentment, and a business that doesn’t actually support your life.

Let’s walk through some of the most common mistakes therapists make when setting their fees—and more importantly, how to avoid them.

1. Choosing a Fee Based on What Others Charge

Many therapists look at local Psychology Today profiles or ask colleagues what they charge, and then pick a similar number.

But here’s the problem:
You have no idea what went into that person’s decision. Their fee might not be covering their expenses. They might be undercharging. Or they might have completely different goals and needs than you do.

The fix:
Start with your own numbers. Look at your personal and business budget. Consider how many clients you want to see per week, how many weeks per year you want to work, and what you need to earn to feel financially secure. Build your fee from there, not from comparison.

2. Undercharging Because of Guilt, Fear, or Imposter Syndrome

It’s common to feel uneasy charging a fee that reflects the true value of your work—especially when you’re new.

You might think:

“What if people can’t afford it?”
“I’m not experienced enough to charge that.”
“Who am I to ask for that much?”

Here’s the truth:
Undercharging doesn’t help your clients. It leads to overwork, burnout, and potentially having to leave private practice altogether.

The fix:
Work on your money mindset and remind yourself: fair fees allow you to serve clients sustainably. You’re not just charging for the session, you’re charging for your training, expertise, emotional labor, and the container you hold.

3. Ignoring Taxes and Business Expenses

If you’re setting your fee based on take-home income without factoring in taxes or overhead, you’re setting yourself up for a surprise come tax season.

The fix:
Use a simple formula that accounts for taxes (aim for ~30%), expenses, savings, and paid time off. Your fee should reflect not just the hour you’re in session, but all the costs of running a business.

4. Skipping a Sliding Scale Policy (or Overusing It)

Some therapists avoid setting any policy around sliding scale, which leads to inconsistent fees, awkward conversations, and burnout from taking too many reduced-rate clients.

Others over-rely on a sliding scale out of fear they won’t fill their practice.

The fix:
Decide ahead of time: How many sliding scale spots can you realistically offer? What’s the minimum fee that still supports your business? Set clear boundaries and consider using a sliding scale application or agreement to keep things organized and fair.

5. Not Revisiting or Raising Fees Regularly

Therapists often wait too long to raise fees, sometimes years, out of fear that clients will leave. But as your experience, expertise, and expenses grow, your fee should reflect that.

The fix:
Build in a regular review, annually or biannually, to assess your rates. Let clients know you periodically evaluate your fees to ensure sustainability. Clear communication, advance notice, and transparency can make the process feel smoother for everyone.

Your Fee Should Support Your Life—Not Just Your Clients’ Healing

When you set your fee with clarity and confidence, you protect your energy, serve clients better, and build a private practice that can grow with you, not drain you.

It’s not about charging the most. It’s about charging what’s right for you.