Talking about one’s income potential brings both excitement and pangs of anxiety. You’re eager to make as much as possible and you’re worried you might not make enough. When you’re struggling to make ends meet, what you’re earning per hour makes a big difference. And a lot of our energy goes into trying to earn as much money and as many hours as possible.
While this is true in a practical sense–yes, we must make money–our mindset and beliefs about our ability to earn a good income impacts our income potential more than anything else.
First, let’s consider a few points about this ever-present and influential force–our beliefs about ourselves and the value we offer as therapists:
- What we offer and provide our clients, even early on in our careers, is of vital importance. Giving our undivided attention while offering empathy and validation can be tremendously therapeutic.
- When clients pay to come to therapy, it’s an investment in their well-being or overall emotional and mental health.
- Neuroplasticity research tells us that people can heal from past traumas. Neuropathways can change as a result of a strong therapeutic relationship, since research tells us that’s what facilitates healing and growth.
Money Mindset Can Impact What You Earn
It can still be a hurdle to accept that we’re worth a certain dollar amount even if we’ve realized the inherent value of therapy. Especially when we think that dollar amount is larger than the value of what we offer. For example: “I can’t ask for that much; that’s audacious.” “I can’t get paid that; but I can earn ___.”
A significant factor contributing to our income potential is our money mindset, or what we believe we’re capable of doing and earning for a living. Money mindset blocks often stem from messages that get internalized early on in life. What we see in our families and society leads us to develop certain beliefs and attitudes about ourselves and others. That’s also layered by our culture and socio-economic status while growing up.
These perceptions tend to come out when we’re seeking work, especially when asking for a particular rate or negotiating pay rates. All of a sudden, we’re in a situation where a potential supervisor states their going rates and we’re on the spot to have to accept or negotiate. This brings all our issues to the fore as we’re faced with having negotiate our pay rate. The best way to prepare for this is to first know what going rates are and what the range is.
Going Rates and Ranges
A typical payrate in private practice while you’re pre-licensed depends on whether you’re being paid as a W-2 employee or you’re paying your supervisor a flat rate as an independent contractor (1099). The rules and laws for this vary state by state. For instance, in Texas you can be employed as a W-2 or as an independent contractor whereas in California, Washington and many states you’re required to be an employee and not operate independently.
Please don’t be misled though by that because as an employee in private practice, you get a lot of leeway and conduct a lot of business privately, which I cover in my online course, How to Get into a Private or Group Practice While You’re Pre-Licensed: A Step by Step Guide to Hit the Ground Running!” Every state and licensing board has it’s own protocol for what pre- and provisionally-licensed therapists can and cannot do in private practice. So, you don’t have to be in the dark about it. It’s all written on state licensing board web sites.
If you work as a W-2, you’re an employee technically speaking. Whereas an independent contractor position allows you to collect and keep payments from clients, and you pay your supervisor and landlord independently. So working as a W-2 there are more factors to consider. You’ll want to negotiate your pay rate based on several factors:
- the supervisor’s session rate; this will be the minimum to calculate what you deduct from your pay rate. If your supervisor charges $140/therapy client then you’ll want to be able to pay them at least this amount, which would be $560/month.
- if your supervisor will provide office space, calculate the value of that or their going rate; for instance, if they’re giving you office space for three days a week and that office space gets rented out for $100/day, that office space you’ll be getting is worth $300/week.
- if your supervisor will provide furnishings, calculate that value into what you ask for.
As a W-2, you’ll most likely want to negotiate based on a percentage of your potential income. This means your supervisor will get a portion of your gross income in exchange for supervising you.
For instance there are common acceptable fee splits: 50/50, 60/40 and 70/30. The more income potential you have, the higher percentage rate you can confidently ask for and get. You can assume if you’re grossing $3.5K per month, then a 60/40 split would provide you with $2,100 before taxes are deducted. And you can see how this provides the supervisor with $1,400 before taxes. We can presume this would cover the office space and supervision sessions.
The key is to consider asking your supervisor for a rate that will adequately cover their expenses, so it’s not costing them to be your supervisor. Ideally, you want it to be a win-win for you both where you make a good rate for where you’re at in your career and they benefit from giving you an opportunity to grow your business. Your negotiation efforts will make a big difference here.
In my online course, How to Get into a Private or Group Practice While You’re Pre-Licensed: A Step by Step Guide to Hit the Ground Running!” I teach how to easily maximize your pay rate by getting a few things in momentum and in place. Then, I reveal how to negotiate your pay rate to earn the most possible. I show how to go from earning 50/50 to 60/40 to 70/30 and beyond. This equates to being able to earn thousands more in your pocket! I teach how you can go from making zero per hour to $100/hour take home.
As an independent contractor, you can pay a supervisor per session so no pay splits are necessary. Say for instance you work 20 hours a week and you’re required 2 hours of supervision per week. You can negotiate with them to pay $240/week. Or say you work 9 hours in your practice, you could pay $120/week. If they offer you office space or other perks, you may add to that number to compensate for the space and time invested in you and your career.
Either way you’re required to operate based on state licensing board rules. But no matter which way you go–working as a W-2 or independent contractor (1099), there are ways to maximize your income potential so you can earn as much as possible while creating a beneficial working relationship with a supervisor. Learn more here. Up next, some differences between private and group practice wages.
Tyra Butler is a licensed therapist and has an email list that she delivers her exclusive content to, including blogs, powerful motivational and inspirational pieces, free advice and other valuable resources. Sign up for her list here. She works with pre-, provisionally-licensed and early career therapists to help them find paid work, start and grow their practices and make important decisions and career moves. She offers coaching and consultation, and as a professional writer provides copywriting coaching to create web site, marketing content and formulate innovative ideas to create additional income. She’s also the founder of the Facebook group Early Career Clinician Community where she gives some of her best tips and inspiration to succeed on the road to licensure. Tyra has been in private practice for 10 years, with 15 years in mental health, business and professional copywriting. Learn more about her services and blog here. Contact her here.