The Real Cost of Running a Private Therapy Practice in 2026

Ask a therapist in private practice what their overhead is and you will often hear their rent and their EHR subscription. The real number is larger, and the gap comes from three places. Some costs arrive once a year, such as insurance premiums, license renewals, and continuing education, so they never feel like monthly costs. Some scale with revenue, such as card processing and write-offs, so they grow quietly as the practice does. And revenue itself is planned on a full calendar, when no-shows and weeks off mean that not every scheduled hour is paid.

This article adds it all up for one typical solo practice, using published prices and the same model as our Overhead Calculator, then shows what changes with location, setting, and a few common planning mistakes.

A typical solo practice, line by line

Take a licensed clinical social worker in a solo office, at national-average rent, who schedules 20 sessions a week for 47 weeks a year at $125 a session, loses 13% of sessions to no-shows and late cancellations, bills insurance, and handles billing in-house. With the calculator's starting values, this is what the practice costs to run each month:

That is $20,262 a year, or 20% of what the practice bills. To cover it, the practice needs 3 attended sessions a week before the clinician earns anything, and every attended hour carries $25 of overhead. The largest single line is rent, at 38% of the total.

The break-even number comes from simple arithmetic. After card processing and write-offs, each $125 session leaves about $115 to pay the fixed costs, which come to $1,019 a month. Divide the fixed costs by what each session leaves, round up, and spread the result over the weeks you work, and you have the sessions a week that keep the practice at zero: 9 a month in this example. Everything above that line is income before taxes, which is why a few extra sessions a week change the picture more than trimming a small subscription does.

The five categories of overhead

Practice & caseload

This group sets the revenue side rather than the cost side, but every ratio depends on it. The starting fee is the Medicare national payment for an hour-long psychotherapy session: $167 for psychologists and $125 for clinical social workers, counselors, and marriage and family therapists, whom Medicare pays at 75% of the psychologist rate. Many private-pay fees are higher, so this is a conservative place to start.

Office & tech

Rent starts from a national baseline of $640 a month for a solo office and $384 for a shared one, adjusted for your state. Published EHR prices for a single clinician range from $39 to $85 a month across the 7 plans we checked, with a median of $69. Most of those plans include video, so the remaining tools, e-fax and encrypted email, add about $37, and a HIPAA-capable phone line $24. A hybrid setup, with a part-time office, starts at $192 in rent.

Insurance & compliance

Malpractice coverage runs about $48 a month for a clinical social worker and $73 for a psychologist, based on the median of quoted policies, and general liability plus a cyber endorsement about $62. License renewals and continuing education run $240 a year for a clinical social worker, spread across twelve months. If you bill insurance, your EHR passes through the annual billing code license, about $20 a year.

The license-dependent starting values differ more than most people expect:

License fees are the median of California, Texas, and Florida, annualized, plus the median number of continuing education hours at a market price per hour. For pre-licensed clinicians we use California alone, because Texas and Florida don't renew associate registrations every year. Pre-licensed clinicians pay far less for coverage but usually also pay for supervision, which this calculator leaves for you to enter under networking and consultation.

Billing & payment

These costs scale with revenue. Card processing takes about 2.99% of what you collect, write-offs 5% of what you bill, and an outside billing service, if you use one, 6% of collections. The write-off figure is the upper limit that medical-practice benchmarks treat as good practice, so your own number may be lower. In the example, 8% of every dollar billed goes to these costs before any fixed cost is paid.

Marketing & growth

A directory listing costs $30 a month, a basic website $69, and networking, referral, and consultation costs $18. This is the most variable category: an established practice with a waitlist may spend almost nothing, while a new one may spend several times these amounts on ads.

How much location matters

Rent is the one cost the calculator adjusts for location. It scales the rent baseline by each state's Practice Expense Geographic Practice Cost Index (GPCI), which Medicare uses to adjust payments for local practice costs. Where a state has several Medicare payment areas, we average them. Here is what that does to the $640 solo-office baseline in the five highest- and five lowest-cost states:

The index was built for medical practices, not therapy offices, but it measures the right thing: what office space and staff cost in an area compared with the national average. That makes it a reasonable way to move a national rent figure toward your market, and it is published, so anyone can check it.

A state average hides a lot. An office in a major city usually costs more than its state's figure, and a rural office less, so use the starting value only until you have a real quote.

Three expensive planning mistakes

1. Planning on a full calendar

If you plan on working 52 weeks with no missed sessions, revenue looks 27% higher than it does with 47 working weeks and a 13% no-show rate. Overhead doesn't shrink when a client cancels or when you take a vacation, so the break-even point should be measured against the sessions you actually hold.

2. Paying for a full-time office you use part-time

In the example, total overhead is $1,689 a month in a solo office, $1,433 in a shared office, and $1,049 fully remote. If you see clients in person only a few days a week, a shared or part-time arrangement can cut your largest fixed cost without changing anything else.

3. Forgetting the costs that grow with revenue

Fixed costs get the attention, but card processing, write-offs, and percentage-based billing services take a share of every session. Raising your fee or adding sessions increases them too. Count them when you calculate break-even, not as an afterthought.

What a healthy overhead percentage looks like

There is no published standard for solo therapy practices. We use 25% to 40% of revenue as a planning range: below it, check that nothing is missing; above it, a large share of every session pays for the practice rather than for you. The example practice sits at 20% in a solo office and 12% fully remote, which shows how much the setting alone moves the ratio. Treat the range as a way to spot outliers in your own numbers, not as a grade.

Notice that the example lands below the range. That is not because a solo practice is cheap to run; it is because the example only contains the costs listed above, at published prices. Real practices usually have more, which is exactly what a low result should prompt you to look for.

What these numbers leave out

The calculator covers the recurring costs of running a practice. It leaves out several things you should still plan for:

• Staff, a bookkeeper, or an accountant, if you use them.
• Office supplies, furniture, and any utilities not included in your rent.
• Clinical supervision, if you are pre-licensed, and paid consultation beyond association dues.
• One-time startup costs, such as forming a business, setting up a website, or a security deposit.
• Your own pay, health insurance, retirement savings, and income and self-employment taxes.

The last item matters most. Overhead is what the practice costs before you are paid, so a practice that covers its overhead has only reached the starting line. Use the break-even number as a floor, not a target.

Run your own numbers

Every practice differs from this example, sometimes by a lot. The calculator starts from the same published values, adjusts rent for your state, and lets you replace any line with your own figure. It shows your monthly overhead, your break-even caseload, and your overhead per billable hour as you type, and nothing you enter is stored.