Why Does Therapy Cost So Much?
Stephen MacGarry MNAPCP
For many clients the process of therapy seems incredibly expensive, and to some extent they are correct. This leads to the inevitable query among clients (and therapists) about how much it is fair to be charged for a therapy session. For newly minted therapists it can feel daunting to ask a client for more than what seems like an hours wage, however there are a number of extra factors that play into the decision on the fee amount. According to the NAPCP code of ethics therapists are encouraged to contribute of their time without charge where possible. However the therapist must also ensure that their practice remains viable in order to best serve clients. For some therapists this means that they allow a certain number of free sessions per week, for others (myself included) it means that fees must be calculated to allow for free or low cost sessions in addition to other costs inherent to operating in private practice. I hope that this short article will help clients to understand the reasoning behind the apparently high cost of private therapy as well as helping fledgling therapists to calculate appropriate fees that take account of the need for affordable, low-cost and in some cases free therapy.
In order to calculate a reasonable fee for a psychotherapy session the first task is to work out what income is appropriate for an average therapist. According to Talent.com the average salary for a psychotherapist in Ireland in 2023 is €45,982 per annum. However, in order to reach that figure, the therapist generally has at least 6 years of college, and another 2 years of clinical practice working towards accreditation after that. The therapist also has a limit to the number of clients that can be seen in any week, most therapists can work between 20 and 25 client sessions per week. This limit does not make being a therapist a part time job, it reflects the requirements of the profession. In an average week, many therapists will spend 20 hours with clients, an additional 10 hours with administration tasks, at least one hour with a clinical supervisor, and another few hours reading and researching the best available interventions for their clients. The therapist must also hold professional memberships and obtain at least 30 hours of continuing professional development per year.
The figure of €45,982 is income calculated after costs, in a business sense the self-employed therapist is paid their salary as a total profit from their practice. With that in mind the additional costs of business have to be accounted for. Many therapists operate from shared practices with sessional room rates. This means that the therapists must pay the owners of the practice a fee for each hour booked in a room. Assuming a fee of €12.50 per hour for the room, a therapist operating 20 sessions per week will have an annual room cost of €13,000. They may also have to pay referral fees on top of that but for the purposes of this article I will assume that the therapist obtains referrals from their own sources. These room fees are due whether or not the client attends the session which can result in difficulties for therapists who do not charge for missed or cancelled sessions. In addition to the €13,000 for a premises from which to practice, many therapists also offer online sessions which require paid video conferencing software but for this exercise I will also ignore the costs involved in that.
Costs to the therapist for professional memberships, supervision and CPD also need to be factored into the cost of each session. Membership of the IACP (the most common membership for counsellors and psychotherapists in Ireland) costs approximately €350 per year for accredited members, and many therapists maintain more than one professional membership. Supervision is usually calculated at one hour of supervision per 20 client hours, which means it's usually at least once per week. Costs for supervision vary but the average appears to be about €70 per session, allowing for holidays that is probably going to come to about €3,000 per year. Doing the minimum 30 hours of CPD, which many therapists exceed, will cost approximately €500. So allowing for those expenses that is another €3,850.
In addition to all of this, due to the current lack of registration for counsellors and psychotherapists in Ireland, therapists must also charge VAT once they exceed €37,500 in turnover. As a service, counselling and psychotherapy are currently subject to a rate of 13.5%. So in order to reach a salary of €45,982, the self employed therapist requires a pre-VAT turnover of €62,832 or €71,314 including VAT. We also have to note that not all sessions available per year will generate revenue, in fact in order to facilitate closures for holidays, certain appointment times might not be filled and other issues, most therapists can assume that each of their 20 weekly sessions will only generate a fee 40 weeks per year.
So with this brief summary of the costs of operating a therapy practice we can say that in order to earn a salary of €45,982 per annum, therapy sessions should cost an average of €89.14 in private practice. Entry level psychotherapy salaries in Ireland, according to Talent.com should be in the region of €29,250 which translates to a fee of about €65 per session on average. Hopefully, when regulation is introduced for counsellors and psychotherapists in Ireland, the cost of providing therapy will be reduced by the VAT amount making it easier for both clients and practitioners.
As I am not an accountant, this is a simple guide and as such I am open to correction by anyone more qualified who wishes to weigh in.
