Why Therapy Costs What it Does

You may have noticed that rates for psychologists in Australia range from around $180-$270 an hour. This would be a pretty big pre-tax income, so it is natural that many people are curious about why psychology fees cost what they do. This blog is here to help answer this question.

First, psychologist’s don’t take home their hourly rate as their income. It’s understandable if you thought this was the case, especially if you are paid a salary.

The majority of a psychologist’s hourly fee goes towards expenses, tax and superannuation. What’s leftover is the psychologist’s income.

When you pay a psychologist’s fee it covers the following:

• The psychologist’s time and expertise spent in the session with you

• The psychologist’s time and expertise before the session in researching, preparing tailored material and reviewing their case notes about you

• The psychologist’s time and expertise after the session completing case notes, reviewing and revising your treatment plan, and reviewing and revising their formulation of your concerns to improve treatment for you

• The psychologist’s student loans. I spent 12 years at university completing my bachelors, honours, masters, and PhD in psychology. That’s a lot of student fees

• The cost of mandatory professional registration fees to the Australian Health Practitioner Regulation Agency (AHPRA). AHPRA ensures that psychologists follow a strict set of ethical codes and laws

• The cost of mandatory professional insurances, including professional indemnity insurance and cyber cover

• The cost of belonging to a professional association to ensure that the psychologist continues to practise ethically

• The cost of room rent in a professional building (at least $18,000 a year) which may include the cost of having a lease prepared by a legal professional

• The cost of hiring an administrative assistant/practice manager

• The cost of computing equipment (iPad, laptop)

• The cost of software that is compliant with privacy laws, including Telehealth software, practice management software, secure messaging service, email, cloud storage

• The cost of running a website

• The cost of running a work mobile number and internet

• The cost of appointment reminder fees

• The cost of processing Medicare rebates

• The cost of credit card processing fees

• The cost of SMS’s, especially if the psychologist needs to follow-up on unpaid fees or other administrative duties

• The cost of professional clinical supervision to get a third-person perspective on cases and improve treatment for you

• The cost of undertaking mandatory professional development to improve treatment for you

• The cost of maintaining a professional and up-to-date library (books, assessment instruments, worksheets, apps) to improve treatment for you

• The cost of office equipment e.g. tissues, whiteboards, sensory objects

• The cost of furnishing a professional office

• The cost of business cards and marketing materials to ensure that GPs and other health professionals can connect patients who could benefit from psychological help with me

… And a few more things. When you consider the above expenses and add tax and superannuation on top, it makes more sense why psychologists charge the fee that they do and why they are reluctant or unwilling to reduce their fee when asked to do so.

In summary, psychologist’s set their fees according to the time and expertise they put into their client’s treatment while also taking into account their expenses, tax, and superannuation.

I hope this helps your understanding going forward.