I remember when I first launched into private practice after getting licensed I thought I could set my rates once and not touch them again for many years. In reality, I quickly realized after accounting for inflation and rising costs of expenses that I would have to raise my rates fairly often if I wanted to continue earning the same income, let alone earn more over time.
Today’s post walks you through the process of how to tell your clients you’re raising your rates in private practice and offers the oh-so-desired sample rate increase letter that you can swipe for free from right under my nose! Read through to the end to snag the increase letter.
Raising your rates in private practice
Why you need to raise your rates
Let’s get something out of the way first: you are FULLY allowed to raise your rates in private practice! Many therapists I talk to express concern that once they advertise a certain rate then they have to keep it that way forever.
The truth is, no business operates under this model because it isn’t sustainable. Inflation rises, our overhead costs increase, our cost of living increases. If we never raise our rates, we’re effectively giving ourselves a pay cut with each passing year. Or we may be working ourselves into the ground seeing more and more clients just to keep up the same standard of living.
I encourage you to make a plan to raise your rates on some regular basis. Whether you choose to tag on a certain percentage annually, or if you choose to raise your rates based on how busy you become, it’s important to know that if you’re in this journey to make a living, raising your rate is part of the process.
How much should I raise my rates in private practice?
How much is the right amount to raise your rate? I have a full article walking you through the process of setting your rate in private practice. Check out that post to help you reevaluate your rate and set it so that you can earn the income you desire while seeing your ideal number of clients. Check out that post here: Set Your Hourly Rate in Psychotherapy Private Practice.
Once you decide to raising your rate, the next (potentially) horrific part of the process is going about announcing the change to your clients.
How to tell clients you’re raising your rates
Most therapists are fearful that clients won’t react well to a rate increase, or that they may lose clients over it. Though both of these outcomes are possible, I’ve found most clients are completely understanding that we need to raise our rates from time to time.
Furthermore, there are various ways to go about announcing a rate change to help clients feel more comfortable with the change. Here are some tips to help the process go as smoothly as possible:
- Have a clause in your informed consent giving clients a heads up that you may raise your rate in the course of counseling. You can elaborate here how you’ll go about making that announcement so they’re prepared for it.
- Consider giving your clients advance notice. If a client potentially can’t afford your new rate, this may be helpful to allow them space to transition out slowly and get them situated with a new therapist if needed. This also helps clients plan their budget and make changes accordingly.
- Frame the change in a way that helps clients empathize without you coming across as needy. Be respectful of the service you offer while also being upfront about increased inflation and overhead costs. You can frame it in such a way to make clear that raising your rate will allow you to offer the same quality of care moving forward.
- Consider offering the change in a way that helps clients feel cared for. Personally, I frame my rate change as “effective immediately” for new clients, but let existing clients know it won’t apply to them for a 90-day window because I appreciate their business.
- Offer the announcement in writing. Whether on paper or via email after you’ve given a verbal announcement, having a written document helps clients remember and formalizes the process. Not sure what to write in the letter? I have a free PDF sample of my own rate increase letter. Feel free to swipe the file for yourself and personalize it to make it your own. Here’s a link to my free sample rate increase letter:
Free Sample Rate Increase Letter
to Clients in Private Practice
If you are mindful of how you raise your rates, making the announcement to your clients doesn’t need to be counter-therapeutic. A 90-day notice is customary, though not required. I also remind my clients of the upcoming rate increase a month in advance as well as a week in advance so that they aren’t caught off guard when it comes time to charge the higher rate.
That’s it! Most of the work on this one is learning to overcome our own insecurities around whether we have permission to raise our rate. If you needed that nudge – let this post be it! It’s a natural part of running a business.
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I hope this post helps you prepare to tell your clients you’re raising your rate. Until next time, from one therapist to another: I wish you well!
Hi Dr. Fang! Do you know if it’s illegal to raise rates without first giving notice to patients? My psychiatrist did my usual check up and then AFTER the fact told me that he had raised his rates and acted confused like he was surprised he didn’t tell me, though I believe it was a fake reaction to keep it casual. I ended up paying the raised rate for that session and those after. Thank you!
Dr. Marie Fang says
Yikes! Yes, our governing laws (at least in CA!) are quite clear that we need to communicate our rates and rate changes as soon as is possible, and certainly prior to the session where the rate change takes effect. However, it’s possible that these laws may differ in other states.
Traditionally, it’s courtesy to give a couple of months’ notice, though it’s not required. Sorry that you found yourself in that situation!
Thank you for your response! I’ll dig deeper into Florida law.