Average salary for psychotherapist in canada

John Driscoll.Empire Photography/Handout

Job: Psychotherapist

The role: Psychotherapists – also known as counselling therapists in some provinces – provide guidance, support and therapy to clients suffering from a range of personal and professional problems. That could include relationship support, addiction counselling, PTSD and trauma counselling, family support, career and educational support and more.

“The big thing that they have in common is people are addressing something that is interfering with healthy living,” explains John Driscoll, the national president of the Canadian Counseling and Psychotherapy Association (CCPA). “They come to a counsellor to seek some professional support, treatment or therapy that will address those particular issues and help them move forward in a positive way.”

Psychotherapists are employed by a range of public and private institutions, and also work in private practice. Mr. Driscoll explains they are often employed by educational institutions to provide counselling to students, by large organizations to provide services to employees and by hospitals and government health-care agencies to help support patients. As a result, their daily tasks will vary depending on the type of clients they see, though a majority spend most of their workday interacting directly with clients.

“Typical tasks across the board would include preparing workshops and working with groups and, particularly in institutional settings, dealing with crisis situations or serious situations that require counselling and psychotherapy skills,” says Mr. Driscoll. “In most cases it is a fair amount of sitting with individual clients, families or in group settings to provide support.”

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Salary: The salary of a psychotherapist in Canada often depends on their geographical location, sector and employer, notes Mr. Driscoll. For example, he says those employed in institutional settings typically earn between $60,000 and $80,000 annually if they’re part of a union, and between $50,000 and $70,000 if they are not.

Meanwhile, those in private practice will see broad salary ranges depending on the type of psychotherapy they practice and their geographical location, as practitioners in urban centres typically charge more for their services.

According to Canadian job listings aggregate website Neuvoo, the average annual salary of a psychotherapist in Canada is roughly $74,000.

Education: Counselling and psychotherapy is currently regulated in New Brunswick, Nova Scotia, Ontario and Quebec, and will soon be regulated in Alberta as well. In those provinces, practitioners are required to hold a Canadian Certified Counsellor designation from the CCPA in order to practice, while the certification is optional elsewhere in the country.

Mr. Driscoll says that most employers also require a Master’s level degree or equivalent in psychology or a related field, and some academic settings may even require a PhD.

“There are people who are hired as counsellors who might have a two-year diploma, but generally speaking in most capacities and in most institutional settings and private practice generally, people would have a Master’s level education, or equivalent,” he explains.

Job prospects: According to Mr. Driscoll job prospects in the industry are good, and continue to increase as more employers offer counselling services to their employees.

“In addition to being eligible for employee assistance support, which is usually done by a counsellor, there are often funding arrangements in an employee’s package that allows them to meet with a psychologist or a social worker on their own,” he says.

Challenges: While the job prospects for psychotherapists are increasing, Mr. Driscoll says most employers require three to five years experience for entry-level positions, forcing many to begin their career in lower-paying sectors like social work.

“Psychotherapists may have to begin their profession in work settings that are very important but might not provide the financial remuneration they are hoping for,” he explains. “For example, many non-profit agencies hire counsellors to support the clients they work with, and the pay rates for those jobs is okay, but it might not meet the expectations of a professional with that level of education.”

Why they do it: Mr. Driscoll says many are drawn to the profession for the opportunity to provide direct support to those in need. “The people who have an interest in doing this kind of work generally have an interest in helping people.”

Misconceptions: People frequently believe that psychotherapists offer direct solutions to personal problems, and Mr. Driscoll says they are often disappointed to discover how much work is still required on their part.

“A person can have the expectation that a counsellor or psychotherapist is going to provide them with the miracle answer, or provide them with the fix to their concerns,” he says. “Certainly a psychotherapist has knowledge of therapies that can be helpful to people, but it’s a journey that you do together, and the person or group seeking that help has to take on some responsibility.”

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What Psychologists Do

About this section

Industrial-organizational psychologists apply psychological research and methods to workplace issues.

Psychologists study cognitive, emotional, and social processes and behavior by observing, interpreting, and recording how people relate to one another and to their environments. They use their findings to help improve processes and behaviors.

Duties

Psychologists typically do the following:

• Conduct scientific studies of behavior and brain function
• Observe, interview, and survey individuals
• Identify psychological, emotional, behavioral, or organizational issues and diagnose disorders
• Research and identify behavioral or emotional patterns
• Test for patterns that will help them better understand and predict behavior
• Discuss the treatment of problems with clients
• Write articles, research papers, and reports to share findings and educate others
• Supervise interns, clinicians, and counseling professionals

Psychologists seek to understand and explain thoughts, emotions, feelings, and behavior. They use techniques such as observation, assessment, and experimentation to develop theories about the beliefs and feelings that influence individuals.

Psychologists often gather information and evaluate behavior through controlled laboratory experiments, psychoanalysis, or psychotherapy. They also may administer personality, performance, aptitude, or intelligence tests. They look for patterns of behavior or relationships between events, and they use this information when testing theories in their research or when treating patients.

The following are examples of types of psychologists:

Clinical psychologists assess, diagnose, and treat mental, emotional, and behavioral disorders. Clinical psychologists help people deal with problems ranging from short-term personal issues to severe, chronic conditions.

Clinical psychologists are trained to use a variety of approaches to help individuals. Although strategies generally differ by specialty, clinical psychologists often interview patients, give diagnostic tests, and provide individual, family, or group psychotherapy. They also design behavior modification programs and help patients implement their particular program. Some clinical psychologists focus on specific populations, such as children or the elderly, or on certain specialties, such as neuropsychology.

Clinical psychologists often consult with other health professionals regarding the best treatment for patients, especially treatment that includes medication. Currently, only Idaho, Illinois, Iowa, Louisiana, and New Mexico allow clinical psychologists to prescribe medication to patients.

Counseling psychologists help patients deal with and understand problems, including issues at home, at the workplace, or in their community. Through counseling, these psychologists work with patients to identify their strengths or resources they can use to manage problems. For information on other counseling occupations, see the profiles on marriage and family therapists, substance abuse, behavioral disorder, and mental health counselors, and social workers.

Developmental psychologists study the psychological progress and development that take place throughout life. Many developmental psychologists focus on children and adolescents, but they also may study aging and problems facing older adults.

Forensic psychologists use psychological principles in the legal and criminal justice system to help judges, attorneys, and other legal specialists understand the psychological aspects of a particular case. They often testify in court as expert witnesses. They typically specialize in family, civil, or criminal casework.

Industrial–organizational psychologists apply psychology to the workplace by using psychological principles and research methods to solve problems and improve the quality of worklife. They study issues such as workplace productivity, management or employee working styles, and employee morale. They also help top executives, training and development managers, and training and development specialists with policy planning, employee screening or training, and organizational development.

Rehabilitation psychologists work with physically or developmentally disabled individuals. They help improve quality of life or help individuals adjust after a major illness or accident. They may work with physical therapists and teachers to improve health and learning outcomes.

School psychologists apply psychological principles and techniques to education disorders and developmental disorders. They may address student learning and behavioral problems; design and implement performance plans, and evaluate performances; and counsel students and families. They also may consult with other school-based professionals to suggest improvements to teaching, learning, and administrative strategies.

Some psychologists become postsecondary teachers or high school teachers.

There is lots of ink spilled on what to expect a private practice therapist’s salary to be. Frankly, some of the numbers are ridiculous. One post inaccurately reports, “The average salary for a private practice clinical therapist is $150,000 per year.” Wrong! Of course, a few private practice therapists make that, but that is nowhere near the average. Putting such inaccurate numbers out there sets people up for disappointment.

Here we will be far more realistic about what a real-world private practice therapist’s salary is. Let’s begin.

Understanding how private practice works

Before we can determine a typical private practice therapist’s salary, we need to sort out some of the unique features of a private practice arrangement. 

Where does the money for a private practice therapist’s salary come from?

The private practice business model is this. The private practice therapist, or the agency they work for, charges a fee for the clinical service they provide. The length of time one spends with the client(s) is usually the basis for the price. Additionally, therapists utilize different CPTs to designate the length of a treatment session. 

Typically, in the USA, the insurance company and the client each pay part of the fee. And in all cases where an insurance company is involved, they set the maximum amount they and the client will pay. 

Elsewhere I have written about how mental health providers do not really control their payment structure. Insurance companies do. See, Wealth in mental health–Why isn’t there more? And for more on the pros and cons of joining insurance panels, see, Why join insurance panels.

Typically, private practice therapists do not get a “salary”

In the real world, most private practice therapists do not get a salary. Instead, in an agency, they are paid a “percentage of collections” and in solo practice, they keep whatever is left over after paying the bills.

So how does the “percentage of collections” system work?

Money is collected for a clinician’s services. This income is the basis for the private practice therapist’s pay. Typically, a percentage of the funds is paid directly to the private practice therapist in the form of wages. The organization retains the rest to cover its expenses. 

This approach is sometimes called productivity-based pay and is perfectly legal. In 2020, I surveyed 40 clinicians who shared data about the splits. The 40/60, 50/50, 60/40, and even 70/30 splits were not uncommon. For the complete summary, see Survey results: Therapist wages and benefits from 40 practices.

Interestingly, productivity-based pay systems are popular with physicians as well. According to the latest physician salary info, productivity is a basis for pay for the majority. See, Pay is productivity-based for nearly 55% of physicians.

And there will be a ramping-up period

Productivity-based pay systems have their downsides. For example, because private practice pay is dependent on collections, any delay in collecting for a service means a delay in wages.  

For example, especially when working with insurance companies, there ordinarily will be a lag between the service date and receiving full payment. The delay is due to the administrative time it takes to bill for the service, evaluate the claim, and receive compensation. These processes take time and can add from 15 to 45 days between the service and payment dates. 

These delays are most noticeable when ramping up at the beginning of employment in private practice. The newly beginning clinician is building up the number of client hours and dealing with the payment delays. However, every one in private practice found a way to get through these financially-trying beginning phases. In the end, most find that higher levels of compensation warrant tolerating the delays.

Contracts define the arrangement

In most employment settings, the organization will have developed an employment contract that will spell out the parameters of compensation and other details. Obviously, read the agreement thoroughly and ask lots of questions. For more, see: How to construct the best possible psychotherapist employment contract.

Methods for determining a private practice therapist’s salary

Now we are ready to look at several ways to estimate an actual private practice therapist’s salary. For example, we could: 

1. Dig out some national occupational survey data on psychotherapists’ salaries
2. Estimate the factors which determine how much a therapist makes
3. Interview people we know who are practicing in the way we would want

I am going to summarize data from all three sources. 

1. National Survey Data

Our first point of comparison is to look at the May 2020 National Occupational Employment and Wage Estimates collected by the United States Department of Labor, Bureau of Labor Statistics. Here we see survey data collected from people in the field. Buried in the data are the salaries for mental health clinicians. In round numbers, psychotherapists’ yearly salaries are these:

• Social Workers
  • median annual income = $52,000
  • those in the 90% percentile (i.e. only the top 10%) make ≥ $85,000
• Counselors
  • median annual income = $50,000
  • those in the 90% percentile make ≥ $85,000
• Marriage and Family Therapists
  • median annual income = $50,000
  • those in the 90% percentile make ≥ $92,000
• Psychologists
  • median annual income = $82,000
  • those in the 90% percentile make ≥ $135,000

So what does this mean?

In short, when we look at actual master-level psychotherapists’ annual salaries, the most frequently reported salary is around $50,000 to $52,000 per year. Very few earn above $100,000 per year. In comparison, psychologists see higher wages with a much higher upside potential than the other mental health disciplines.

As a side note, I compared the 2018 data with the 2020 data to look for trends. In general, the median income across all four professions went down a couple of thousand dollars. The drop signifies that there are more lower-paying positions in 2020 than in 2018. Interestingly, those in the 90th percentile saw their salaries increase. So additionally, it seems that typically those at the top are doing even better than they were.

So can we figure out how to make a higher mental health therapist salary? That leads us to our second method for determining a private practice therapist’s salary.

2. A private practice therapist salary calculator

I have developed a “calculator” that takes five key factors that determine private practice therapists’ salaries. These factors are:

• Number of sessions you provide
• Your collections rate, i.e., the average amount you collect for each session
• How many weeks you are willing to work in a year
• Your expenses
• The benefit costs and tax obligations you have

In the calculator, you can adjust each factor and see how it shapes the bottom line wages. See, How to calculate a psychotherapist’s private practice pay.

Based on the assumptions one makes in the app, a psychotherapist can potentially have a pre-tax salary between $41,400 to $175,000. That range is not very helpful. But if you select variables based on what you know about your particular situation, we will get a pretty good estimate tailored to you. Furthermore, the calculator may help you identify ways to increase your private practice therapist’s salary.

I have also written: 

3. Interview those in the field

By far, the most challenging way to collect private practice salary information is to ask those who work in positions you aspire to. But of course, this method has many drawbacks. 

First, all people are reluctant to share salary information. But they might share, in general terms, what a person in a psychotherapy position like theirs might expect to make. But clearly, this is a delicate conversation.

Second, money has an emotional meaning for people. This topic is explored in the books “Mind over Money: Overcoming the Money Disorders That Threaten Our Financial Health” and then “Financial Therapy: Theory, Research, and Practice.” I highly recommend both if you are interested in how attitudes about money are formed and deformed.

However, I do think it is appropriate, in a job interview, to ask something like, “So if I am willing to work about x clinical hours per week, what might I expect to be my annual salary?” The owners typically know how much others in their practice make. 

So how much does a private practice psychotherapist make?

Of course, a mental health therapist’s salary all depends on many factors. But here, we have at least given you reasonable, real-world data and an understanding of the factors contributing to an actual private practice therapist’s salary.