Chartered Financial Analyst with 15+ years experience in small business finance and healthcare practice management.
Find your therapy practice’s breakeven point. Enter any three variables—Monthly Fixed Costs, Avg. Session Fee, Variable Cost per Session, or Breakeven Sessions—to solve for the fourth.
Therapist Breakeven Calculator
Therapist Breakeven Formula
The breakeven formula for a therapist or private practice finds the total number of client sessions (Q) you must hold each month for your total revenue to cover all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Session Fee (P):
P = (F / Q) + V
Solve for Variable Cost per Session (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., office rent, malpractice insurance, EHR/scheduling software fees, marketing, utilities).
- Avg. Session Fee (P): Your average *revenue* per client session (this is your full fee, or the average of co-pays and insurance reimbursements).
- Variable Cost per Session (V): The average cost directly tied to holding one session (e.g., credit card processing fees, billing service fees, any materials used).
- Breakeven Sessions (Q): The total number of client sessions you need to hold each month to reach $0 in profit.
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What is a Therapist’s Breakeven Point?
A **Therapist’s Breakeven Point** is the exact number of client sessions (Q) you must complete in a month to cover all of your practice’s costs. It’s the minimum number of clients you need to see just to pay your bills and “keep the lights on.” Any session *after* you’ve hit this breakeven number is pure profit.
**Fixed Costs (F)** are your consistent monthly overhead, whether you see 1 client or 100. This includes your office rent, malpractice insurance, subscription fees for your EHR (Electronic Health Record) software, website hosting, psychology directory listings, and your own salary (if you pay yourself a fixed amount).
**Variable Costs (V)** are costs incurred *only* when you see a client. For most therapists, this is a small number. It mainly includes credit card processing fees (e.g., 2.9% of the session fee) or fees paid to a billing service (e.g., 5% of the fee). If you provide physical materials (like workbooks), that cost is also variable.
The **Contribution Margin** (P – V) is the profit from a single session that goes toward paying your fixed costs. If your average session fee is $150 (P) and your variable cost (billing/card fees) is $10 (V), your contribution margin is $140. This calculator finds how many $140 “profit chunks” you need to cover your total fixed costs.
How to Calculate Therapist Breakeven (Example)
Let’s calculate the breakeven point for a solo practitioner.
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Identify Monthly Fixed Costs (F):
Your monthly office rent, insurance, EHR software, and other overhead total $4,000.
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Identify Avg. Session Fee (P):
After averaging your private pay and insurance clients, you find your average revenue per session is $150.
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Identify Variable Cost per Session (V):
You calculate that credit card fees and billing service fees cost you an average of $10 per session.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per session: $150 (P) – $10 (V) = $140.
Next, divide the fixed costs by this margin:
Q = $4,000 / $140 = 28.57 -
Conclusion:
You must hold 29 sessions (rounding up) each month to cover all costs. If you work 4 weeks a month, that’s `29 / 4 = 7.25`, or about 7-8 client sessions per week just to break even.
Frequently Asked Questions (FAQ)
Your fixed costs (F) are much lower, but not zero! You should include a portion of your home rent/mortgage (home office deduction), your malpractice insurance, your telehealth platform subscription, EHR fees, and internet bill in your (F).
Look at your revenue for the last 3 months. Divide your total revenue received (from both co-pays and insurance payments) by the total number of sessions you held. This gives you your *actual* average revenue per session, which is the (P) you should use.
Yes. You should pay yourself a fixed monthly salary (an “owner’s draw”) just like any other employee. Include this amount in your (F). This ensures your breakeven calculation includes your own living expenses, which is the entire point of the business.
Enter your (F) (e.g., $4,000), your (V) (e.g., $10), and a *target* number of sessions (Q) you want to hold per month (e.g., 60 sessions, or 15/week). The calculator will solve for (P), telling you the minimum fee you must charge to hit your goal.