Is a 60/40 split fair? Where a clinician's fee actually goes

A 60/40 split sounds like the practice takes 40% of your work. It doesn't, quite. The 40% pays for everything that puts a client in your chair and a paycheck in your account, and the 60% is not what you take home. Neither number is your pay rate. To judge a split fairly you need the whole stack on both sides of it, plus your own hour count, and once you have those the percentage mostly stops mattering.

Where the practice's 40% goes

Take a $150 session on a 60/40 split. You're credited $90 and the practice keeps $60. In round example numbers, here is roughly where that $60 goes. Your practice will differ, but the categories won't.

About $7 is the practice's half of Social Security and Medicare on your $90, if you're a W-2 employee. You never see that money, but it's spent on you. About $20 covers rent, the health record and other software, card processing and billing. About $13 goes to admin: the person answering intake calls, scheduling, chasing a declined card, and the rent on hours that sit empty when a client doesn't show. Supervision, consultation and training take another $5 or so. If the practice offers health insurance or a retirement match, that comes out of the $60 too. In this example it doesn't.

That leaves the owner about $15, or 10% of the fee. It's real money, and it's also the practice's only cushion. The lease is due in a slow month, payroll is due before the insurance check clears, and the owner carries a new clinician's empty schedule while it fills. A practice running much thinner than that has nothing set aside for a bad quarter, and that's your job security too.

Where your 60% goes

Now your side. At $90 a session, 25 sessions a week for about 46 working weeks comes to roughly $103,500 a year. As a W-2 employee filing single in a state with no income tax, federal income tax plus your share of Social Security and Medicare takes about 21% of that. So each $90 session puts about $71 in your account, and a full week puts in about $1,775.

But 25 sessions isn't 25 hours of work. Notes, email, consultation, care coordination and the call with a client's parent can easily add ten unpaid hours, which makes it a 35-hour week. $1,775 over 35 hours is about $51 an hour. That's the honest pay rate on this offer, and it's a long way from 60% or $90 a session.

Why the percentage misleads

A bigger percentage can pay you less. Say a second practice offers 65/35 on the same $150 fee but has no front desk, so you do your own scheduling and billing. That's $97.50 a session, about $76 after taxes, and about $1,907 a week. If the extra admin adds five hours, you're working 40 hours for about $48 an hour. The 65% offer pays less for your time than the 60% one.

It runs the other way too. A practice offering 55% that fills your schedule in a month, covers your supervision hours and handles every billing call can beat a 70% offer where you build your own caseload from nothing. How fast the schedule fills and how many unpaid hours sit around each session move your real rate more than five points of split do.

A word on W-2 and 1099

If the offer is a 1099 contract, you pay both halves of Social Security and Medicare yourself, including the share the practice covered in that $7 above. On the same $90 a session, that costs you about $5,000 a year in this example. A fair 1099 offer usually pays a higher split to make up for it, since the practice's own cost per session is lower for the same reason. Whether a role can properly be a 1099 at all is its own question, and the label alone shouldn't decide an offer.

The rule for judging any split

Compare offers on after-tax dollars per hour you actually work, not on the percentage. For each offer you need four things: the fee, your share of it, how many sessions a week you'll really see once your caseload is full, and how many unpaid hours the job asks of you around them. Then ask the practice what its share pays for. An owner who knows the numbers can answer that in a minute, and the answer tells you most of what the split can't.

We built the free Offer Decoder to do the tax half for you. Paste the offer or type in the terms, either your split and what you expect to collect each month or a salary, then pick W-2 or 1099, your filing status, your state, your clinical hours a week and the weeks you work a year. It shows what you'd keep a year and a month, your effective tax rate, your take-home per clinical hour over those weeks, and the same pay taxed the other way. It counts clinical hours only, so for the last step, divide by your whole week. Nothing you enter leaves your browser.

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