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Today, I walk through four compensation models that work for testing and therapy practices – percentage split (fee-for-service), salary + production bonus, salary + profit share, and flat hourly – plus when each model makes sense. I break down the math behind forecasting (capacity, reimbursement, payroll taxes, PTO, benefits), show where owners get into trouble (overpaying early, ignoring utilization, fuzzy admin time), and share a step-by-step rollout plan with transparency practices that improve retention and engagement. You’ll leave with clear guardrails to pay people well without sinking the ship.
Main Topics
- Why compensation causes the most stress for owners and how it became confusing (00:00)
- Percentage split (fee-for-service): ranges, pros/cons, when it fits (02:23)
- Salary + production bonus: structure, turnover impact, transparency keys (04:24)
- Salary + profit share: culture/retention upside and owner transparency (06:51)
- Flat hourly per billed hour: predictability vs. reimbursement risk (09:18)
- Forecasting the math: eval capacity → revenue → sustainable pay (11:40)
- Aligning pay with values: quality, timeliness, client satisfaction (16:30)
- Pitfalls and guardrails: utilization, admin caps, COL raises, communication cadence (18:55)
Cool Things Mentioned
- The Testing Psychologist mastermind groups and business consulting
- Reverb: the premier AI-powered report-writing platform for testing psychologists
- APA Work in America Report (context on workplace stress): www.apa.org/pubs/reports/work-in-america/2024/2024-work-in-america-report.pdf [American Psychological Association]
- BLS Occupational Outlook—Psychologists (national wage benchmarks): www.bls.gov/ooh/life-physical-and-social-science/psychologists.htm [Bureau of Labor Statistics]
- BLS Occupational Employment & Wages—May 2024 (wage tables): www.bls.gov/news.release/pdf/ocwage.pdf [Bureau of Labor Statistics]
- Pay transparency and business outcomes (SHRM research summary): www.shrm.org/topics-tools/news/inclusion-diversity/shrm-research-pay-transparency-improves-business-outcomes-close-wage-gap [SHRM]
- Profit sharing & retention (PayScale brief): www.payscale.com/compensation-trends/new-research-finds-profit-sharing-increases-employee-retention-and-engagement [Payscale]
- WorldatWork Pay Transparency Study (policy approaches): worldatwork.org/research/pay-transparency-study [WorldatWork]
Featured Resources
I am honored to partner with two AMAZING companies to help improve your testing practice!
PAR is a long time supporter of the Testing Psychologist podcast, and I will continue to bring you featured items from their catalog! Listen to each episode for specific product recommendations and links. Learn more at www.parinc.com.
TherapyNotes is the leading EHR system for mental health practitioners. I’ve used TherapyNotes for over 10 years, and it just keeps getting better. Use this link and the promo code “testing” to get two free months and try it for yourself! www.therapynotes.com/testing
The Testing Psychologist podcast is approved for CEU’s!
I’ve partnered with At Health to offer CE credits for podcast episodes! Visit this link to access current and past episodes available for CE credit. You can use code “TTP10” for a discount on ALL the course credits you purchase from At Health!
About Dr. Jeremy Sharp
I’m a licensed psychologist and Clinical Director at the Colorado Center for Assessment & Counseling, a private practice that I founded in 2009 and have grown to over 20 clinicians. I earned my undergraduate degree in Experimental Psychology from the University of South Carolina before getting my Master’s and PhD in Counseling Psychology from Colorado State University. These days, I specialize in psychological and neuropsychological evaluation with kids and adolescents.
As the host of the Testing Psychologist Podcast, I provide private practice consulting for psychologists and other mental health professionals who want to start or grow psychological testing services in their practices. I live in Fort Collins, Colorado with my wife (also a therapist) and two young kids.
Ready to grow your testing services? Click below to schedule a complimentary 30-minute pre-consulting call!