Independent valuations of Australian psychology practices

Start with sessions, not headline fees

Revenue is sessions delivered multiplied by the fee for each, less the share passed to the treating psychologist. We rebuild it from the practice management system by psychologist, funding source and delivery mode (in rooms, video or phone) and reconcile it to bank receipts. Cancellations, non-attendance, unbilled reports and uncollected gap fees explain the difference between the diary and the cash, and the valuation prices the cash.

The funding programs and what each one fixes

Under the Better Access initiative a patient with a clinically diagnosed mental disorder can claim a Medicare benefit for up to 10 individual and up to 10 group therapy mental health treatment services per calendar year. They need a mental health treatment plan from a GP or prescribed medical practitioner, or a psychiatrist assessment and management plan, plus a valid referral, though a psychiatrist or paediatrician may also refer directly. The initial course runs to up to 6 individual services, after which the psychologist reports in writing to the referrer, who reviews the patient and decides whether more are needed. So rebated volume per patient is capped, unpaid report writing is built into every course of treatment, and because the referral must generally come from the patient's MyMedicare practice or usual medical practitioner, local GP relationships are structural rather than incidental.

The benefit depends on who delivers the service. MBS explanatory note MN.6.2 restricts the psychological therapy items to psychologists who hold general registration and Psychology Board endorsement in clinical psychology, while explanatory note MN.7.4 opens the focussed psychological strategies items to any psychologist with general registration, and to accredited mental health social workers, occupational therapists with the Occupational Therapy Australia mental health endorsement and trained GPs. Psychology Board data for the quarter to 31 March 2026 records 13,990 clinical psychology endorsements against those 42,472 generally registered psychologists, so the endorsement mix sets both the benefit and the field of competitors. MBS Online records both schedule fees as last updated on 1 July 2026: the 50 minute in-rooms psychological therapy item (80010) carries a schedule fee of $175.30 and a benefit of $149.05, and the equivalent focussed psychological strategies item (80110) carries $119.45 and $101.55. Psychologists set their own fees and any charge above the benefit is the patient's gap, so margin per session moves with the workforce mix. Patients cannot use private health ancillary cover to top up a Medicare benefit, though they may claim on their fund once the calendar year services are used, and because the cap resets on 1 January a June year end straddles two calendar year entitlements.

Individual services can be delivered in rooms, by video or by phone under the same annual limits and referral rules, so the practice is not confined to clients who can reach its rooms, and neither are its competitors. The geographic conditions sit on the group therapy video items, which require the patient to be in a Modified Monash Model 4 to 7 area and at least 15 kilometres from the psychologist. See government funding exposure.

NDIS work is priced against the NDIS pricing schedule, which took effect on 1 July 2026 in place of the former pricing arrangements and price limits and which the National Disability Insurance Agency describes as what it considers the appropriate and reasonable maximum prices for all NDIS supports. Those prices come out of an annual pricing review, the NDIA states that participants must agree before an existing service agreement is changed, and a Bill introduced on 14 May 2026 proposes to give the Minister for the NDIS the power to make a pricing determination, so the settings current at the valuation date are checked rather than assumed. Registration is separate: the NDIS Quality and Safeguards Commission audits registered providers against Practice Standards grouped into a core module for higher-risk supports, a verification module for lower-risk supports and supplementary modules that include specialist behaviour support, so audit scope follows the supports the provider is registered for. Behaviour support plans need specialist behaviour support registration and a practitioner the Commission considers suitable to develop functional behaviour assessments and behaviour support plans. Functional behavioural and diagnostic assessments pay well but arrive irregularly, and are normalised across the year. Supports run under a written service agreement with the participant, which is where notice, cancellation and price terms sit. See our NDIS valuations page.

DVA work is billed to the Schedule of Fees for Clinical Psychologists or for Psychologists. A provider who accepts a Veteran Card takes the DVA fee as full payment and cannot charge a gap, and under the treatment cycle arrangements a referral to an allied health provider runs for up to 12 sessions or one year, whichever ends first. Each further cycle needs a fresh GP referral, and DVA expects a treatment cycle report back to the GP on the client file, though there is no annual ceiling on the cycles the GP considers clinically necessary. Workers compensation is regulated scheme by scheme. In Victoria, WorkSafe funds psychology only from providers it has approved, only where a medical practitioner referred the person before the service began, and not at all from a provisionally registered psychologist; it pays to its fee schedule with the worker meeting any difference, will not pay for non-attendance or cancellation, and reviews entitlement periodically. Its paperwork is unbilled: WorkSafe expects a treatment planning form by the sixth session and a treatment review form after 10 sessions or 6 months, whichever is earlier. Employee assistance, school and organisational contracts carry fixed session rates, notice periods and renewal dates, and one can be a large share of revenue. See contract concentration.

Normalising the owner's sessions and contractor splits

Maintainable earnings are the profit the practice can sustain in a normal year. Normalisation adjusts reported profit to reach it: removing one-off items, restating related-party costs at market rates and paying every psychologist, including the owner, a market rate for their sessions. The result is normally stated as EBITDA, being earnings struck before interest, tax, depreciation and amortisation, or as EBIT, which leaves depreciation and amortisation in. See maintainable earnings.

The workforce model is the largest adjustment. Many practices engage psychologists as contractors on a percentage of the fees they generate, and the split is tested against the market, against what a buyer would pay to keep the same people, and for payroll tax. State relevant contract provisions can deem payments to contracted practitioners to be wages. Queensland Revenue Office public ruling PTAQ000.6.5, issued on 3 March 2025, applies them to a business conducting a medical centre, a term it extends to dental clinics, physiotherapy practices, radiology centres and similar healthcare providers that engage practitioners to give patients access to their services, and it states that the exemption for wages a medical practice pays a general practitioner does not reach other kinds of health practitioner. A group psychology practice that engages psychologists through its premises and its books can sit inside that description. The position differs between states and should be confirmed with your accountant. Where the tax has not been paid on splits, we price the exposure as an ongoing cost, a contingent liability, or both. See payroll tax and practice value.

Personal goodwill and practice goodwill

Goodwill is the earning power of reputation, relationships and systems: whatever the practice is worth beyond its identifiable assets net of liabilities. It divides into personal goodwill, which attaches to the therapist, and transferable (commercial) goodwill, which attaches to the practice. Referrals name a psychologist and clients continue with a person, so key-person risk, the risk that earnings fall when one person leaves, dominates.

Practice goodwill exists where new clients arrive because of the practice: central intake and triage, GP relationships held by the entity, contracts in the entity's name, a brand that generates enquiries and administration that keeps sessions flowing whichever psychologist is available. A group with these systems can lose an individual and refill the diary; a sole practitioner cannot. We trace where new clients came from over a two-year period and model earnings without the owner. See practitioner dependence.

Capacity, rooms and telehealth

A psychology practice sells time. We measure room utilisation (sessions delivered against available room hours), sessions per psychologist against contracted days, and the telehealth share, which shifts the binding constraint from rooms to people. A waitlist is evidence of demand, not revenue: it converts to value only if the practice can recruit, and a funded diary cannot be filled with junior staff. A practice that supervises provisional psychologists and registrars therefore builds a recruitment channel a buyer would otherwise have to create, provided the supervision hours are costed rather than absorbed by the owner. See the clinical workforce.

Arriving at a value

The usual primary method is the capitalisation of future maintainable earnings: those earnings multiplied by a factor, the multiple, reflecting their risk and growth prospects. That produces enterprise value, the operating business including the working capital it needs to trade; deducting debt and adding surplus assets gives equity value, the owners' interest. Working capital here turns on payer mix rather than turnover, because private fees are usually collected at the session while Medicare, DVA, scheme, insurer and NDIS plan manager receivables lag, and a buyer inherits that funding gap with the earnings.

The conclusion is market value at the valuation date: the price a willing but not anxious buyer and seller, properly informed and at arm's length, would agree. Value is not price, and a particular buyer may pay more or less on different deal terms. The purpose can also change the basis of value and the treatment of personal goodwill, so the report states the basis applied and why. See how to value a psychology practice.