As an RSW starting a private practice, you need to explore fees, billing procedures, collecting GST/HST on some services and transactions in order to make informed decisions on how to proceed. We recommend that you consult with a professional accountant to identify the critical financial issues to be aware of.
Fee policy
RSWs are encouraged (and may be required by their regulatory organization) to develop, maintain and communicate their fee policy to clients before providing and charging for services.
A number of factors influence the fees you set for your services, such as your target clientele, the services you offer, fees other counselors charge, and the fees identified by extended health care providers as “reasonable” for your jurisdiction. Contact your regulatory organization to obtain any recommended fee amounts available. Hourly consultation fees range between $70 and $130, fees for half-day non-clinical engagements are commonly $300 or more. In addition to setting your fees, you should also consider penalties for late payment or missed appointments. Carefully consider the potential moral hazards of offering reduced fees based on a client’s ability to pay for your services. Please consult the links in the "Helpful Links" section below for more on using a sliding fee scale.
Billing
For paramedical practitioners like RSWs it is common to get paid right after the service has been provided. This will help you avoid late payments or defaulted payments. You need to be able to provide an invoice, a payment receipt and/or a receipt for reimbursement with extended health care providers to clients. Some clients have “co-pay arrangements”, in this case, a client would pay a portion and you invoice the remainder to the designated insurance company. You can download free invoice templates online and buy receipt books at office supply and retail. Receipts for reimbursements should include your name, address, phone number, date, length of service, type of service, name of client and GST/HST number(if applicable) and display “paid in full”.
GST/HST exemptions
RSWs are exempt from having to collect GST or HST on certain services, which the Canadian Revenue Agency defines in detail in the Excise Tax Act. In summary, exempt services include:
- counselling individuals on the prevention or treatment of physical or mental disorders
- assisting afflicted individuals or their caregivers in coping with such conditions
Non-exempt services include:
- primarily educational services, like workshops
- consultation with agencies or other professionals
GST/HST exemptions on certain services also mean that RSWs can not claim input tax credits on costs associated with these services. As you design your service offerings, consult with a professional to clarify GST/HST requirements and options for each type of service.
Transactions
You will need to decide what forms of payment you accept, bearing in mind that there may be banking or transaction feeds associated with each payment method. Here is a brief overview of the common transaction methods:
- Cash (Pro: virtually no transaction fees, Cons: need change, cash on-site)
- Point of sale (POS) terminal (Pro: direct deposit / Cons: higher banking fees)
- Cheque (Pro: some transaction fees, secure / Cons: cheque may bounce)
- Interac e-transfer using an e-mail address or mobile phone number through participating financial institutions’ online banking service(Pros: convenient / Cons: higher transaction fees, client may not pay
- PayPalTM invoicing and payment for credit cards (Pros: convenient / Cons: higher transaction fees)
Depending on the volume of clients you expect, you may want to continue using your personal bank account or open a small business bank account. There are low-volume business bank accounts and even pay-as-you-go business bank accounts. If used for business, your banking fees and interest charges should be tax-deductible but you be sure to shop around for your bank account, as the fees can add up quickly.
Helpful Links:
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Canada |
Canada Revenue Agency: small business and self-employed |
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Prince Edward Island |
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Ontario |
Practice Notes: Private Practice – The Cost of Doing Business |
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International |
Fees in Therapy: Summary and Guidelines |