If You Charged $100 per hr in 2020 and Haven’t Raised Your Rates Since, You’re Actually Only Earning $83 Now

by Anna Mitchell

Yep, you read that right.

If you’re a self-employed therapist who charged $100 an hour in 2020 and you haven’t raised your prices since, you’re now effectively earning only $83 an hour for the same amount of effort.

If you treat for 25 hours a week, 48 weeks a year, then your income has effectively dropped from $120,000 to just under $100,000.

That’s a $20,000 pay cut that you didn’t agree to.

Dude. Your boss sucks.

How did your pay get cut by 17% when you weren’t even looking?

Inflation. The average annual inflation rate between March 2020 and March 2025 was 3.7%. On that hundred bucks you were charging back in 2020, that’s nearly four bucks an hour for each year. That means in 2025 you should be charging $120 an hour just to cover inflation.

If you don’t really know what inflation means, it’s the silent bloating of prices each year. Like that waistline that silently expands if you’re not paying attention to your clothes getting tighter, prices go up and you get progressively less for your dollar as the years go by.

What does that mean for your business?

If you don’t raise your prices, it means your costs go up but your revenue stays the same. Which means your business profit (i.e. the money your business pays you as its owner after operating costs are covered) goes down … and down … and down.

So, if you haven’t raised your rates in a few years, your profit margin – how much of each dollar you earned and actually kept – has quietly been chewed to bits, even if you’ve been working just as hard or harder.

But wait … it gets worse

The official inflation rate is the average inflation rate for the economy, based on a ‘basket’ of certain items economists think are representative of the cost of living. It’s measured by the CPI, otherwise known as the Consumer Price Index. The inflation rate for your business may well be higher than the official rate. Things like rent, electricity, and insurance etc often outpace CPI.

Also, your business’ costs might have risen beyond the level of inflation, not just because of cost-of-living pressures but also due to the buying decisions you’ve made for your business. If you’ve spent more on training, tech or equipment, that’s shrinking your profit margin too.

Do your accounting

This is why it’s important to do your accounting, so you know what your business’ profit margin is and can adjust your prices accordingly.

If ‘doing your accounting’ doesn’t extend beyond sending hastily-compiled-at-tax-time figures to your accountant for them to lodge your tax return, and returning to the part of your business you’d rather be doing, you’re going to miss this whittling away of your profit margins. You’ll end up wondering why you have so little money when you work so damn hard all year long.

If you’re basing your rates on what clients “can afford” or what “feels fair” without doing the maths on your actual costs and inflation, you’re running your business on vibes.

Vibes, like ‘exposure’, don’t pay the bills. Try paying the tax man, or your super fund, in vibes and see how fast your reality cheque bounces.

So, what can you do?

1.     Check your pricing

Make sure it’s at least keeping up with inflation. Run your 2020 rate through the RBA inflation calculator here. If it’s more than one quarter into the financial year, use the quarterly calculator to get the most up-to-date rate.

2.   Look at your costs

Are you charging enough to cover them now, not five years ago?

Former AMT Director and fellow massage therapist Dave Moore put together a great blog post and calculator a few years ago to help you figure out what your hourly rate should be based on your labour and other business costs. You can find it here.

If you have no idea how much time you spend on the items Dave’s listed under ‘Daily Clinical Hours’, I recommend you get yourself the free Toggl Track app, and start tracking. I use it to track every minute of my day, and have been astonished by what I’ve learned from its reports about how I spend my time. It’s not only helped me to work out profit margins, but it has also helped me become more aware of time-wasting activities (I’m lookin’ at you, YouTube!) and use my time better.

If you have no idea what your income, business costs and profit margins are, I can help. I’ll show you how to do your accounting the smart way in my online courses and programs designed specifically for sole traders who suck at the accounting stuff so that you can find out! Because a real business owner knows their numbers. And I don’t mean how many towels you can fold in sixty seconds or how fast you can reset your treatment table after each client.

3. Make a plan

If raising your rate freaks you out, raise it gradually or add value in other ways but start doing the maths and making intentional choices.

A few ways to raise your rates without out or losing clients

• Start with new clients only
  Keep your current rate for existing clients (for now) and introduce your updated rate for new bookings. Easier than raising the rate for everyone all at once.
• Use a stepped increase
  Raise your rate by $5–$10 every 3–6 months until you’re where you need to be. This way, no single jump feels massive, to you or your clients.
• Offer a “last chance” booking window
  Let people know your rate is going up soon, and give them a chance to book in advance at the old price. It fills your calendar and signals value.
• Create new service options
  Introduce a premium option (e.g. longer session, added hot towels, a guided relaxation at the end) at the new rate and watch what people choose.
• Bundle it
  Instead of charging clients per session only, you offer a package of sessions they can prepay for, usually at a slightly lower per-session rate.

Example:

Your new rate is $125 per session.
You offer a bundle of 5 sessions for $600.

That’s $120 per session — still more than your old $100, but it feels like a deal to the client.

• Use better language
  “My new rate will be…” is stronger than “I’m sorry to have to tell you this…” It’s your business. Own it.
• Practice saying it
  Literally rehearse in the mirror: “From July 1st, my new rate will be $125 per session.” Say it until it doesn’t make your throat tighten.

Final thoughts

Your hands do great things in the world daily. And you deserve to be paid a fair, current-day rate for your work.

If you don’t adjust your pricing to reflect inflation and your business’ costs, you’re donating part of your time. Last time I checked, massage therapists aren’t charities (even if you feel like you’re running a free mental health service some days). And you don’t get tax deductions for unpaid labour.

So please …
Know your worth.
Know your numbers.
Price your services like the pro you are.

About the author

Anna Mitchell is a degree-qualified accountant who was also a massage therapist for a few years. She worked for corporate wellness agencies on an ABN and avoided her accounting like massage clients avoid doing the stretches you recommend.

All that sticking her head in the sand got her was nine years behind on her tax returns. Nine Years. If an accountant can mess up her accounting that bad, maybe you’re not such a loser after all.

After untangling that mess in 2019, she built herself a system to make sure it never happened again. That turned into That Accounting Stuff, online courses for sole traders who would rather eat a book than do their books.

Now she helps people like you go from Accounting Zero to Accounting Hero so you can ditch the tax-time panic, stop those nasty cashflow-destroying surprises, and finally feel like a ‘proper’ business owner who knows their key numbers (and is way more likely to succeed).