Starting psychology practice can be a great way to work for yourself while using your qualifications to provide a service to others. Even though a private practice can be an exciting new step in your career, it’s important to go about this in a way that sets you up for success. Being aware of what regulations are going to impact your psychology practice as well as the right legal documents you will need to protect it can make sure you give your business the best start possible.    

Can You Practice Psychology With A Bachelor Degree? 

Obtaining a bachelor’s degree in psychology is a necessary step if you want to practice psychology, however it’s not all you will need. First, it’s critical to make sure the course you are currently studying, have studied or are planning to study is recognised by the Australian Psychology Accreditation Council (APAC). Once you have completed and graduated from your required course, you will need to register with the Psychology Board of Australia. Without the necessary qualifications and registration, you cannot provide psychological services in Australia. 

Note that it is possible to own a psychology practice without being a registered psychologist yourself. In this scenario, you would need to hire qualified and registered psychologists to provide psychological services and ensure that these professionals are registered with the Psychology Board of Australia and meet all the necessary qualifications and ethical standards to practice. You’d also need to ensure that your practice complies with the regulatory requirements and standards set by the Psychology Board of Australia and other relevant bodies.

How Much Does It Cost To Start A Psychology Practice? 

The cost of starting your own psychology practice will depend on a lot of different factors. Ultimately, it will come down to what your goals are and what will be possible for you. We recommend putting all your research and planning in a Business Plan so you can keep track of everything. 

A lot of business owners choose to go the route of raising capital for their venture. That way, they have enough money for their startup costs. Capital Raising can be a pretty complicated process, so it’s important to have a legal expert help you along the way. 

How To Start Your Own Private Psychology Practice

A psychology practice is a business and like every business in Australia, it needs to be formally registered. Before you get your practice registered, there’s a number of factors you need to consider. Below, we’ll look more into business structures and their registration processes. However, it’s important to keep in mind that every business is different and sometimes, it’s better to talk your options through with a legal expert so they can offer you advice that is catered to your unique situation. 

Do I Need An ABN or ACN? 

An Australian Business Number (ABN) and an Australian Company Number (ACN) are vastly different. While only companies need to apply for an ACN, an ABN is going to be required by those who wan’t to operate as a sole trader. 

In order to decide which one is best for your psychology practice, you’ll need to assess the pros and cons of each business structure. We’ve summarised a few key difference between operating as a sole trader and a company below:


  • A legal entity on its own
  • Things like debt, liability and legal proceedings can belong to other company, rather than be taken on personally 
  • More complex and time consuming registration 
  • You will go adhere to the regulations set out by ASIC
  • Companies take a lot more maintenance, with annual checks and fees  

Sole Trader:

  • Relatively quick and easy registration 
  • The business is not its own legal entity 
  • All the liability, debts and legal matters of a sole trader business will not be separate from you
  • A sole trader business has less regulations and rules that need to be followed 
  • It’s maintenance is much more relaxed, compared to a company 

It’s important to take into account that a sole trader and a company are two of the most common types of business structures, however you could always consider something alternative like entering into a Partnership or setting up a Dual Company Structure, if that’s what works for you. 

How Does The Registration Process Work? 

When you’ve come to a conclusion about the kind of structure your business needs to have, then it’s time to move forward with the registration process. 

As we mentioned, obtaining an ABN is a much simpler process. For this, you just need to go online, fill out the relevant details and submit your application. Once it has been approved, you’ll receive your ABN in an email. From there, you’ll be able to start conducting business under it. 

Getting an ACN is a necessary first step in registering your company. However, it’s not something that can be done in a day. To set up a company, you will need to think about things like a Company Constitution, directors, ASIC compliance and much more. It’s best to have a legal expert help Register Your Company, so you know it’s getting done right. 

What Legal Documents Do I Need For My Psychology Practice?

The psychology profession is known for helping people. However, it’s also an industry that comes with a lot of risk. The main risks associated with starting your own psychology practice are often related to confidentiality and liability. Don’t let this deter you from opening up your own psychology practice though! The right legal documents can help you manage these risks and focus on helping your clients.   

Privacy Policy 

Having a website can make it easier for potential clients to find your website and make bookings. However, collecting any kind of information from your clients (or having an annual turnover of more than $3 million) makes your business fall under the Privacy Act and Australian Privacy Principles. In a nutshell, this means you will need to have a Privacy Policy that clearly states what is done with the information your business collects from clients. A privacy policy is required in order to be legally compliant, so we recommend getting it drafted by a legal expert. 

Data Breach Response Plan

When you have any kind of information or data stored about clients, then it is of the utmost importance to take appropriate measures to ensure it stays secured. A comprehensive security plan should not only focus on prevention but also on response. That way, if something does go wrong, your psychology practice will have the correct response. A Data Breach Response Plan is a pre-planned set of steps for what you need to do when information has fallen into the wrong hands. The more efficient your response is to a data breach, the faster you can get everything back to normal. 

Service Agreement

A Service Agreement is one of the most significant agreements you are likely going to need for your psychology practice. Service agreements cover matters such as payment details, confidentiality, termination policies and much more. They help clearly set out expectations, establish consent, limit liability and secure your revenue streams. This way, you can ensure transparency with your clients and have everyone on the same wavelength. 

Employment Agreement

You may choose to onboard staff to assist with daily management of the business or have additional psychologists working with you. Even though expanding the team is great, it is essential to establish a formal agreement before their first day of work. An Employment Agreement addresses critical aspects such as role description, responsibilities, salary, leave, entitlements, confidentiality and termination. Having this agreement in place ensures that everyone is on the same page regarding what is expected of them, helping safeguard your psychology practices values. 

Staff Handbook   

Along with having a well drafted employment agreement in place, a Staff Handbook is also useful in ensuring business operations run smoothly. As a psychology practice, there’s a particular standard of care, privacy and ethics you’ll want to establish for the sake of your clients and your business’s reputation. A staff handbook can clearly and concisely create a uniform set of rules for all staff members so there’s no confusion and everyone knows what is expected of them.   

Next Steps

Starting your own psychology practice can be a great way to practice your profession and become the owner of a business. However, it does require careful planning, getting the right legal documents in place and making sure you’re being compliant with the relevant regulations. Seeking out a legal expert’s help can make this process a lot less stressful! To summarise what we’ve discussed: 

  • To start your own psychology practice, you need a bachelor’s degree recognised by the Australian Psychology Accreditation Council (APAC) and registration with the Psychology Board of Australia
  • The cost of starting a psychology practice varies. A well researched business plan can help get your finances in order 
  • Business registration requires considering different factors, such as business structure and obtaining an ABN or ACN 
  • Sole traders have simpler registration and less regulatory requirements than companies, which involve more maintenance and adherence to ASIC regulations
  • Legal documents needed for a psychology practice include a Privacy Policy for managing client information, a Data Breach Response Plan for security measures, a Service Agreement to set expectations and protect revenue streams, an Employment Agreement for staff, and a Staff Handbook for clear rules and standards

If you would like a consultation on starting your own psychology practice, you can reach us at 1800 730 617 or for a free, no-obligations chat.

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