Physical Therapy Practice Valuation Calculator
Two PT clinics can earn the same money and sell for very different prices. The thing that separates them is how much of the clinic walks out of the door with the owner. Breakwater M&A is unusual in publishing that separately: one ladder by size of earnings, and a second ladder by owner dependency. The calculator gives you the first. The rest of this page is about the second.
No email required. Nothing is stored or sent anywhere. The arithmetic runs in your browser and every step of it is shown next to the result.
What lowers a physical therapy practice valuation?
Owner dependency. Breakwater M&A publishes a table of PT multiples set by owner dependency and operational maturity rather than by size: Small practice (under $1M revenue), high owner dependency, 2.5x to 3.5x; Single location, owner-operated, some staff leverage, 3x to 4.5x; 2 to 4 locations, moderate growth, diversified providers, 4x to 5.5x; 5+ locations, scalable ops, professional management, 5x to 7x; Platform-ready (strong EBITDA, minimal owner dependency), 6x to 8x. The clinical work is the same on every rung. What changes is how much of the revenue needs the owner in the building.
Inputs
Your clinic
The bottom line your P&L already shows, after rent, staff, supplies, billing and your own compensation.
Salary, distributions and any personal expenses running through the clinic. A buyer adds this back, because what you choose to take is not a cost of running the business.
Salary, benefits and payroll tax for whoever would carry your caseload. Use a real figure from your own market: what you last paid, or what a recruiter quoted you. There is deliberately no default, because therapist pay varies too much by region for a guess to help you.
One-off costs that will not repeat under a new owner, and only the ones you can evidence line by line. Leave it empty if you cannot produce the invoices.
How much of this clinic is you
These change nothing in the arithmetic. Breakwater M&A publishes a second ladder set by owner dependency, and it is reproduced further down this page, but no firm publishes a discount you can subtract for any single item on this list.
Estimated range
Enter your profit and what you paid yourself to see a band.
The whole spread, for context
Physical therapy clinics in 2026 are selling for 2.5x to 8x EBITDA.
Breakwater M&A, 2026. Both ends of that spread are real clinics. Which end you sit at is decided mostly by how much of the work is still yours.
Bands and clinic profiles are Breakwater M&A’s, from Physical Therapy Practice Valuation 2026: Multiples by Clinic Size, published 2026. Everything else on this panel is arithmetic on the figures you entered. It is an estimate for planning, not a valuation opinion, and no real transaction should be priced from it. The firms that publish PT multiples, and what each one publishes, are set out on our PT EBITDA multiple research.
The first ladder: size of earnings
This is the table the calculator reads. It sorts clinics by adjusted EBITDA and names the kind of practice found on each rung. Note where it starts: below the bottom of this table there is no published multiple at all, which is why the calculator refuses to quote one rather than stretching the lowest band downwards.
| Practice profile | EBITDA range | Multiple |
|---|---|---|
| Single location, owner-operated | $150K to $500K | 2.5–4x |
| Multi-location, professional manager | $500K to $1M | 4–6x |
| Platform practice, regional footprint | $1M to $3M | 5–7x |
| Roll-up / consolidator target | $3M+ | 6–8x+ |
Source: Breakwater M&A, 2026. Physical Therapy Practice Valuation 2026: Multiples by Clinic Size. The top rung is written with a plus sign in the source, so what a consolidator pays above it is negotiated deal by deal and no upper figure has been supplied here.
The second ladder: how much of it is you
The table above sorts clinics by how much they earn. This one sorts them by whether those earnings need the owner present, and it is the more useful of the two if you are trying to work out what to change. Breakwater M&A publishes both. Most valuation pages only reproduce the first.
| Practice profile | Typical EBITDA multiple |
|---|---|
| Small practice (under $1M revenue), high owner dependency | 2.5x to 3.5x |
| Single location, owner-operated, some staff leverage | 3x to 4.5x |
| 2 to 4 locations, moderate growth, diversified providers | 4x to 5.5x |
| 5+ locations, scalable ops, professional management | 5x to 7x |
| Platform-ready (strong EBITDA, minimal owner dependency) | 6x to 8x |
Source: Breakwater M&A, 2026. Rows reproduced word for word. Beneath this table Breakwater M&A notes that the multiples are “based on Scope Research 2025 analysis and WebPT industry data”, so these figures are second-hand and worth treating as one firm’s reading of two other sources rather than as its own transaction record.
Nothing on this page multiplies anything by this table. It is here to be read, because the two ladders answer different questions and an owner usually needs the second one. Where the size ladder tells you which band your earnings fall in today, this one tells you what would have to change for the band to move: providers other than you producing revenue, someone else running the schedule, more than one location, and management that does not depend on the founder.
That is also the honest limit of the exercise. If your profile sits on a different rung of this table than your earnings put you on in the first one, the two do not get averaged. They get argued about, in a room, with your financials on the table.
The threshold that overrides the table
Alongside that table, Breakwater M&A publishes three statements tied to one number neither ladder carries: the share of revenue the owner personally generates. The wording is theirs.
“If you are the primary treating therapist and generate more than 20 to 25% of your clinic's revenue, buyers will apply substantial discounts to your valuation.”
“If you generate more than 20% of clinic revenue, expect buyers to require a multi-year retention agreement or earnout tied to patient retention and revenue maintenance.”
“If you generate more than 50% of revenue, your practice may be valued closer to 2.5x to 3.5x EBITDA, regardless of other factors.”
Source: Breakwater M&A, 2026. Physical Therapy Practice Valuation 2026: Multiples by Clinic Size.
The last of those is the one to sit with. Regardless of other factors is the only point anywhere in this firm’s tables or their notes where one characteristic is said to override everything else, and it lands on the variable that takes longest to change. A clinic can be growing, well run and profitable, and still be priced at the bottom of the ladder because the owner is producing most of the revenue.
None of it is arithmetic you can apply, and nothing on this page treats it as such. The calculator does not read these thresholds, the questions in it move no band, and no figure here is multiplied by them. What changes above those thresholds is the structure of the deal rather than a number you can subtract: a retention agreement, an earnout, a longer employment contract after closing.
The useful response is to measure the share. What percentage of last year’s revenue came from visits you personally treated? Most owners have never worked it out, and a buyer will do it inside the first week of diligence.
A second firm, with no ladder at all
Peak Business Valuation is a business appraisal firm rather than an M&A advisor, and it publishes a single range for the whole of physical therapy:
“EBITDA multiples for physical therapy practices typically range from 3.0x to 6.0x EBITDA.”
Peak Business Valuation, 2026. Physical Therapy Multiples.
Read that as a cross-check on the whole market, not as a band. Peak Business Valuation publishes no breakdown by size, by location count or by owner dependency, so there is no honest way to attach that range to a clinic of any particular profile. Anyone quoting it at you for a specific clinic has added the specificity themselves.
What it is good for is sanity. If a broker opens well above the top of that range for a single owner-operated location, the burden is on the broker to say which comparable transactions support it.
The five-year average, and who actually said it
The figure most often repeated about PT valuations is an average. Breakwater M&A reports it citing WebPT industry analysis:
“The average EBITDA multiple for physical therapy practices over the past five years has been 3.6x.”
Breakwater M&A, 2026, citing WebPT industry analysis.
That attribution matters more than the number. What we have verified is that Breakwater M&A publishes this sentence and credits it to WebPT industry analysis. We have not seen the underlying analysis, so this page cites the firm we read it in rather than the firm it came from. A figure that has been through one pair of hands should say so.
On the number itself: an average taken across five years and every clinic size tells you almost nothing about your clinic. It sits below the middle of both tables above, which is what you would expect when most PT practices are small and owner-operated. Use it to sense-check a pitch, not to price a business.
Medicare exposure: real risk, unpublished price
Payor mix is one of the five factors Breakwater M&A names as deciding a PT multiple. It does not publish a discount for any level of Medicare exposure, and neither does Peak Business Valuation. So this page applies none, and any calculator that quietly subtracts a fraction of a turn for your Medicare share has made that fraction up.
What can be checked is the rate itself. The American Physical Therapy Association reports that CMS finalised a 3.26% increase to the conversion factor in the 2026 Medicare Part B Physician Fee Schedule, and that physical therapists on average receive a 1.75% increase in reimbursement under that schedule. APTA titles the article as the first pay increase in five years. APTA, November 18, 2025.
Two cautions before that figure gets used as good news. An average across a profession is not a forecast for one clinic: APTA notes that CMS changed relative value units for many codes, so the effect has to be read code by code against the mix you actually bill. And a single year of the Physician Fee Schedule is set annually by rulemaking, which is the reason buyers treat heavy Medicare concentration as risk in the first place. They are not pricing this year. They are pricing the fact that nobody in the room sets next year.
The practical version for an owner: know your payor mix by share of collections before a buyer works it out for you, and be able to say what happens to the clinic if the largest single payor moves against you. That conversation is won with your own numbers, not with a published discount, since there is not one.
How a valuation is put together, and the same exercise for other specialties, sits on the general practice valuation calculator. The firms that publish PT multiples, and what each one publishes, are set out on the PT EBITDA multiple answer page.
Common questions
What lowers a physical therapy practice valuation?
How much of the clinic depends on the owner. Breakwater M&A publishes a second table for exactly this, set by owner dependency and operational maturity rather than by size of earnings: Small practice (under $1M revenue), high owner dependency, 2.5x to 3.5x; Single location, owner-operated, some staff leverage, 3x to 4.5x; 2 to 4 locations, moderate growth, diversified providers, 4x to 5.5x; 5+ locations, scalable ops, professional management, 5x to 7x; Platform-ready (strong EBITDA, minimal owner dependency), 6x to 8x. The same earnings sit on different rungs of that table depending on who has to be in the building for them to happen.
How do you value a physical therapy practice?
Normalise earnings first, then apply the multiple for the rung those earnings put you in. Adjusted EBITDA is profit before owner compensation, less the market cost of replacing the clinical hours the owner personally treats, plus any one-off costs you can evidence. Breakwater M&A publishes four rungs by size of adjusted EBITDA: $150K to $500K at 2.5–4x, Single location, owner-operated; $500K to $1M at 4–6x, Multi-location, professional manager; $1M to $3M at 5–7x, Platform practice, regional footprint; $3M+ at 6–8x+, Roll-up / consolidator target. The calculator on this page shows every step of that arithmetic next to the result.
What multiple do physical therapy clinics sell for?
Breakwater M&A states it as a whole-market spread: "Physical therapy clinics in 2026 are selling for 2.5x to 8x EBITDA." Peak Business Valuation puts it differently: "EBITDA multiples for physical therapy practices typically range from 3.0x to 6.0x EBITDA." Those two are not averaged anywhere on this page. They are separate firms describing separate books of business, and Peak Business Valuation publishes no size breakdown at all, so its range cannot be attached to a clinic of any particular size.
What is the average EBITDA multiple for a physical therapy practice?
Breakwater M&A reports, citing WebPT industry analysis, that "the average EBITDA multiple for physical therapy practices over the past five years has been 3.6x." That figure is second-hand, so it is worth attributing carefully. It is also an average across five years and every clinic size, which makes it a poor guide to any single clinic and a reasonable check on whether a broker's pitch is describing the market or describing the top of it.
Does Medicare exposure change what my clinic is worth?
Breakwater M&A names payor mix as one of the five things that decide a PT multiple, but publishes no discount for any level of Medicare exposure, so this page applies none. What is knowable is the direction of the rate itself. The American Physical Therapy Association reports that CMS finalised a 3.26% increase to the conversion factor in the 2026 Medicare Part B Physician Fee Schedule, with physical therapists on average receiving a 1.75% increase in reimbursement, which APTA describes as the first increase in five years. Read which conversion factor that is before you apply it: APTA notes that CMS has moved the fee schedule to two conversion factors, one for qualifying alternative payment model participants and one for everyone else, and that most physical therapists fall under the second. An average across a profession is not your clinic either, and APTA notes that changes to relative value units mean the effect has to be read code by code.
Is a single-location PT clinic worth selling?
Sometimes the honest answer is that there is no enterprise value to sell. If replacing your clinical hours consumes the profit, what remains is equipment, the lease and the patient list, which is an asset sale rather than an earnings multiple. That is not a failure. It means the clinic is a well-paid job. It does mean an exit needs either more volume per therapist or a second location before there is a business that can change hands without you.
Why does a buyer subtract my salary if I am the owner?
They are not subtracting your salary. They are subtracting your replacement's. A buyer is purchasing the earnings that survive your departure, so whatever you personally took out is added back as discretionary, and then the market cost of the person who covers your caseload is taken off. For an owner treating a full caseload, the second adjustment is usually the larger of the two.
Want to know how much of the clinic is you?
A calculator gives you a range from a published table. It cannot read your payor contracts, tell you what share of revenue depends on your own caseload, or say whether your therapist agreements survive a sale. Those are the things that decide which rung you are on.
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Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.