What is the average occupational therapy salary for new grads? It’s not as easy to answer as you might think.
If you look online, OT salaries vary by state, city, job type, availability, and experience. Some OT’s make less than $40k per year, while others make over $100k per year.
According to the bureau of labor statistics, on average OTs make about $ 93,180 per year.
According to AOTA, new grads are estimated to make $59,000 per year on average, but it really depends on the type of job, position, and state you live in.
Otpotential.com has a list of multiple salary sources and says the average OT salary is around $79,000.
In this article, I’ll explain how to maximize your income as an OT by working in the right location, setting, and position, so you can pay off your student loans and get out of debt.
Hopefully, this will clear things up a bit.
OT Salary by state
If you are an OT, a new grad, or looking to become an OT, Las Vegas is the place to make money, and I’m not talking about the slot machines. Look up occupational therapy salaries, and the highest salary state is Nevada. It’s also a tax-free State.
People say the pay is high in Las Vegas, because no one wants to live there. That’s a myth. Las Vegas is a great place to live and work. There’s plenty of outdoor recreation, entertainment, and it’s a great place to live if you love to travel.
It’s not just OT’s, but all healthcare workers make more money in Las Vegas. I actually wrote an entire article about it here.
California also pays well, but it’s still less than Las Vegas. To learn more about OT salary in California, read my other post here.
Top 3 highest paying States for OT
Here are the top 3 highest paying states for OT.
#1 Las Vegas, Nevada
$110,000
#2. Arizona
$99,000
#3 California
$101,000
Other states that pay well for OT
- Washington, DC
- Oregon
- Texas
- New Jersey
- Connecticut
- Arizona
The worst paying states for OT
- Idaho
- Montana
- North Dakota
- Montana
- Utah
- Florida
- Louisiana
- Most of the East Coast
Top paying states for OT in 2023
According to BLS.gov, these are the top paying states for occupational therapy in 2023, but in my opinion it’s a little skewed.
| State | Employment | Hourly mean wage | Annual mean wage (2) |
|---|---|---|---|
| California | 13,230 | $ 52.51 | $ 109,220 |
| Nevada | 780 | $ 50.49 | $ 105,020 |
| New Jersey | 4,280 | $ 50.34 | $ 104,710 |
| Alaska | 290 | $ 48.46 | $ 100,810 |
| Virginia | 3,250 | $ 47.11 | $ 97,980 |
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The top 5 highest paying OT settings
The top paying for jobs for OT tend to be the businesses that have the most money like hospitals.
#5 Travel OT
Everyone in OT school told me that the highest paid OT salary was in travel jobs or home health. That’s not true. Travel jobs can pay well, but they usually will never pay more than $45-50 per hour.
This can be to your benefit if you claim a residence, and travel out of that residence as a travel therapist to receive the tax stipend. But if you leave your home for a travel assignment and pay rent on top of your mortgage, you really don’t win.
Some people are dishonest about their taxes and use a family or friend’s address as their tax home to collect the stipend. If you take this risk, you could get audited with a heavy fine.
In some circumstances, travel OT may pay higher. For example, if you live in a low paying state, a travel job might pay better than other jobs in your area.
Just keep in mind that most travel jobs are 3 months in length, but if you love to travel it might be worth it. If you want to maximize your salary as a new grad, consider travel OT right out of school.
#4 Home health OT
Starting out, everyone told me that home health therapists make the most money, but it really depends where you live and how much time it takes for your commute. You also have to consider if you are working as a W2 employee or independent contractor because W2 employees usually have their employer pay for their travel commute and other expenses.
In my opinion, it’s better to be a W2 employee as a home health therapist. The highest paying home job is about $120 per visit, but this is not typical. If you live in Idaho you will probably get around $65 per visit while Las Vegas or California will pay around $80 per visit.
Home health rates range from place to place, but typically you will end up with less benefits and less money if you’re doing it full time. If you commit to a full time home health job you’re going to be driving all over the place and spending extra time at home documenting, setting up appointments and may have to spend time communicating with coworkers.
As a home health OT, you’ll also have worse health insurance and retirement benefits, because most home health companies are small and can’t afford good benefits.
How to make money in home health?
There are ways to make extra money in home health. For example, if you tell 5 home health companies you will only work in zip codes near your home, you will have less time spent traveling.
Using this zip code method will decrease your commute time significantly and make you more efficient.
It can also be beneficial to work part time as a home health therapist and see patients in zip codes on your way to or from work.
#3 Hand Therapy
A lot of people think that hand therapy doesn’t pay well, and usually it doesn’t. The average pay is around $75,000-80,000 per year, and it doesn’t go up unless you have a lot of experience.
To make money as a hand therapist, you will do best to work for a successful hand surgeon. If they’re making a lot of money, and have multiple revenue sources, you can usually negotiate a higher rate.
Check out my other post on negotiating OT salary here.
If a business is desperate they will pay you a higher rate. I got my first job in hand therapy with only 3 months of fieldwork experience as a student.
The company was desperate for a therapist and I asked for $50 per hour. To my surprise, they said yes without negotiation, and I landed my first hand therapy job just like that.
It’s all in negotiation. Click here to learn more about hand therapy salary.
#2 Acute rehab/SNF
Acute rehab and skilled nursing facilities also pay a bit higher depending on location. The average SNF in Las Vegas paid $50 per hour for per diem and $40-45 for full time. The benefits are much worse than hospitals and health care coverage usually is not great either.
Skilled nursing in Las Vegas is also not a fun place to work, and I would not recommend it to new grads. In 2020 Medicare made changes that negatively impacted skilled nursing facilities. Many facilities are now receiving less reimbursement, and as a result, have cut employees.
Acute rehab is a much better work setting and better for new grads. In Las Vegas acute rehab offered per diem employees $55-60 per hour on average.
#1 Hospitals
I started working full time as an occupational therapist in Las Vegas, Nevada in 2013. It was my first job and was offered $35/hour for a full time position with benefits at an acute care hospital.
I negotiated $38/hour and started working for 6 months before I asked to change my position to per diem. The per diem rate at my hospital was $55 per hour at the time for PT, OT, and speech therapy in 2014. I worked 5 days per week and was able to pay off $90,000 in student loans after two years.
When I left Las Vegas I was working at two hospitals PRN. One was paying $65 per hour and the other $70 per hour.
Hospitals are my number one choice for pay, because they have the biggest pockets and can offer the best benefits. One of the hospitals I worked at offered per diem employees $64 per hour, 401k, and a pension. What medical professions even offer pensions today?
In my experience hospitals are the highest payers, but this may vary by state. I know there are some locations where hospitals can pay quite low, so it’s best to ask around to get a better idea.
I would use social media to search for OT’s working in a location you prefer or contact a hospital HR or the director of rehab to ask the average OT salary starting out.
You might be surprised what you can find out by doing a little research.
How OTs make more money by working per diem
The easiest way to make more money as an OT is to work Per Diem. Per diem usually means you get paid more money with little to no benefits.
Most per diem employees won’t have health insurance, 401k contributions, paid time off, dental, vision, etc.
Some complain about working per diem, because it doesn’t cover all the benefits of working full time. I’ve found that if your hourly rate is 25-30% higher than full time, it’s more than enough to pay for your own benefits.
One other benefit of working per diem is the pay to experience ratio. New grads have no experience, so their pay is much lower than someone who has been working longer. You can work for the next 15 years to make an extra $15-20 per hour, or you can work per diem as a new grad and make the same amount of money.
If you really need those benefits you can also work part-time with benefits at one facility and per diem at another.
Disadvantages to working as a Per Diem OT
The disadvantages of per diem are no benefits, first to be called off, and some facilities may rarely need you. It’s best to first start off full or part time, so you can get an idea how per diem works in your area.
If your facility always uses their per diem employees, you can probably transition to per diem after working full/part time for 6 months or more. If your setting does not utilize per diem, try interviewing for these positions at other facilities. If you’re hired, you can then transition to part time at one facility and per diem at another.
Summary
The quickest way to maximize your income and pay off student loans is by working per diem in a higher paying state, setting and position. It’s also important to factor in the cost of living and taxes.
Las Vegas may not seem like the most exciting place to live, but if you’re a new grad and want to maximize your income, it’s the best place to be.
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David is the lead editor of OT Focus. He has been practicing as an Occupational Therapist since 2013. He specializes in acute care, hand therapy, and ergonomics.