Short answer: a healthy general dental practice typically runs about 60% overhead, leaving roughly 40% as owner profit. Overhead consistently above ~65% is worth investigating. Here’s how that breaks down by category — and why it drives both your take-home pay and your practice’s value.
What is a good overhead percentage for a dental practice?
For a general practice, an overhead around 60% of collections is a common healthy benchmark, leaving about 40% as owner earnings before the owner’s own compensation. Specialty practices and group models differ. Overhead persistently above ~65% doesn’t mean something is wrong, but it’s a signal worth investigating.
Overhead benchmarks by category
| Category | Typical range |
|---|---|
| Staff (excl. owner) | 25–28% |
| Dental supplies | 6–8% |
| Lab fees | 8–10% |
| Facility / rent | 5–8% |
| Equipment & office | 4–6% |
| Marketing | 2–5% |
| Admin & other | 3–6% |
Why does overhead matter so much?
Overhead is the single biggest lever on both your take-home pay and your practice’s value. Two practices with identical collections can be worth very different amounts if one runs at 55% overhead and the other at 70% — because value follows earnings, not revenue. See how to value a dental practice.
How do you lower overhead without cutting quality?
- Tighten scheduling and provider productivity before cutting anything.
- Review supply and lab spend against benchmarks; renegotiate where you’re high.
- Strengthen hygiene — a productive hygiene department improves the ratio.
- Watch staff cost as a share of collections, not just as a dollar figure.
Frequently asked questions
It’s above the typical healthy benchmark of ~60%, so it’s worth investigating — but context matters. A newer, growing, or specialty practice may run higher temporarily. Look at trends and categories, not just the headline number.
Staff compensation, typically 25–28% of collections, is usually the largest single category.
Sources
Founder & Financial Planner · Investment Adviser Representative · Series 63 & 65
Ian McGinnis is a financial planner and founder of Dental Wealth Partners, a non-commission, fee-only financial planning firm for dentists. He is the author of The Wealthy Dentist: Smarter Money. Less Stress. More Life. and hosts the Smiles & Cents podcast.
Keep reading
- How to value a dental practiceThe main methods used to value a dental practice, what drives value, and how buyers and sellers should think about the number.
- Practice owner vs. associate: the financial case for ownershipA strictly financial comparison of practice ownership vs. working as an associate — using ADA income data and illustrative production by career stage.
- How to buy a dental practice: a financial due-diligence guideThe financial due diligence every dentist should do before buying a practice — testing the price, modeling cash flow, and preparing for lenders.