What overhead percentage is normal for a dental practice?
Most general dental practices run overhead between 59% and 65% of collections. This means for every dollar collected, roughly 60 cents covers operating costs and 40 cents goes toward dentist compensation and profit.
Staff wages typically represent the largest expense at 25% to 30% of collections. This includes hygienists, dental assistants, front office staff, and office managers. Facility costs like rent, utilities, and maintenance usually run 5% to 8%. Dental supplies and materials add another 5% to 7%, while lab fees for crowns, dentures, and other restorations contribute 8% to 10% depending on how much restorative work the practice performs.
Overhead excludes dentist and associate compensation. That’s an important distinction because some practice owners accidentally include their own pay when calculating overhead, which skews the number high. Overhead measures what it costs to keep the doors open and the chairs filled, separate from what the dentists take home.
New practices typically run higher overhead because fixed costs get spread across fewer patients. A practice collecting $500,000 annually with $30,000 in monthly rent carries a 7.2% facility burden. That same rent on $1.2 million in collections drops to 3%. As production increases and fixed costs stay relatively flat, overhead naturally decreases as a percentage.
Specialty practices often see different benchmarks. Oral surgery and periodontal offices may run lower overhead because they don’t carry the same supply and staffing costs as general practices with hygiene departments. Pediatric practices sometimes run higher due to staffing needs and the time required per appointment.
Healthcare practices benefit from tracking overhead monthly rather than looking at it once a year. Catching a supply cost spike or staffing creep early gives you time to adjust before it eats into profitability for an entire quarter.
If your overhead consistently runs above 65%, look first at staffing efficiency and fee schedules. Sometimes the issue isn’t that costs are too high but that collections are too low relative to production. A small business bookkeeping service familiar with dental financials can help identify where the numbers are out of line and what’s driving the gap.
Track overhead as a percentage of collections rather than production. Collections reflect actual cash coming in. Production only matters if you can collect on it.
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