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 the founder of Dental Wealth Partners and a fee-only financial planner dedicated to dentists. As an investment adviser representative (Series 63 and 65), he built the firm to give dentists coordinated, fiduciary advice across their practice, taxes, investments, retirement plans, and long-term goals — the whole picture in one strategy. A graduate of Belhaven University, Ian previously worked at Davis Private Wealth, MML Investors Services, and Northwestern Mutual, and is based in the Jackson, Mississippi area. He is the author of The Wealthy Dentist 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.