Guide & research
The $1M Dental Practice: Line-Item Benchmarks
What should a healthy $1,000,000 dental practice actually spend on each line item — and how much should reach the owner? This is the benchmark breakdown coaches and consultants use, in both percentages and real dollars, so you can compare your P&L category by category.
Updated August 2026
Why benchmark line by line?
A single “overhead is 60%” number hides where the money actually goes. Breaking the P&L into line items shows exactly which categories are lean and which are bloated — and overhead is the mirror image of your profit and, ultimately, your practice’s value. The targets below are for a general practice; specialty mixes vary.
The benchmark table (on $1,000,000 of collections)
| Line item | Target % of collections | On $1M |
|---|---|---|
| Staff wages (non-doctor) | ~24–26% | $240k–$260k |
| Payroll taxes & benefits | ~2–4% | $20k–$40k |
| Dental / clinical supplies | ~5–7% | $50k–$70k |
| Lab fees | ~6–9% | $60k–$90k |
| Facility / rent | ~5–7% | $50k–$70k |
| Marketing & advertising | ~3–5% | $30k–$50k |
| Office, admin & software | ~3–5% | $30k–$50k |
| Merchant / payment fees | ~1–2% | $10k–$20k |
| Equipment, tech & depreciation | ~2–3% | $20k–$30k |
| Business insurance | ~1–2% | $10k–$20k |
| Continuing ed, dues & misc. | ~2–3% | $20k–$30k |
| Total overhead (excl. owner) | ~55–62% | $550k–$620k |
| Owner earnings (SDE) | ~38–45% | $380k–$450k |
The big three: staff, lab, supplies
Staff is almost always the largest single category and the one that most often creeps. Aim for total team cost (wages + taxes + benefits) around 28% of collections; well above that usually means overstaffing, over-scale pay, or under-production per team member. Lab and clinical supplies together should land roughly 12–16% combined — track them monthly, renegotiate with vendors, and watch waste.
The quieter line items
- Facility / rent: keep at or below ~7% — a great location can still be a bad deal if rent is too high relative to production.
- Marketing: 3–5% is healthy for a growing practice; near zero can quietly starve new-patient flow.
- Office, software & merchant fees: individually small, collectively meaningful — audit subscriptions and card-processing rates yearly.
- Equipment & CE: under-investing here shows up later as a dated, less transferable practice.
From line items to profit — and value
Every point of overhead you remove flows straight to owner earnings, and earnings drive both your take-home and your sale price. On a $1M practice, trimming overhead from 65% to 60% adds roughly $50,000/yr in profit — and, at typical multiples, six figures of practice value. See overhead benchmarks and estimate your own number with the valuation calculator.
How to use this
- Pull your trailing-12-month P&L and convert each category to a % of collections.
- Compare against the targets above and flag anything materially high.
- Pick the one or two biggest gaps — usually staff, lab, or supplies — and work those first.
- Re-measure quarterly; small, sustained improvements compound into real profit and value.
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