Dental Overhead vs Benchmarks

Overhead decides how much of every dollar a dental practice collects ends up with the owner. A practice with 58% overhead keeps $420,000 more per $1 million collected than one at 66% — every year. This calculator breaks your costs into the categories practice consultants use and compares each one with commonly cited ranges, so you can see where to focus.

What this calculator does

Enter your annual collections and your yearly costs in six categories: staff, dental supplies, lab fees, facility, marketing, and admin and other. Leave out your own pay as owner, loan payments and depreciation. The calculator shows:

• total overhead as a percentage of collections,
• total overhead in dollars,
• what's left for the owner before your pay and debt,
• which lines are above their typical range, and
• each category as a percentage of collections, with its typical range.

The chart compares each category with the top of its range.

The formula in plain English

Category percentage = category cost ÷ annual collections.

Total overhead = the sum of all six categories.

Owner's share = collections − total overhead. This is what pays the owner dentist and the practice loan.

A category is flagged when its percentage is above the high end of its typical range:

• staff: 24%–28%
• supplies: 5%–6%
• lab: 8%–10%
• facility: 5%–7%
• marketing: 2%–4%
• admin and other: 6%–10%

A worked example

Dr. Brooks collects $1.1 million a year. His costs are:

• staff: $300,000

• supplies: $62,000

• lab: $95,000

• facility: $66,000

• marketing: $30,000

• admin: $95,000

• Total overhead: $648,000, or about 58.9%.

• Staff: about 27.3%, near the top of its range.

• Supplies 5.6%, lab 8.6%, facility 6%, marketing 2.7%, admin 8.6% are all within range.

• Left for the owner: $452,000.

Nothing is flagged, but staff is the line to watch. If he hires one more full-time assistant at $55,000 without more production, staff rises to 32% and total overhead to about 64%. A new hire works when it adds production, such as running a second chair or expanding hygiene.

Why it matters at each career stage

If you're: Practice owner

Run this every quarter from your profit and loss statement. Look at the trend for each line, not just one year. Staff and lab costs tend to creep up quietly; supplies can jump when you change vendors or add procedures.

If you're: Employed

Thinking of buying a practice? Run the seller's numbers through this before you make an offer. A very low overhead can mean underpaid staff or deferred maintenance that you'll inherit.

Benchmarks are a starting point

Every practice is different. A practice in a high-rent city will run a higher facility percentage. A practice that does a lot of implants and crowns will spend more on lab. A practice with mostly fee-for-service patients may spend more on marketing but collect much more per visit. Use the ranges to ask questions, not to judge your practice. The most useful comparison is your own practice over time: if a line has risen two or three points over a few years without a clear reason, that's where to start.

Where to look by category

Staff. Compare staff hours with patient hours. Cross-train team members so you don't need extra people for peak times.

Supplies. Compare at least two vendors a year, join a buying group, and track waste.

Lab. Review lab bills against case types. Digital impressions can lower remakes.

Facility. Rent is hard to change mid-lease, but plan ahead for renewals.

Marketing. Track new patients by source so spending goes where it works.

Admin. Review software subscriptions, merchant fees and insurance every year.

Next, check whether hygiene pays for itself with the hygiene profitability calculator, look at billing with the collections and A/R calculator, or compare with other specialties using the general overhead ratio calculator.