A good dental practice overhead percentage for an established general dental practice is often around 60% of collections, with approximately 60%–65% serving as a practical comparison range. However, the right target depends on your practice's specialty, location, staffing costs, clinical services, and accounting methods.

If your overhead is below 60%, that may indicate efficient operations, but it is not automatically proof of strong financial performance. If it exceeds 65%, you may have opportunities to investigate, particularly when expenses are increasing faster than collections.

The key is understanding what goes into your overhead calculation and comparing it against relevant benchmarks rather than relying on a universal number.

This guide explains dental overhead benchmarks, category-level spending targets, calculation methods, and practical ways to improve profitability without reducing the quality of patient care.

What Is a Good Dental Practice Overhead Percentage?

Dental overhead is commonly evaluated as a percentage of collected revenue, excluding owner-dentist compensation under many practice-management benchmarking methods.

In an April 2021 Dental Economics article, dental CPA Allen M. Schiff identified 60% of collections as a reasonable overhead target for a general dental practice.

More recent practice-level data provides additional context. Percentology's 2026 report, based on financial records from more than 100 general dental practices for calendar year 2025, reported average overhead of 62.2% of collections, excluding owner and associate dentist compensation.

These sources support using approximately 60%–65% as a practical starting point, while recognizing that the number is not a universal standard.

Dental Practice Overhead Percentage Benchmarks

Interpretation guide, not a published national percentile distribution. These bands are informed by Schiff's 2021 professional guidance and Percentology's 2025 practice data, published in 2026. They should not be treated as national averages, guaranteed targets, or cutoffs that apply to every specialty.

Is 60% Dental Practice Overhead Good?

For many established general dental practices, 60% can be a reasonable planning target when the underlying expenses are classified consistently.

However, the result must be interpreted within the practice's operating circumstances.

A practice investing in additional treatment rooms, staffing, or technology may temporarily report higher overhead during a growth period.

Another practice may report a lower percentage because equipment replacement or essential staffing expenses have been deferred.

A good overhead percentage supports sustainable profitability without compromising clinical care, employee retention, or long-term business needs.

How Is Dental Practice Overhead Calculated?

Dental practice overhead measures the relationship between operating expenses and the revenue collected during a specific period.

The standard formula is:

Dental Practice Overhead Percentage = (Operating Expenses ÷ Total Collections) × 100

To calculate your percentage accurately, use consistent expense definitions and the same reporting period for both figures.

What Expenses Count as Dental Overhead?

Common operating expenses include:

• Staff salaries, payroll taxes, and benefits

• Office rent, utilities, and facility maintenance

• Dental supplies and consumables

• Laboratory expenses

• Equipment maintenance, leases, and applicable depreciation

• Marketing and patient acquisition

• Software subscriptions and technology services

• Business insurance and administrative expenses

Under many owner-operated practice benchmarking methods, dentist compensation is treated separately from non-dentist operating overhead.

Other items, such as loan principal repayments, owner distributions, and income taxes, require different accounting treatment.

Interest, depreciation, associate compensation, and certain professional expenses may be classified differently depending on the financial statement and benchmark methodology.

Always confirm which items are included before comparing practices.

Example: Dental Practice Overhead Calculation

Consider a hypothetical general dental practice with annual collections of $1,200,000.

The calculation is:

($720,000 ÷ $1,200,000) × 100 = 60%

This practice spends $0.60 on the included operating expenses for each $1 collected.

The remaining $480,000 is not necessarily the owner's take-home income. Depending on the accounting method, it may still need to cover dentist compensation, financing costs, taxes, and other excluded items.

This example is illustrative, not a real practice case study or an industry average.

Should You Calculate Overhead From Production or Collections?

Collections are generally more useful than gross production when measuring operating expenses against money actually received.

Production reflects services performed, while collections represent payments received.

A practice can report strong production but experience a higher overhead ratio if collections decline or payment delays increase.

For financial benchmarking, avoid mixing gross production with collected revenue unless the source explicitly uses that calculation.

Dental Practice Overhead Benchmarks by Category

A total overhead percentage provides a useful starting point, but category-level analysis shows where expenses may need attention.

The following benchmarks are drawn from Allen M. Schiff's April 2021 Dental Economics guidance and Percentology's 2026 analysis of 2025 bookkeeping records.

They represent different forms of evidence: professional budgeting recommendations and observed practice-level averages.

Dental Practice Expense Benchmark Table

These are professional planning recommendations, not measured national averages. Categories overlap: rent is part of facility and equipment costs, and marketing is part of other business expenses. Do not add all rows together.

1. Staffing: One of the Largest Operating Expenses

Payroll includes more than employee salaries.

Practices must account for payroll taxes, benefits, retirement contributions, temporary staffing, and other employee-related expenses.

Schiff's 2021 guidance suggested a staffing target of 24%–26% of collections, with 28% as an upper planning threshold for the employee category under his methodology.

In contrast, Percentology's 2025 dataset, published in 2026, reported average personnel expenses of 30.0% of collections.

The difference illustrates why practice owners should distinguish targets from observed results.

If payroll exceeds a reference range, investigate scheduling efficiency, collections, staffing responsibilities, overtime, and appointment utilization before considering staff reductions.

A high payroll percentage can result from reduced collections rather than excessive staffing.

2. Dental Supplies: Monitor Recurring Purchasing Costs

Supplies include materials and consumables required for daily clinical procedures.

Schiff's 2021 planning recommendation allocated approximately 6% of collections to dental supplies.

Actual spending varies according to treatment mix, clinical product preferences, purchasing agreements, and whether equipment-related expenses have been classified correctly.

Common supply categories include:

• Gloves and infection-control materials

• Bonding agents and composites

• Restorative supplies

• Dental burs and instruments

• Impression materials

• Sterilization supplies

To identify potential savings, compare frequently purchased products using actual invoice prices, quantities, and supplier terms.

A group purchasing organization may provide access to negotiated pricing for eligible products, but the financial benefit depends on existing prices and membership costs.

3. Laboratory Fees: Consider Your Clinical Services

Laboratory expenses can vary substantially among dental practices.

Schiff's 2021 guidance used approximately 8% of collections as a general planning reference for lab expenses.

A practice providing more prosthetic, implant, or complex restorative treatment may have a different cost structure from a preventive-focused office.

Laboratory comparisons should include:

• Case type and materials

• Turnaround times

• Remake policies

• Shipping charges

• Technical support

• Consistency and quality

Lower laboratory fees should not be pursued at the expense of treatment quality or reliability.

4. Rent and Facility Costs: Understand Fixed Expenses

Facility expenses generally include rent, utilities, maintenance, and related occupancy costs.

Schiff's 2021 recommendations included approximately 10% of collections for combined facility and equipment expenses, with rent accounting for roughly 5%–6%.

A practice in an expensive metropolitan market may have higher occupancy costs than one in a lower-cost location.

Practice owners should evaluate facility expenses alongside available treatment rooms, patient volume, lease obligations, and future growth requirements.

5. Marketing: Evaluate Financial Returns

Marketing expenses may include website management, search engine optimization, advertising, patient communications, and local campaigns.

Schiff's 2021 planning reference allocated approximately 1%–2% of collections to advertising and marketing.

However, the appropriate budget depends on practice growth objectives, market competition, and the performance of marketing channels.

A growing practice may deliberately invest more to establish patient demand.

Evaluate marketing using qualified inquiries, appointments booked, completed visits, and the actual cost of acquiring patients.

6. Software and Administrative Expenses

Software, payment processing, insurance, office administration, professional services, and other recurring expenses often fall within broader business expense categories.

Schiff's 2021 guidance used approximately 11% of collections for other business expenses, a category that included marketing and several administrative functions.

Avoid adding a separate software percentage to this overall allowance unless your accounting categories have been defined to prevent duplication.

Practices should review recurring subscriptions, unused systems, overlapping tools, and vendor renewals periodically.

What Recent Dental Industry Data Says About Rising Overhead

Overhead management has remained a concern for dental practice owners.

The 2024 Dental Economics/Levin Group Annual Practice Survey reported that 64% of responding practices experienced higher overhead in 2023. The survey also reported an average overhead increase of 4.8% for that year.

These results measure changes in overhead, not the average dental practice overhead percentage.

That distinction matters.

A practice's overhead percentage may increase because expenses rise, collections decrease, or both occur simultaneously.

Why Rising Expenses Matter

Consider a hypothetical practice collecting $1 million annually with operating expenses of $600,000.

Its overhead percentage is 60%.

If expenses rise to $650,000 while collections remain unchanged, overhead increases to 65%.

That five-percentage-point change reduces operating income before excluded costs by $50,000.

The calculation demonstrates why even relatively small percentage changes deserve attention.

Tracking Overhead Correctly

In the April 1, 2021 Dental Economics article tracking dental practice overhead and what the results mean, Allen M. Schiff, CPA, CFE, recommends reviewing financial reports by meaningful expense categories.

His approach emphasizes consistent financial classification and regular conversations with a dental-focused accountant.

This is particularly important when expenses from suppliers include both ordinary consumables and larger equipment purchases.

Recording them in the wrong category can distort the overhead ratios used for decision-making.

Why Dental Practice Overhead Percentages Vary

A benchmark is useful only when the compared practices are reasonably similar.

Practice Size

A solo practice may have fewer employees but limited purchasing leverage and less capacity to spread fixed expenses.

A multi-provider practice may benefit from shared facilities and administration, while also carrying higher total payroll and equipment costs.

Neither structure guarantees lower overhead.

Dental Specialty

Different clinical specialties have different cost structures.

An implant-focused practice may use more costly materials and laboratory services.

A preventive-focused practice may have a different relationship between hygiene staffing and revenue.

Compare overhead with practices offering similar services whenever possible.

Geographic Location

Rent, employee compensation, insurance, utilities, and other operating expenses vary by market.

A reference range developed from practices in one region may be less relevant elsewhere.

Practice Age and Growth Stage

New practices often operate below their intended capacity while carrying rent, equipment, and staffing expenses.

Expanding practices may experience a similar temporary increase during recruitment, renovations, or facility investment.

A growth-related increase should be distinguished from persistent inefficiency.

Insurance and Patient Mix

Payer contracts, fee schedules, adjustments, and collection performance can affect the revenue used in the overhead calculation.

Two practices with similar expenses may report different overhead percentages because their collections differ.

Accounting Methods

Overhead calculations can change depending on whether dentist compensation, depreciation, interest, and other expenses are included.

Before comparing your percentage against published figures, confirm that the accounting treatment matches.

For a broader explanation of expense definitions and financial management, explore our complete dental practice overhead guide.

How to Tell Whether Your Dental Practice Overhead Is Too High

A high percentage is a reason to investigate, not an automatic instruction to cut expenses.

Begin with the financial trend.

Compare Several Reporting Periods

Review overhead for the current month, previous quarter, and trailing twelve months.

Monthly figures can fluctuate because of seasonal revenue, irregular payments, or major purchases.

A rolling annual view provides more context.

Examine Changes in Collections

When collections decline, fixed expenses represent a larger percentage of revenue.

Check whether the problem is lower patient volume, payment delays, payer adjustments, or another collections issue.

Break Down Spending by Category

Compare staff expenses, supplies, laboratories, facilities, technology, and other operating costs separately.

Look for the categories responsible for the largest changes.

Identify One-Time Expenses

Equipment repairs, major upgrades, relocation expenses, and other exceptional items can temporarily affect financial results.

Account for these differences when making comparisons.

Evaluate Financial Performance Beyond Overhead

Overhead should be considered alongside operating income, cash flow, patient demand, staffing stability, and necessary future investments.

An aggressively low overhead rate is not valuable if it leaves the practice unable to maintain appropriate care and infrastructure.

How to Lower Dental Practice Overhead Without Compromising Care

Reducing unnecessary expenses requires a structured approach.

The priority should be sustainable improvements rather than indiscriminate spending cuts.

1. Audit Dental Supply Purchases

Review frequently purchased products and compare actual invoice prices.

Focus on equivalent product specifications, package quantities, and total delivered costs.

Ask current suppliers about available pricing arrangements.

You can also evaluate group purchasing agreements that may provide better prices on eligible products.

2. Review Laboratory Costs

Compare fees for equivalent laboratory services.

Evaluate turnaround times, materials, case quality, and remake policies alongside price.

3. Improve Inventory Management

Excess inventory can tie up working capital and increase the risk of expired products.

Insufficient inventory may cause urgent purchases and interruptions.

Use defined reorder points and periodic inventory reviews to maintain an appropriate balance.

4. Improve Scheduling Efficiency

Review appointment utilization, cancellations, overtime, and administrative workload.

An underutilized schedule can increase overhead percentages even when staffing levels are appropriate.

Operational improvements should preserve adequate appointment time and patient care standards.

5. Review Software Subscriptions

Identify unused features, duplicate subscriptions, and outdated contracts.

Consider whether existing systems can meet multiple operational needs without additional software.

6. Revisit Vendor Contracts

Evaluate service contracts, purchasing obligations, renewal deadlines, shipping expenses, and other recurring costs.

Do not focus exclusively on quoted discounts.

Calculate the total financial effect of changing a vendor relationship.

7. Track Net Savings

If your practice joins a purchasing program, distinguish gross purchasing discounts from net savings.

Net Purchasing Savings = Gross Savings − Membership Fees − Other Incremental Costs

The practical objective is to lower total purchasing expenses while maintaining acceptable clinical products, supplier reliability, and operational flexibility.

For a structured purchasing review, explore Reliant Dental Partners' dental practice savings approach.

A Practical Dental Overhead Review Checklist

Use this checklist during your monthly financial review.

• Calculate total operating expenses as a percentage of collections.

• Compare results with the previous month and trailing twelve months.

• Confirm whether expense categories are classified consistently.

• Review employee costs and scheduling utilization.

• Compare frequently purchased dental supply prices.

• Review laboratory spending against the treatment mix.

• Check facility and equipment expenses.

• Identify unused or duplicate software subscriptions.

• Review major vendor contracts and renewal dates.

• Investigate categories showing unexpected increases.

• Document corrective actions and responsible team members.

• Recalculate overhead after changes have been implemented.

Use the results to create a short, prioritized financial improvement plan rather than changing several systems simultaneously.

Frequently Asked Questions About Dental Practice Overhead Percentage

What is the average overhead for a dental practice?

Percentology reported average overhead of 62.2% of collections among more than 100 general dental practices in its 2025 financial dataset, published in 2026. This is a practice-level bookkeeping sample, not a nationally representative average. Results vary based on specialty, location, staffing, and accounting definitions.

Is 60% overhead good for a dental practice?

A 60% overhead percentage is often considered a reasonable target for an established general dental practice. Dental CPA Allen M. Schiff recommended 60% of collections in a 2021 Dental Economics article. However, practice owners should evaluate their expense mix, patient care needs, and profitability rather than relying on the percentage alone.

Is 70% dental overhead too high?

Seventy percent may indicate elevated expenses or insufficient collections for an established general practice. However, it does not automatically mean the practice is poorly managed. New practices, specialty offices, and growing businesses may have different cost structures. Compare category-level spending and operating trends before making changes.

How do you calculate dental practice overhead percentage?

Divide total operating expenses by total collections and multiply by 100. For example, a hypothetical practice with $600,000 in operating expenses and $1,000,000 in annual collections has a 60% overhead rate. Keep expense definitions consistent, particularly when handling owner compensation and financing costs.

What percentage of dental practice revenue should go to supplies?

In his April 2021 Dental Economics guidance, CPA Allen M. Schiff suggested approximately 6% of collections as a dental supply budget reference. This is a planning recommendation, not a universal industry average. Actual spending depends on clinical services, supply usage, vendor agreements, and accounting classification.

How can independent dentists lower their overhead?

Independent dentists can review supplier invoices, negotiate vendor agreements, evaluate group purchasing organizations, improve inventory controls, and identify administrative inefficiencies. The most useful improvements reduce net costs without compromising patient care, employee support, or necessary practice investments.

Does lower overhead always mean higher profits?

Not necessarily. Lower overhead can improve operating income when collections remain stable, but excessive spending cuts may weaken service quality, staffing, or growth. Practices should evaluate cash flow, clinical requirements, and longer-term business performance alongside the overhead percentage.

Conclusion: Use Dental Overhead Benchmarks to Make Better Decisions

A healthy dental practice overhead percentage is not defined by one universal number.

For an established general dental practice, around 60% of collections is a useful professional planning reference, while more recent practice-level data indicates that actual averages can be somewhat higher.

The most important questions are whether your expenses are sustainable, where costs are increasing, and which improvements can produce measurable financial value.

Start by calculating your overhead consistently, reviewing major expense categories, and comparing your results with appropriately matched benchmarks.

For independent dentists, supplies and laboratory agreements are two areas worth evaluating because purchasing arrangements can affect recurring costs.

Explore dental practice savings opportunities with Reliant Dental Partners and request an invoice-based review to determine whether eligible negotiated supplier agreements could help reduce purchasing expenses.

Financial disclaimer: Benchmarks in this article are reference points, not guaranteed performance targets. Hypothetical examples are not actual practice results. Consult a qualified dental accountant when interpreting financial statements or implementing significant cost changes.