What Dental Practice Overhead Should Actually Look Like in 2025–2026

I paid a CPA $750 for a year-end review. Then $1,500 for a “financial assessment” from a dental consultant. Both times I walked away with a PDF that told me my overhead was high — and nothing else. No breakdown by category. No benchmarks to compare against. No idea where to actually start.

So I built the tool I always wanted. What follows is the data behind it — a breakdown of what each overhead category should look like as a percentage of net collections, based on ADA Health Policy Institute data, dental CPA benchmarks, and what I track running my own practice in Spokane each month.

The benchmark table

There are two tiers: startup practices (0–3 years) and established practices (4+). Startups run higher overhead across the board — that’s expected, not a problem. You’re still building your patient base, negotiating vendor relationships, and filling your schedule. Established practices with those same numbers have a solvable problem. All percentages are based on net collections — what you actually deposited after write-offs — not gross production. If you’re heavy PPO, that distinction matters a lot.

The number everyone misuses

The familiar advice — “keep overhead under 60%” — is true but almost useless on its own. A practice at 64% overhead could be struggling with payroll, overspending on supplies, or paying too much for a lease they signed ten years ago. The number itself doesn’t tell you which one. You have to break it into categories, compare each one against a specific benchmark, and rank the gaps by dollar impact. That’s the only way to build an action list that actually changes your take-home pay.

The five that actually move the needle

Five categories account for 85–90% of total overhead in most dental practices. Everything else — merchant fees, dues, meals, business insurance — is worth knowing but rarely moves the number meaningfully. If you only have time to focus on a few things, start here.

1. Staff payroll — biggest line, biggest lever

Staff payroll typically runs around 30% of net collections — more than rent and supplies combined, and usually the single largest overhead line on the P&L. When it’s over benchmark, the cause is almost always one of three things: production volume hasn’t kept pace with a growing team, hygiene isn’t fully scheduled, or compensation crept up year over year while collections stayed flat. Cutting pay is rarely the right answer. The more durable fix is growing production per chair so the existing team becomes proportionally less expensive.

2. Dental supplies — the easiest win

Most practices overpay 15–20% on dental supplies because they’ve never systematically price-shopped. The benchmark is 5% of net collections, and if you’re sitting at 7–8%, nearly all of that gap is recoverable without changing a single clinical protocol. The approach is straightforward: get competing quotes from Patterson, Schein, and Benco, show each of them your current invoice, and ask them to beat it. Switch gloves, masks, and disposables to house brand. I’ve closed a $30K annual supply gap in one afternoon doing exactly this — it just requires someone to actually make the calls. For a deeper breakdown of tactics, see the full dental supply cost playbook →

3. Lab fees — the one you can actually negotiate

The target is 8% or below for an established practice. When you’re over, it’s usually one of two scenarios: you’ve been with the same lab for years and there’s been no competitive pressure on pricing, or you have a genuinely high crown and bridge volume that’s legitimately driving costs. The first scenario is a one-call fix — ask your lab for an itemized fee schedule, get one competing quote, and bring it back to your current vendor. Most labs would rather adjust their pricing 10–15% than lose a long-term account.

4. Marketing — where most practices are quietly falling behind

The benchmark is 4.5% of net collections for an established practice. Most of the practices I’ve analyzed are running under 2%, and it shows up in stagnant new patient numbers long before it appears on the P&L. Under-investing in marketing isn’t being conservative — it’s slowly limiting your schedule. Google Ads typically delivers new patient calls for $30–60 in most markets, which means every dollar you’re not spending is a patient your competitor is getting instead. A practice at $800K in collections spending 1.5% on marketing is almost certainly leaving meaningful production on the table every month.

5. Facility — hardest to change, still worth knowing

Rent can’t be renegotiated tomorrow, which is why most dentists stop thinking about facility costs until they’re forced to. But knowing exactly where you stand matters for two reasons: it tells you whether your next lease renewal window is coming at the right time to make meaningful asks, and it reveals whether you’re producing enough per operatory to justify the space you’re in. A practice with eight operatories producing $200K per op annually — when the best-in-class benchmark is $350K — doesn’t have a rent problem. It has a capacity utilization problem, and facility overhead is just where that shows up on the report.

What about your own compensation?

Owner comp is excluded from overhead calculations — but it’s the most important number on the report. The target is 30% or more of net collections, which means salary plus any distributions you’ve taken throughout the year. If you’re taking home less than that, overhead is consuming margin that should be flowing directly to you as the practice owner. That’s the real cost of elevated overhead: it doesn’t just make the percentage look bad — it directly reduces what you pay yourself every year.

Does practice age matter?

It matters quite a bit. A startup running 68% overhead isn’t in trouble — it’s just where most early practices land while they’re building production volume and filling the schedule. That same overhead percentage in a 12-year practice is a real problem with real, addressable causes. Here’s how I read the numbers by practice stage:

• Startup (0–3 years): Under 65% is a strong result. Between 65–72% is expected and not cause for alarm. Over 72% warrants a closer look at staffing levels and supply costs specifically.
• Established (4–10 years): Under 58% is best-in-class. Between 58–63% is healthy. Between 64–70% is a warning worth investigating. Over 70% is urgent — there’s almost certainly a specific category driving it.
• Mature (10+ years): The same thresholds apply, but the bar for “acceptable” should be lower at this stage. With established vendor relationships, a referral base, and a full schedule, anything above 58% is an opportunity the practice has the leverage to close.

How to use this right now

Pull your most recent 12-month P&L and calculate each major category as a percentage of net collections. Compare every line against the table above and circle anything that’s more than one point over benchmark. That becomes your list. Then sort it by dollar impact rather than percentage gap — two points over on a $1.5M practice is $30K in recoverable overhead, while two points over on a $400K practice is $8K. Same gap, very different priority.

In most practices I’ve analyzed, there’s between $30K and $80K in recoverable overhead sitting in two or three categories. It’s been there for years — not because no one cared, but because no one had ever shown the owner exactly which categories were over, by how much, and what it was costing them in real dollars. That’s what DentalPNL does.

Dr. Oliver Carr, DMD

Practicing dentist-owner · Spokane, WA · Founder, DentalPNL

I practice general dentistry in Spokane and co-own my practice. After years of paying consultants for reports that told me my overhead was high but never showed me exactly where — or what to do about it — I built DentalPNL to give every dentist-owner the specific, benchmarked analysis I always wanted. Upload your P&L and have a full report in your inbox in about 60 seconds.