Dental practice overhead benchmarks (and how to cut yours)

Overhead is the one number that decides whether a busy practice is actually a profitable one. Two offices can produce the same dentistry and take home wildly different amounts. Here’s what healthy overhead looks like by category, and where independent practices most often overspend without realizing it.

What overhead actually measures

Overhead percentage is total operating expenses divided by collections — not production. Using production flatters the number, because you can’t pay rent with dentistry you were never paid for. The general-dentistry benchmark sits around 60%, leaving roughly 40% as the owner’s return plus profit. Below 55% is excellent; consistently above 70% means you’re working hard for very little.

Crucially, you can only calculate it by combining PMS collections with your accounting data — the exact seam where most practices go blind. (More on that in why your PMS reports aren’t enough.)

The benchmark ranges by category

A single overhead number tells you there’s a problem; the per-category breakdown tells you where it is. Typical healthy ranges, as a percentage of collections:

Staff / payroll — ~25–30%

Almost always the largest category. The trap isn’t the hourly rate — it’s payroll as a percentage of collections, which spikes when production per day is soft. The fix is usually a fuller schedule, not a smaller team.

Lab fees — ~8–10%

Higher for restorative- and crown-heavy practices. Worth re-bidding periodically; lab pricing drifts and loyalty rarely earns a discount you didn’t ask for.

Dental supplies — ~5–7%

Creeps up quietly through convenience ordering and rep relationships. A periodic competitive review of your top 20 SKUs usually finds real money.

Facility / rent — ~5–8%

Largely fixed, which is the point: because it doesn’t move, every additional day of production spreads it thinner and pulls your overhead percentage down.

Everything else — equipment, marketing, admin

Individually small, collectively meaningful. Marketing in particular should be judged on return, not cost — see what a new patient actually costs.

Where independents overspend most

• Carrying the cost of uncollected work. A soft collection rate means you paid the lab, the staff, and the supplies for production you never banked. Fixing collections is an overhead fix.
• Supply and lab autopilot. Costs that were competitive three years ago rarely still are.
• Under-scheduled days. Fixed cost spread over fewer chairs filled is the most common silent overhead inflator.

Make it a monthly habit

Overhead is a monthly metric — review it once the books close, by category, against benchmark. Looked at that way, it stops being a year-end surprise and becomes a steering wheel. It’s one of the core practice KPIs worth watching every single month.