Overhead is everything it costs to run a practice around the clinicians — staff, rent, lab, supplies, marketing and the long tail of software, insurance and admin — divided by collections. In most markets a general practice sits at 55–65%, and the Practice overhead calculator breaks that into the categories that matter: staff 25–30%, rent 5–8%, lab 6–10%, supplies 5–7% and marketing 2–5%. A total above 70% means one category is out of line, and the culprit is more often under-booked chairs than over-staffing, because every one of those percentages has revenue underneath it.
What counts as overhead
Overhead is the cost of the business, not the cost of the dentist. Include:
- Staff: wages, on-costs, superannuation or pension contributions, payroll tax, agency cover and recruitment, for everyone except the dentists.
- Rent and occupancy: rent or mortgage interest, outgoings, utilities, cleaning, repairs.
- Lab: every external lab invoice, and the materials for any in-house milling.
- Supplies: clinical consumables, small instruments, sterilisation.
- Marketing: website, advertising, directories, signage, patient communications.
- Everything else: practice software, indemnity and business insurance, accounting, bank and merchant fees, equipment leases, depreciation, continuing education.
Leave out the dentists' pay, whether associates or the principal; the owner's drawings; income tax; and loan principal repayments (the interest is a cost, the principal is not). Definitions differ between published benchmarks — some include associate pay, and association surveys that report net income per dentist deduct every expense first — so check what a figure includes before you compare yourself with it. The UK's NASDAL benchmarking, for instance, reports wages and direct costs at 47% of fee income in 2025, a figure that includes associate pay and is not comparable with the staff range above.
The general-practice norm
At the calculator's default inputs — $1,200,000 of revenue with staff $300,000, rent $90,000, lab $80,000, supplies $70,000, marketing $40,000 and everything else $110,000 — total overhead is $690,000, or 57.5%. That is a healthy practice by most benchmarks. Each category against its range:
| Category | Default | Share of revenue | Benchmark |
|---|---|---|---|
| Staff (excluding dentists) | $300,000 | 25.0% | 25–30% |
| Rent and occupancy | $90,000 | 7.5% | 5–8% |
| Lab | $80,000 | 6.7% | 6–10% |
| Supplies | $70,000 | 5.8% | 5–7% |
| Marketing | $40,000 | 3.3% | 2–5% |
| Everything else | $110,000 | 9.2% | — |
The currency is a placeholder; the ratios are what travel between markets. Small practices, and practices under about a million in collections, commonly run higher than the range because rent and a minimum front-desk roster do not scale down. Well-run practices above that size are often in the low 50s.
The pressure is upward. In the 2025 Dental Economics/Levin Group survey, 58% of practices reported higher overhead than the year before, the average rise was 4.5%, and 55% named rising overhead as their biggest challenge — so a practice holding steady at 60% is doing better than it looks.
What each category tells you
Staff, 25–30%. The largest line and the one everybody reaches for first. Before cutting hours, check the roster against the appointment book by day and by chair: a common pattern is a full Friday roster for a half-booked Friday.
Rent, 5–8%. Hard to move between lease reviews. If it is well over 8% the practice is either too small for its premises or not producing enough from them; the answer is usually more chair hours from the same rooms, not a cheaper lease.
Lab, 6–10%. Lab follows procedure mix. A high lab share alongside high crown, bridge and implant production is a sign of a profitable practice; a high lab share with ordinary production usually means fees have not kept pace with lab prices.
Supplies, 5–7%. Drifts through ordering by habit rather than by stock level. A single buyer, a par-level list and quarterly price checks with suppliers keep it in range.
Marketing, 2–5%. Judge it against what a new patient costs and is worth, not against the percentage alone. Two percent that produces no new patients is expensive; five percent that fills a new chair is cheap.
Everything else, around 10%. Software subscriptions accumulate. Go through them once a year.
Why to separate the owner's clinical pay
Overhead tells you what the practice costs to run; it does not tell you whether the business makes money. For that, take the clinical work you do yourself out of the picture. The Dental practice profit calculator does this at its defaults: revenue $1,200,000, overheads $690,000, earnings before owner's pay $510,000, less $250,000 for what a dentist would be paid to do your chair time, leaving $260,000 of true profit, a 21.7% margin.
That is the number a buyer, a bank or a valuer will use. If a practice shows a surplus only because the principal works for less than an associate would cost, the business itself is not profitable, and the surplus will disappear the day an associate replaces those hours. A fair figure for your own clinical pay is what you would pay an associate to produce the same collections, typically 30–40% of the collections you personally generate.
What a high number usually means
Look at capacity before cost. The Dental chair utilisation calculator at its defaults — three chairs, nine hours a day, 230 days, 4,500 booked hours — shows 6,210 available chair hours, a utilisation of 72.5%, and 1,710 idle hours worth about $769,500 at $450 an hour. Fill just a third of those hours and revenue rises by roughly $256,000 with almost no change in staff, rent or software. Staff at $300,000 falls from 25.0% to about 20.6% of revenue without a single roster change, and total overhead drops by around five points.
Only after utilisation is above 80% do the cost-side questions apply, and in this order: fees that have not been reviewed in two years; a roster that does not match the appointment book; lab and supply prices that have moved while fees have not; and finally rent. Hiring ahead of demand is the one genuine over-staffing pattern, and it shows up as a staff percentage that jumped in one quarter rather than crept.
How to measure it quarterly
- Have your accountant code the profit and loss into the six categories above. Once the chart of accounts is set, the quarterly numbers fall out of the management accounts without extra work.
- Use the same twelve-month or three-month period for revenue and costs. Collections from the practice software against costs from the accounts, both for the same dates.
- Enter the figures into the Practice overhead calculator each quarter and watch the movement in each category, not just the total. A category moving two points in a quarter is the signal.
- Recalculate break-even whenever fixed costs change. At the Practice break-even calculator defaults — $55,000 of fixed costs a month and variable costs at 15% of revenue — the practice needs $64,706 a month, or $3,406 a day over 19 working days, which is about 13.6 appointments a day at $250 before it earns anything. Reception can use that daily figure to see what an unfilled day means.
What to do next
- Pull the last full year's profit and loss, group it into the six categories and run the Practice overhead calculator to see which one, if any, is outside its range.
- Before acting on any category, run the Dental chair utilisation calculator. If utilisation is under 80%, filling chairs is the fix; cost-cutting comes second.
- Run the Dental practice profit calculator with a realistic figure for your own clinical pay, and treat the margin it shows as the number the practice is really earning.
