Staff costs typically run 25 to 30 percent of collections and represent your largest overhead expense. This includes front desk staff, dental assistants, and hygienists. Owner compensation is tracked separately since it comes from profit, not overhead. If staff costs creep above 30 percent, you’re either overstaffed relative to production or your collection rates need attention.

Facility costs should land between 5 and 7 percent of collections. Rent, utilities, maintenance, and property-related expenses fall here. Practices in high-rent areas of Los Angeles County sometimes run slightly higher, but consistently exceeding 10 percent squeezes margins that could go toward equipment or take-home pay.

Dental supplies typically range from 5 to 8 percent. These are your consumables like gloves, masks, impression materials, and bonding agents. A practice running 10 percent or higher on supplies is either stocking inefficiently, experiencing waste, or not categorizing expenses correctly in the first place.

Lab fees vary widely based on your service mix. General practices doing mostly cleanings and fillings might see 5 to 8 percent. Practices heavy on crowns, bridges, and implant restorations can run 10 to 14 percent. The benchmark matters less than tracking your own trend over time and understanding what drives changes.

Marketing spend for established practices typically runs 1 to 3 percent of collections. Newer practices or those in competitive areas might spend 5 percent to build patient volume. Once recall patients fill your schedule, marketing spend naturally decreases. Administrative costs including practice management software, liability insurance, and continuing education typically add another 3 to 5 percent combined.

Total overhead for a healthy dental practice generally lands between 55 and 65 percent of collections. That leaves 35 to 45 percent for dentist compensation and profit. Practices running above 70 percent overhead struggle to pay owners fairly while reinvesting in the business.

The problem is that most practices don’t actually know their numbers by category. Expenses get dumped into generic accounts, supply costs get mixed with equipment purchases, and lab fees get buried in a catchall dental expense category. Without clean books categorized correctly, you can’t compare yourself to benchmarks or spot problems early.

Start by making sure your bookkeeping breaks expenses into the right categories. Then pull these ratios monthly or quarterly. Compare to benchmarks, but more importantly, compare to your own history. A sudden jump in supplies from 6 to 9 percent tells you something changed. Maybe ordering patterns shifted, maybe there’s waste, or maybe someone just miscategorized a purchase. That’s when benchmarks become useful for actually running the practice rather than just being numbers on a page.

If you’re not sure where your practice stands, a small business accountant in the San Gabriel Valley who works with medical practices can help restructure your chart of accounts and establish the tracking you need to monitor these benchmarks consistently.