Educational content only. This post explains how financial concepts and published data apply generally to healthcare practices — it does not constitute advice for your specific situation. Figures referenced are from published industry sources. Consult your accountant, lender, and relevant advisors before making any significant business or financial decisions.
The conventional wisdom is that dentistry is lucrative. The nuanced version — which is the one that matters when you're actually running a dental practice — is more complicated.
Dental practices do generate high revenue per visit. Published benchmark data from the American Dental Association (ADA) Health Policy Institute and the Canadian Dental Association (CDA) Health Policy Institute describes average revenue per visit for general dental practices at levels that substantially exceed most other clinic types. That part is accurate.
What's less discussed publicly is where that revenue goes. Published dental practice benchmarking data describes overhead — total costs as a percentage of gross collections — typically ranging from 55–75% for a general dental practice. On a practice generating $1,200,000 annually, that's $660,000–$900,000 in expenses before the dentist-owner takes a dollar. Understanding why it's structured that way is the first step to managing it intelligently.
Staff Costs: 25–35% of Gross Collections
Consistently the largest overhead category across both ADA and CDA published surveys. The range reflects real structural variation — practices with active hygiene recall programs carry higher hygienist payroll but also generate more stable, recurring revenue from that hygiene base. Published dental practice management resources describe the hygiene-overhead relationship as a feature of the business model, not a pure cost line.
What this means in dollar terms: a 30% staff cost ratio on $1,200,000 gross is $360,000 in wages, benefits, and payroll taxes — before the owner's own compensation.
Facility Costs: 5–10% of Gross Collections
Published benchmarking data describes rent and occupancy at 5–10% of gross for a well-run general practice. The lower end typically reflects favourable lease terms, a secondary market, or space ownership. The upper end reflects major metro markets, newer leases, or above-market rates at renewal.
The structural distinction published commercial real estate resources describe for dental practices: fit-out costs — operatory plumbing, cabinetry, chair and equipment installations — are substantial enough that relocation is expensive and disruptive. This affects the negotiating dynamic at lease renewal in ways that differ from most other commercial tenants. The lease, once signed, tends to be sticky.
Supplies and Lab Fees: 13–20% Combined
This is the overhead category that surprises most operators and gets the least attention in early planning. Dental supplies — disposables, infection control materials, instruments, consumables — run 5–8% of gross collections per published ADA and CDA surveys. Lab fees — crowns, bridges, dentures, orthodontic appliances, prosthetic work — add another 8–15% in restorative-focused practices.
Combined, supplies and lab fees often represent the second-largest overhead category. Published dental practice management resources consistently identify lab fee management as a meaningful profitability lever — one that doesn't require any change to clinical protocols, only periodic review of laboratory relationships and fee schedules. The data suggests this is underused.
Equipment Maintenance and Depreciation: 3–5%
The category most underestimated in early ownership. Compressors, autoclaves, X-ray sensors, handpieces, and intraoral cameras all have service lifecycles. Published resources describe equipment costs as tending to increase as a practice ages and as creating periodic capital events — major replacements — that don't fit neatly into annual operating budgets. Building a replacement reserve from the start is described in published resources as standard in well-run practices.
Administrative and Other: 5–10%
Accounting, legal, marketing, continuing education, software subscriptions, professional dues. Published resources note that dental practices in competitive markets typically run higher patient acquisition costs than specialties with stronger referral-based pipelines — marketing investment is a real variable, not a fixed line.
The Net Margin — What Published Data Actually Shows
After all of the above, before owner compensation, published CDA surveys describe Canadian general dental practices generating net margins of approximately 30–45% of gross collections. Published ADA data describes similar ranges for US practices, with meaningful variation between top and bottom quartiles.
The spread is real and it reflects specific practice characteristics. Published research on dental practice performance consistently identifies payer mix, hygiene recall rate, staff-to-revenue ratio, and lab cost management as the four variables that most differentiate practices across the margin range. Each of these is manageable. None of them sort themselves out without attention.
The Payer Mix Variable
Published data from both the ADA and CDA describes payer mix — proportion of fee-for-service versus insurance billing — as one of the most significant margin drivers in dental practice. Insurance reimbursement rates are set by payer schedules and may sit below the practice's own fee schedule. The gap between what a fee-for-service patient pays and what an insurance-scheduled patient generates can be substantial depending on the procedure and the insurer.
This variable matters for benchmark interpretation: published ranges are typically aggregates across both populations. A practice with a predominantly fee-for-service patient base will have a materially different revenue-per-visit and margin profile than one that's insurance-dependent — even with identical clinical operations. Understanding which population you're actually being compared to is a prerequisite for using any benchmark comparison productively.
→ See also: What Healthy Margins Look Like for a Dental Practice
Published revenue, margin, and overhead ratios for dental practices in Canadian and US markets. Enter your own numbers and see how your practice compares to published data for your specialty. Separate models for each market.
Compare Your Numbers →Disclaimer: All financial figures and ranges referenced are from published industry sources and represent general patterns — not estimates for any specific practice. KlinDeck is not a financial advisor, accountant, lender, or lawyer. The tools referenced are educational references only. Consult qualified professionals before making significant business or financial decisions.