There’s a number that every dental practice owner should know by heart, and most don’t: their overhead percentage. It’s the single most telling indicator of a practice’s financial health, and in 2026, it’s moving in the wrong direction for a lot of offices.
Industry benchmarks put the average dental practice overhead at 60-65% of production. That means for every dollar you collect, 60 to 65 cents goes to keeping the lights on before you take home a penny. Once overhead crosses 70%, profitability starts getting seriously strained.
The ADA’s Health Policy Institute tracks dental economic conditions through quarterly surveys and publishes the most authoritative data on practice benchmarks. Their latest findings are available at ada.org/resources/research/health-policy-institute.
What’s Driving the Squeeze
The biggest culprit is labor. About 90% of dental practices report difficulty hiring staff, particularly hygienists and dental assistants. When supply is tight and demand is high, wages go up.
Supply costs are the second major pressure point. Tariff-driven price increases on materials, equipment, and consumables have been pushing costs higher since 2025. Then there’s insurance complexity — increased claim denials, delayed payments, and shifting reimbursement models that eat into both time and money.
The Problem with “Feeling” Profitable
Here’s what we see when we start working with a new dental practice: the doctor knows they’re busy. Chairs are full. The schedule is packed. But when we run the numbers, the picture doesn’t always match the feeling.
Production doesn’t equal profit. If you’re producing $80,000 a month but collecting $68,000 and spending $52,000 on overhead, your actual take-home is $16,000 before taxes, debt service, and retirement contributions. That’s not a thriving practice — that’s a practice working extremely hard to stay in place.
DIY: The Monthly Practice Financial Scorecard
| ✅ 5 NUMBERS EVERY DENTAL PRACTICE SHOULD TRACK MONTHLY You can pull these from your practice management software and your accounting system. Track them monthly in a spreadsheet and watch for trends. 1. OVERHEAD PERCENTAGE: Total operating expenses (everything except doctor compensation) ÷ total collections. Target: under 65%. 2. COLLECTION RATE: Total collections ÷ total production. Target: 95%+. If you’re below 90%, you have a billing or insurance problem. 3. PRODUCTION PER PROVIDER: Total production ÷ number of providers. Compare month over month. Declining production per provider means a scheduling, case acceptance, or efficiency issue. 4. ACCOUNTS RECEIVABLE OVER 90 DAYS: Pull your AR aging report. Anything over 90 days old is at high risk of never being collected. If this bucket is growing, your follow-up process needs work. 5. ADJUSTED PRODUCTION PER HYGIENE HOUR: Hygiene production ÷ hygiene hours worked. This tells you whether your hygiene department is generating enough revenue to justify its cost. If it’s not, you may need to add services or adjust scheduling. These five numbers take about 20 minutes to pull each month and will give you a clearer picture of your practice’s financial health than any gut feeling ever could. |
Fee Strategy Is Part of the Equation
When costs go up and reimbursements stay flat, something has to give. Industry advisors recommend a minimum 4% annual fee increase for 2026. The key is being strategic: increase specialty codes where you have pricing power (crowns, implants, cosmetic work) while keeping routine hygiene fees competitive to maintain patient volume.
Burkhart Dental Supply published a practical 2026 fee strategy guide that walks through the methodology, including how to benchmark your fees by zip code.
The Bottom Line
Running a dental practice in 2026 requires financial agility — the ability to see your numbers clearly, respond to changing conditions quickly, and make decisions that protect your margins over the long term.
At BKKPRS, we provide monthly financial reporting and fractional CFO support specifically designed for medical and dental practices. We help you see the full picture — not just what your practice management software tells you, but what your actual financial performance looks like from a business perspective. If your overhead is creeping up and you’re not sure why, let’s dig in.
