The Bottom Line: Dental Practice Income
and Expenses
Introduction
As you graduate from dental school and begin your career in dentistry, you’re eager to know what you can expect to earn as income and what the expenses of operating your new practice will be. This report on dental practice income and expenses provides an economic overview to address some of the questions you may have, and offers some of the statistics available in an attempt to provide answers.
To gauge the trends in income, expenses, patient visits and more, this report uses data primarily from the ADA Survey Center’s 2003 Survey of Dental Practice: Income From the Private Practice of Dentistry.
These publications, available from the ADA Survey Center, reveal important data on dental practice income and expense status and trends in the United States, and are the nation’s primary sources of this information.
The topics discussed in this report on dental practice income and expenses represent a sampling of data from ADA Survey Center publications and include net income of private practitioners, dental patient visit patterns and expenses of operating a private practice.
Return to Top Net Income of Private Practitioners
A dentist’s net income is defined as his or her personal income after practice expenses but before payment of personal income taxes. This report focuses on net, rather than gross, income.
Dentists surveyed in the 2003 Survey of Dental Practice were asked to report their net income from all of their private practices as well as from other dentistry-related sources, such as teaching, consulting and hospital work.
Independent dentists, defined as those who own a dental practice or a share of a dental practice (sole proprietors or partners), make up about 90 percent of all dentists in private practice.
In 2002, the average independent general practitioner's net income from primary private practice was $174,350. The average independent specialist’s net income was $291,250. These figures represent a 0.7 percent and a 5.8 percent increase over the 2001 average net incomes for independent general practitioners and specialists, respectively.
In fact, independent practitioners’ net incomes have risen steadily since 1986, when general dentists made an average of $69,920 and specialists made an average of $97,920.
Net income by age. Another way of analyzing dentists’ net income is to look at breakdowns according to age (Figure 2). Age typically relates to years of experience in dentistry. A net income peak occurs among middle-aged dentists (45 to 54 years of age), while lower net incomes are seen during the beginning of, and retirement from, the dental career.
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| Figure 2. Average net income from the primary private practice of independent dentists by age, 2000. |
New dentists are most interested in predicted net incomes at the beginning of their careers. New dentists are those who graduated from dental school less than 10 years ago. The average net income from the primary private practice of a new independent dentist in 2002 was $192,040. The average net income of new independent general practitioners was $178,110. The net income of new independent specialists averaged $202,360 in 2000.
Income of employed dentists. Employed dentists, those who do not own all or part of their private practice, made up 6.8 percent of the dentists who were in private practice in 2002. The income of employed dentists can come from a salary, percentage, commission, associateship or any combination of these elements. Unless specified otherwise, statistics for employed dentists provided here represent general practitioners and specialists
combined. These statistics do not apply to independent contractors, who account for 3.6 percent of dentists in private practice.
Of those who are nonowners, about 66.9 percent graduated in 1981 or after, while the remainder (33.1 percent) graduated prior to 1981.
Employed dentists were on average 42.8 years of age in 2002, although 55.9 percent were younger than 40 years old.
Figure 3 shows employed dentists’ average net income from the primary private practice by years since graduation. Private practitioners who are employed dentists and have been out of dental school less than 10 years received an average net income of $102,910 from their primary private practice in 2001, while the same group 10 or more years out of dental school earned $83,500.
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| Figure 3. Average net income from the primary private practice of employed dentists by years since graduation, 1999 (weighted). |
Average income by region. The 2001 Survey of Dental Practice measured dentists’ incomes by region and found some interesting patterns. The average net income of independent dentists from the primary private practice in 2000 is shown by region in Figure 4.
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| Figure 4. Average net income from the primary private practice of independent dentists by U.S. Census region, 2002 (weighted). |
Independent dentists’ national average net income from primary practice was $193,980; for general practitioners, the average was $174,350, and for specialists, it was $291,250.
The geographical regions with the highest net income for independent general practitioners were the South Atlantic and Mountain regions.
Because a relationship exists between years in practice and net income, age differences are a consideration. The national average age was 50.9 years for independent private practitioners in 2001, 50.8 years for independent general practitioners and 51.3 years for independent specialists.
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Dental Patient Visit Patterns
From 1997 to 2001, average weekly patient visits (including visits to dental hygienists) remained relatively constant, with the highest average during this period occurring in 2001 (Figure 5). Trends in average weekly visits, excluding hygienist appointments, have shown more variation during this period, but have been basically constant as well.
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| Figure 5. Average number of total patient visits per week among all dentists, 1997 to 2001 (weighted). |
Emergency visits. Weekly walk-in and emergency visit trends have remained basically constant from 1997 to 2001. Dentists responding to the 2002 Survey of Dental Practice reported an average of 5.8 weekly walk-in and emergency visits. (This figure ranged from 5.4 in 1996 to 5.8 in 1995.)
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Expenses of Private Practitioners
When a patient sits down in your operatory, he or she represents expense as well as income. Private practicing dentists’ expenses per owner have risen steadily from 1997 to 2002, according to the Survey of Dental Practice. From a low of $254,200 in 1997, average practice expenses per owner-dentist have risen to $352,620 in 2002.
All independent dentists. In 2002, average total practice expenses per owner were $352,620 among all independent dentists. Total practice expenses among all independent dentists accounted for 60.3 percent of the primary practice gross billings in 2002.
New independent dentists. Among new independent dentists (those who graduated from dental school less than 10 years ago), the 2002 average primary practice total expenses per owner were $366,550. New independent dentists allocated an average of 60.5 percent of gross billings to the operation of the practice. In 1999, shareholder dentists’ salaries (an average of $124,270 per owner) represented the largest percentage (28.1 percent) of gross billings of new independent dentists.
All solo dentists. In 2002, total practice expenses per owner among all solo dentists averaged $307,180 (excluding shareholder salaries). For solo dentists, practice expenses in 2002 represented 59.7 percent of gross billings. Wage payments to employees represented 20.5 percent of gross billings among solo dentists in 1999. Laboratory charges accounted for 7.0 percent and dental supplies 6.2 percent of gross billings in 1999. Practice expenses for all new solo dentists averaged $334,880 in 2002.
The topics and statistics in this report on practice income and expenses represent only a sample of the issues and concerns of the new dentist. Research these issues carefully so that your dental practice decisions reflect estimated costs and receipts as accurately as possible.
The information provided by the ADA is invaluable when making dental practice purchasing and management decisions, and it offers dentists the ability to analyze business activity cycles and to project economic cycles and trends.
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