Finance and valuation
Payroll percentage
Payroll percentage is team payroll divided by collections, shown as a percentage, and it shows how much of each collected dollar goes to pay the team.
Payroll is usually the largest line in a practice's costs, though this depends on the office. ADA News (March 2022) stated that variable costs, such as payroll, lab fees, dental supplies and office supplies, should run around 45 to 55 percent of practice income. That is one adviser's guide, not a rule, and it groups several lines together. Sources define payroll differently: some include owner dentist pay, benefits and payroll taxes, and some do not. Before comparing a benchmark, check what is counted. Payroll percentage is one part of total overhead percentage. Employment questions about pay should go to an attorney or CPA.