If you want to know your salary as a dental practice owner before starting a dental practice, then this article is for you!
Owning a dental practice salary varies from state to state. The average salary of a dental office owner in the USA is just around $160,000 reported by the US Bureau of Labor Statistics. The salary may appear to be good compared to the overall average.
But if you realize how much it requires to operate a dental practice and the responsibility that comes with this, the average salary of the dental practice owners is inadequate. However, if you are a dentist, having a practice isn’t bad at all.
To know more, keep reading.
Owning A Dental Practice Salary: How To Estimate
Managing and owning a dental office is a massive task. So starting a dental office is a critical business decision. They are exceedingly difficult to run efficiently due to the high costs.
But when you are a dentist, you can set the finest hours for yourself and increase your own earnings. You can also establish a strong patient network over time which helps to boost your personal income.
Now let’s check how to determine the dental practice owner’s salary. When deciding on a payment, there are 3 things that every dental practice owner needs to think about.
1. Various methods for dental practice owners to pay themselves
There really is no common percentage that a practice owner must pay themselves. It’s an intensely personal statistic that’s usually made up of a mixture of W-2 wages as well as business distributions.
You need to strike a balance between your personal and company’s cash flow. And then there is the matter of lifestyle plans and retirement goals to consider.
W-2 salaries are usually considered a dentist’s primary source of bringing money home. But this is not the only method by which the dentists may pay themselves from their business, there are some other methods as well.
Around 12.4 percent of social security and 2.9 percent of medicare taxes must be deducted from the W-2 income. In addition, withholding from an employee’s paycheck is perhaps the most prevalent method of paying state and federal income taxes.
Finally, if you’ve got a retirement policy that offers salary deferrals such as a 401(k) or any other plans, these should be withheld via the paycheck.
You may also be eligible to obtain dividends from the office in addition to your salaries. Because it is not performed through W-2 payments, it is exempt from the social security & medicare taxes. This can result in a 12.5 percent savings in employment taxes.
We can just assist you to determine your salary which will allow you to lead a decent life. This is your money at the end, however, you should spend it responsibly.
2. Taxes and Retirement Plans
In 2018, the IRS set a $275,000 yearly salary maximum for those who want to maximize their personal 401(k) savings as well as an employer contribution.
If you run a retirement program, it is not really a wise decision to pay yourself more than 275,000 dollars in W-2 salaries as every penny that pays yourself via payroll will be included with payroll taxes.
Some of the dental owners require more income to support their lifestyle after increasing 401(k) wage deferrals & withholdings for the taxes on such a $275,000 wage.
Keep the rest of the money as you require as a distribution from your business to supplement.
According to the company structure, any additional earnings will then be taxed as regular flow-through/distributive income which is not included in payroll taxes.
You need not reach the $275,000 threshold for pension if you don’t even have a retirement savings plan.
You can reduce your payments and avoid paying employment taxes. If you choose a less salary and require additional money, you can be able to increase your distributions.
3. Wise investment of the money
When you have a good year, it is really appealing to take more dividends. This may not be the best strategy.
First and foremost, you must evaluate the tax implications of the additional income.
You may stay within your capabilities as well as avoid a luxurious lifestyle by maintaining a stable relationship with your salary & dividends.
A better strategy is to invest the additional money in dental practice equipment after discussing it with the financial advisor instead of buying a luxurious car.
Now let’s see some salaries earned by dentists from any private practice.
The average income of the dentists in 2018 was $220,950 as per the American Dental Association.
This figure was greater for dental experts ($330,180) as well as dental practice owners ($233,840). This is lower ($160,110) for dentists who worked in a practice.
And here’s the estimated net income of dentists in any private practice in 2018 as per dental specialty:
- $420,020 for oral & maxillofacial surgery
- $353,790 for orthodontics & dentofacial orthopedics
- $342,950 for endodontics
- $287,040 for pediatrics
- $268,830 for periodontics
- $233,550 for prosthodontics
Dentists do not earn the salary mentioned above from starting the job. However, as a dentist, you may need some effort and time to realize your greatest earning potential.
Dentists are paid differently in different states. An average wage chart obtained from the Bureau of Labor Statistics website is shown below.
The dental practice’s location has a significant impact on the prospective revenue.
According to the Bureau of Labor Statistics, the average earnings of a dentist in Rhode Island is more than $130,000 which is higher than the dentist located in West Virginia in May 2019.
|State||Average Dentist Salary ($)||State||Average Dentist Salary ($)|
|Rhode Island||262,900||West Virginia||126,880|
As the average salary is low, here are some techniques to raise the average dental practice owner’s salary. Have a look at them.
1# Make A Gorgeous Dental Practice
Presentation is essential when it comes to increasing the dental practice owner’s salary.
Firstly, you have to think about whether you want to rent or buy your building for making your office. It is really an important way to make more money. So decide if you like to be in charge of building management or want to assign it to others.
If you rent a building that is limited in space, it can make your office messy. Perhaps your workplace isn’t in the perfect location to meet your desired audience.
However, a larger area will assist you to attract the right patient. When you can not afford to move, try sharing office space with another.
It’s fantastic if you’re at ease with your surroundings. But do you renovate your office ever? Is the carpet stained or worn out? Consider all of these and take action accordingly.
Because maintaining a clean, appealing, and sophisticated dental practice portrays your brand as reputable and high-quality. And that will bring your clients back to your office over and over again.
2# Focus On The Marketing
You must advertise yourself in order to enhance your dental practice owner’s salary.
Every dental office requires 2 full-time marketing employees. If you do not have sufficient dental specialists to manage this amount of marketing, you should conduct with dental office care, allowing at least 1 employee to focus on marketing.
Usually, dental office care checks insurance coverage, submits claims, & deposits funds into the customer’s accounts.
To eradicate any dental professional who handles insurance in your practice, simply shift them to marketing.
You should also go through digital marketing to catch your potential customers. And hence, you can approach a professional digital marketing agency rather than hiring a permanent employee.
A well-optimized website also keeps you ahead in creating brand value. You should consider hiring a professional to have a good-looking dental practice website for you.
3# Provide Adequate Services
Create dentistry that inspires enthusiasm to enhance the dental practice owner’s salary.
Though most dental offices offer kind of similar services, it is crucial to figure out what distinguishes your practice from others.
Think about which operations do you prefer to perform over others? Many have a preferred sector of dentistry and services. You can choose actually much better operations than the others to provide the best care.
But anyway, are there any other techniques you can offer? Maybe you can invest in the latest technologies.
4# Serve Your Patients With Convenience And Comfort
Build a convenient relationship with the patients to raise the dental practice owner’s salary.
The importance of convenience in any business cannot be overstated. Patients do not just expect to be treated nicely when they visit the dentist. They also wish to be able to get treatment quickly and easily.
Do you ever think about using online appointment scheduling software? Do you even have any spare time to immediately offer care in the event of an emergency? Why not experiment with non-traditional office hours 1 or 2 two days a week? Patients who do not enjoy skipping work will appreciate this step.
Patients who need to come in the dental care for lengthy appointments can do that in the morning. So lunch can be served for them.
Such sort of experience can not only increase the entire customer experience but also you will be able to demand a bit more which can aid you to maximize the dental practice owner’s salary.
Moreover, you can also employ dental intelligence which enables patients of paying their bills by only using their smartphones. That sounds so convenient.
5# Eliminate The Charges For Using A Credit Card
Cut down the credit card costs to boost the dental practice owner’s salary.
Many people are overpaying for the flexibility of accepting credit cards. There are many companies that offer this service for free to the practice. You can employ this in your practice as well.
Consider how much cash you spend on credit card charges each year. Then why doesn’t take that cash and put it in your pocket?
6# Recruit The Trained Employees
Increase the dental practice owner’s salary by hiring the right people and creating a welcoming environment for your employees and patients.
The employees are the most crucial aspect of a successful dental office. When you assemble together the ideal dental team, the obligations and work stress as a business owner can be greatly reduced.
The dental practice manager, dental assistants, treatment coordinator, & hygienists- all have to be well-trained so that they can represent your dental practice exactly how you want to represent it.
The necessity of the dental business culture as well as how the clients feel while being in the treatment under the dental staff surpasses the necessity of the outdated carpet as well as location.
Don’t skip the training possibilities for your employees. Investing in employees not only builds trust among them but also provides the impression that the whole team is better educated and competent.
As a result, you will have more faith in your dental office, more patient loyalty, as well as a higher salary for the dental office owner.
Before you dream of becoming a dentist, you must first know about dentistry school debt.
Dental School Debt on Average
The debt load you pay while getting your dental degree, like another degree, is determined by whether you choose a private or public institution.
On average, governmental schools are less expensive than private schools, allowing you to put on fewer debts during obtaining your degree.
- In 2016, the average debt from a private dentistry school was $291,668.
- In 2016, the average debt from a public dentistry school was $239,895.
Dental school student debt pays off
The costs and debts of dental school are two of the most common reasons while considering to become a dentist. However, if you have large student loans to pay off, you should budget carefully and plan for a great career to finish up those debts as a new dentist.
Dental school, like medical & law school, is the most demanding school available now.
In 2016, more than 30% of dentistry school students graduated with debts of more than $300,000, whereas 80% left with debts of more than $100,000.
The overall dental school loan in 2017 was 287,221 dollars, as per the American Student Dental Association.
Furthermore, the interest on dental school debts can cost you a thousand dollars. Over the course of ten years, a 292,169 dollars student debt with a 7 percent rate of interest might generate roughly $115,000 of interest.
By moving to a cheaper rate, you might possibly free up more cash, get out of debt faster, as well as save money over time.
Over the course of ten years, moving to a 5 percent from a 7 percent interest rate would save you more than $35,000.
How Much Time Does The Dental School Require To Pay Back?
You can estimate how much time it can require to pay back the dental student loans assuming you take the overall $287,221 dental school debt. Then you can compare it to the average beginning rate of a junior-level dentist.
These values will have to be adjusted based on the debt burden and entry-level salary. To begin, think about student debt repayment options.
Here’s an instance of using the PAYE program to pay off the loans:
Suppose you pay $300,000 in student loans in dentistry. Then you have to earn $90,000 each year as a fresh dentist.
You can register in the PAYE plan directly after graduation and begin paying 10 percent of the earnings as long as you get a job. This equals $9,000 a year, or $750 every month.
You can make the payment for 5 years before getting a promotion & earning $120,000 each year. The student loan payments will rise to $12,000 annually or $1,000 monthly.
For the following 15 years, you will earn the following amount. You spent $9,000 per year for 5 years which equals $45,000. Later you can spend $12,000 every year for 15 years which equals $180,000.
You have already paid back $225,000 of the total $300,000 loan, and the remaining $75,000 can be forgiven.
Alternatively, you’ll have to include $75,000 to the taxable income for the year and get it taxed as per the tax bracket. At $120,000 per year, you will be taxed at a rate of 24 percent, or $18,000, just on the forgiven figure.
There are a variety of other ways to pay for dentistry school besides the ones described above. Everyone must assess their financial circumstances to evaluate whether or not a dental student loan is worthwhile.
When your classmates can earn $71,000 a year with simply a bachelor’s degree in physics, you’re still in your school and working for a degree and accumulating debt.
However, if you can handle all of the things properly and open a successful dentistry office, you can recover your lost wages while also paying off your loan.
I hope you’ve got your answer. Now you know the approximate salary of the dental practice owner.
Dentistry is considered to be amongst the top 10 highest respectable and trusted occupations in the United States. In order to manage a profitable dental business, you have to make sure that you hire the correct people and that you know all about your office well.
Though owning a dental practice salary is low, you can increase it by following this article.
Best of luck!
Md Tangeer Mehedi Is The Owner Of ImplantsMarketing.com & Dental Marketing Expert. He Is Responsible For Strategizing And Handling Marketing Campaigns For His Clients. He Provides Location-based Dental Implant Marketing. Attract & Convert More High-value Patients For Dental Implant. He Helps Dentists To Get More Implant Patients In The Chair Who Are Ready To Accept Treatment.