The True Earning Potential of Dentists

How much money do dental practices owners make? SO MUCH more than just a salary.

Understanding the Real Earnings of Dentists

If you've ever researched how much dentists make, you’ve likely come across figures from the Bureau of Labor Statistics (BLS), Indeed, and Glassdoor. According to these sources, the average annual salary for a dentist ranges from $170,000 to $286,000. On the surface, these numbers seem appealing, but they only tell part of the story.

What many fail to realize is that these figures don’t account for the full financial picture. Dentists have multiple streams of income beyond salary, and those who maximize their opportunities are earning significantly more than the reported averages. Today, we'll explore the three key ways dentists generate income: salary or production-based earnings, business ownership, and equity, to reveal the true earning potential in the dental profession.

While these numbers paint a positive picture, they reflect the earnings of associate dentists—those who are employed by a dental practice, but do not own one. What’s missing is the wealth-building potential of dentists who own their practices and invest in other financial opportunities.

The Three Core Sources of Dentist Income

1. Salary or Percentage of Production

For dentists working as employees, salary is often the most straightforward form of compensation. However, many dentists are not compensated through a fixed salary alone. Instead, they are often paid based on a percentage of the revenue they generate, known as production-based pay.

Dentists who work under this model typically receive 30% to 35% of their production. This creates a direct relationship between their efforts and their earnings, offering the potential for higher pay than a flat salary. While this model rewards hard work, it still only represents the earnings of a non-owner.

2. Business Income from Practice Ownership

The real financial benefits of dentistry come when dentists transition from being employees to practice owners. Ownership transforms a dentist's role from worker to entrepreneur. In this model, a dentist retains 35% to 50% of the revenue generated by all the services provided within their practice—not just their own.

As a practice owner, a dentist earns income from every procedure performed, including those completed by hygienists, assistants, and even other dentists employed in the practice. This allows for significantly higher earnings potential compared to employees who only earn based on their individual production.

For example, consider a practice generating $1,000,000 in annual revenue with an overhead of 60%. The owner dentist retains 40% of the revenue—$400,000 annually—double what an average employee dentist makes. This is just one part of the picture, though. Ownership also provides access to equity, a crucial component of long-term wealth.

3. Building Equity: The Wealth of Practice Ownership and Real Estate

Equity is one of the most overlooked aspects of a dentist's financial potential. When a dentist owns a practice, they’re not just making a living from day-to-day operations. They are building a valuable asset that can be sold when they choose to retire or move on to another venture. Dental practices often sell for hundreds of thousands to millions of dollars, depending on their size, patient base, and profitability.

In addition to the value of the practice itself, many dentists own the building in which their practice operates. Over time, this real estate can appreciate significantly, providing another avenue for wealth. Upon selling both the practice and the property, a dentist can earn a substantial return that far exceeds the income of a salaried employee.

To illustrate, let’s assume a practice is sold after 15 years for $1,000,000. That adds about $66,000 per year in equity on top of the dentist’s annual income. If the dentist also owns the building and sells it for $1,500,000, with $1,000,000 in profit after paying off the mortgage, they add another $66,000 annually. In total, a practice-owning dentist could be earning over $530,000 annually—far more than the typical employee dentist’s salary.

The True Earning Power of Dentists

When considering the full scope of earning potential—salary or production-based income, business income from practice ownership, and equity from both the practice and real estate—it becomes clear that dentists who own their practice can significantly out-earn those who remain as employees.

For many, the journey to practice ownership can more than double their income and build wealth that will benefit them for years to come. Ownership is a key differentiator in maximizing earnings, offering both short-term rewards through business income and long-term gains through equity.

Beyond the Salary—Dentistry as a Path to Wealth

So, how much do dentists really make? While an associate dentist can earn a comfortable living, the real financial rewards come from owning a practice. By leveraging salary or production-based income, business profits, and equity in both the practice and real estate, dentist-owners can far exceed the average salary figures reported online.

If you're a dentist considering practice ownership, the financial benefits are clear: practice ownership offers the potential for significantly higher income and the opportunity to build lasting wealth. For those ready to take the next step, my book provides a guide to buying your first dental practice. Visit my website for more information, and start taking control of your financial future today.

Ready to transition from employee to owner? Check out my book on dental practice ownership, where I walk you through the steps of buying your first practice. Stop leaving money on the table—take charge of your career and financial future by becoming a practice owner today.