Practice Overhead Calculator

Overhead rate from expenses and collections.

Inputs

Monthly collections ($)

Staff salaries & benefits ($)

Rent & utilities ($)

Supplies & drugs ($)

Billing & collections ($)

IT & EHR costs ($)

Insurance & legal ($)

Admin & miscellaneous ($)

Number of providers

Tab to move between fields

Results

Overhead rate

58%

Monthly net income

$84,000.00

≈ 8 years of state college

Total monthly overhead$116,000.00

Annual overhead$1,392,000.00

Net income per provider (annual)$336,000.00

Staff cost % of revenue30%

Annual overhead per provider$464,000.00

Excess overhead vs benchmark$0.00

Monthly break-even collections$116,000.00

Operating margin42%

Facility (%) Of Revenue7.5%

Supplies (%) Of Revenue6%

Billing (%) Of Revenue5%

How to Use This Calculator

Enter Monthly collections (net cash received) as the revenue baseline — do not use gross charges.
Input each expense category: Staff salaries & benefits, Rent & utilities, Supplies & drugs, Billing & collections, IT & EHR, Insurance & legal, and Admin & miscellaneous.
Enter Number of providers to calculate per-provider metrics for benchmarking against MGMA data.
Review Overhead rate — primary care benchmark is 60%; rates above this indicate areas needing cost reduction.
Check Staff cost % of revenue (target 25–35%) and break down which expense categories are out of line.
Use Monthly net income and Break-even collections to set minimum revenue targets for financial sustainability.

How the result changes with Monthly collections ($)

Monthly collections ($)	Overhead rate	Monthly net income
1,000,900	11.6%	$884,900.00
3,500,650	3.3%	$3,384,650.00
6,500,350	1.8%	$6,384,350.00
9,000,100	1.3%	$8,884,100.00

What each input means

Monthly collections ($): Total monthly net collections (actual cash received) from all sources.
Staff salaries & benefits ($): Monthly total for non-provider staff wages, benefits, payroll taxes.
Rent & utilities ($): Monthly facility costs including rent, utilities, maintenance.
Supplies & drugs ($): Monthly medical supplies, pharmaceuticals, lab consumables.
Billing & collections ($): Monthly billing service fees or in-house billing department cost.
IT & EHR costs ($): Monthly EHR subscription, IT support, hardware, telehealth platform.
Insurance & legal ($): Monthly malpractice, general liability, legal retainer.
Admin & miscellaneous ($): Marketing, professional development, subscriptions, office supplies.
Number of providers: Total physicians and APPs generating revenue.

What each result means

Overhead rate: Total operating expenses as % of collections. Primary care benchmark: 60%.
Total monthly overhead: Sum of all monthly operating expenses.
Annual overhead: Yearly total operating expenses.
Monthly net income: Collections minus overhead (available for provider compensation).
Net income per provider (annual): Annual net income allocated equally per provider.
Staff cost % of revenue: Staff salaries as percentage of collections. Target: 25-35%.
Annual overhead per provider: Operating expenses allocated per provider.
Excess overhead vs benchmark: Annual dollars over the 60% primary care benchmark. $0 if at or below.
Monthly break-even collections: Minimum monthly collections needed to cover overhead.
Operating margin: Net income as percentage of collections.

How this is calculated

Worked example, using the default values

Identify Input Parameters
4 parameters
Monthly collections ($) = 200000, Staff salaries & benefits ($) = 60000, Rent & utilities ($) = 15000, Supplies & drugs ($) = 12000 = 9 input(s) provided
Calculate Overhead rate
Overhead rate = (totalMonthlyOverhead / monthlyCollections) * 100
58 = 58%
Calculate Monthly net income
Monthly net income = monthlyCollections - totalMonthlyOverhead
84000 = $84,000
Calculate Total monthly overhead
Total monthly overhead = staffSalariesBenefits + rentUtilities + suppliesAndDrugs +
116000 = $116,000
Calculate Annual overhead
Annual overhead = totalMonthlyOverhead * 12
1392000 = $1,392,000

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