One area in running a dental office that often gets overlooked (until it becomes a real headache) is payroll.
Paying your team on time is just one aspect. Dental practice owners also have to deal with compliance regulations, managing withholdings, and complex compensation structures in a clinical setting.
Unfortunately, there are common problems surrounding dental payroll that many practices encounter. These payroll mistakes can cost you time, money, and even team trust.
Below, we break down some of the most common dental payroll mistakes and how to avoid them.
Misclassifying Employees and Independent Contractors
Dental offices often hire part-time hygienists, temporary front desk staff, or specialists who work across multiple locations. The problem? Many practice owners incorrectly classify these workers as independent contractors when they should be employees.
This is one of the most common dental payroll challenges, and it’s a serious one. Misclassification can lead to IRS penalties, unpaid payroll taxes, and even lawsuits. Always verify classification rules and consult a dental-specific accountant to get it right.
Ignoring State-Specific Payroll Laws
Each state has different rules regarding payday frequency, final paychecks, wage deductions, and even sick time accrual. For example, what’s legal in one state may get you into trouble in another.
Dental practices that operate in multiple locations or hire remote admin staff from other states are at the highest risk. You must consider state-specific rules, as overlooking them may cause legal and financial issues.
Not Integrating Payroll with Benefits and Tax Planning
Payroll includes employee benefits, retirement contributions, workers’ comp, and tax planning. Practices that treat payroll as a siloed function miss out on big-picture opportunities. With the right approach, you can reduce taxable income through properly structured benefits or identifying patterns in labor costs.
Without the guidance of experienced dental accountants, practices risk overpaying taxes or offering benefit plans that are inefficient or misaligned with payroll.
Relying on Generic Payroll Services
Many dental offices use general payroll providers that don’t specialize in dental-specific needs. These services may not understand how to handle associate dentist compensation models, profit-sharing plans, or the proper way to allocate wages in multi-owner practices.
This is one of the less obvious yet very real dental payroll mistakes that can cost your practice money and compliance.
Choose Davis & Cole for Dental Payroll and Accounting
At Davis & Cole CPA, we know the dental industry inside and out. Our team of expert dental accountants understands the intricate relationship between payroll, taxes, and the day-to-day operations of your practice. We offer customized strategies designed to keep your team happy and your finances rock-solid.
Stop letting payroll mistakes drain your time and resources. Book a consultation with Davis & Cole today and get the expert guidance your practice deserves.
