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Five key financial considerations for dental grads

Five key financial considerations for dental grads

6 Minute Read

As new dental graduates embark on their careers, equipping them with financial knowledge sets them up for success. This article touches on five financial considerations:

  • Proactive tax planning
  • Income and expense tracking
  • Money management and debt repayment
  • Understanding your associate agreement
  • Relocation
Partner, Professional Services
Partner, Professionals Services

Proactive tax planning1. Proactive tax planning

As a new dentist, the last thing you want is to be blindsided by a hefty tax bill. That’s why tax planning is essential to your financial well-being. A reasonable understanding of how the tax system works, and how to pay your taxes from the start, will help make tax season a little less daunting.

In your first year after graduation, you’ll likely have tuition credits still available to help offset some — if not all — of the tax you owe, which can provide you with some relief. However, these credits do not offset the CPP contributions you’ll be required to make as a self-employed dentist. This could be as much as $8,111, based on 2024 rates.

Additionally, be aware of the payment and filing deadlines. As a self-employed dentist, you will not be required to file your personal tax return until June 15. However, any balance owing will be due April 30. 

By working with an accountant, you can project upcoming tax obligations, mitigate any surprises, determine whether there are ways to defer tax, and plan for the year ahead.

Track your income and expenses 2. Track your income and expenses

In the whirlwind of dental school, financial literacy may not have been part of the curriculum. By proactively planning, you can take control of your finances. Keeping accurate records of your income and expenses is the first step in doing this.

To help you succeed, come up with a system that works. Whether you prefer pen and paper, a spreadsheet, or an app — find a method that you can stick with.

It will become important to keep your dental practice income and expenses separate from your personal day-to-day banking. One easy solution is to open a bank account just for depositing your dental income and paying all your business-related expenses. You may also find a separate credit card to be helpful. Having these accounts separate will make keeping track of income and expenses a lot easier when tax time comes around.

As a new graduate, you may not be aware of the expenses you can deduct from your income to help reduce your taxes. Some of the more common expenses you will have include professional fees and membership dues, conference fees and travel, and equipment or supply purchases.

Reach out to your advisor for more helpful tips and tools.

Money management and debt repayment 3. Money management and debt repayment

Let’s address the elephant in the room: student loans.

For many new dental graduates, student debt may feel overwhelming. But you can take steps forward by creating a realistic budget that includes loan payments, living expenses, and savings goals.

You may want to consider seeking guidance from a financial professional. These advisors can help you create a personalized budget, as well as develop a repayment plan and money management strategy that aligns with your unique goals.

Don’t ignore your debt — tackle it strategically.

Relocation 4. Relocation

Relocating for your first professional job marks the beginning of a new chapter in your life. Beyond the thrill of exploring a new area, or rediscovering your hometown after graduating, it’s essential to leverage any tax benefits available to you through eligible moving expenses.

Individuals can deduct moving expenses if the move meets specific criteria. The relocation must be for the purpose of work or running a business, and the new home must be at least 40 kilometers closer to this new work/business location.  

While chasing your dreams, remember to keep track of expenses incurred during the relocation process. This includes the cost to move or store your household items, travel costs, temporary lodging and meals, as well as fees associated with changing your address on legal documents.

Additionally, there will be other incidental costs that may be eligible. And if you are selling a home at your old location, there are even more costs that may qualify, like realtor commissions and property transfer taxes.

These expenses may be tax deductible, so holding on to receipts and other documentation may be key for potential tax savings down the road.

Understand your associate agreement 5. Understand your associate agreement

As a new graduate, you likely can’t wait to accept and sign your first associate contact. But before you sign on the dotted line, there are a few things you should understand.

As a dental associate, you can expect to be paid monthly, based on the prior month’s production. A typical contract includes a percentage of your production, less laboratory fees.

It’s important to be aware that income tax, CPP, and EI will not be withheld from these monthly payments.  Instead, you’ll be responsible for paying the income tax and CPP when you file your personal income tax return for the year. While there is an optional EI coverage that you could opt into, it is important to discuss the implications with an advisor, as the EI coverage is very limited and would not be beneficial for most people.

Most importantly, review the agreement before signing and don’t be afraid to ask clarifying questions or to negotiate. And always get the agreement in writing — this will help mitigate any disagreement on how your compensation will be calculated and when you will get paid.  

Our advisors can set you up to succeed

Embarking on your career as a dental graduate is a milestone filled with opportunity and challenges. By seeking help from an accountant as your trusted advisor early on, you can proactively manage your money, your student debt, and plan for tax season. Investing in your financial well-being is an investment in your future success.

Contact us

Our team can help you navigate the financial landscape with confidence so you can enjoy a fulfilling career in dentistry. To learn more about how we can help you, reach out today.

Traci Pogson CPA, CA

Partner, Professional Services


[email protected]

Michael Furnell CPA, CA

Partner, Professionals Services


[email protected]


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