Average CPA Salaries and Compensation

Average CPA Salaries and Compensation

Talented individuals within accounting and financial services are currently in high demand in business.

But how much do accountants make?

If you have recently passed the CPA exam or are considering taking it, you may be wondering what roles are available to you and what kind of salary and compensation you can expect.

CPA salaries are predicted to rise over the next few years.

Therefore, once you have obtained your qualification, current trends indicate that you can realistically expect a consistent increase in your salary as you advance through your career until you reach the top level.

What Is the CPA Salary?

A CPA is a certified public accountant.

To gain this title, it is necessary to pass the uniform CPA examination set by The American Institute of Certified Public Accounting (AIPCA) and to satisfy your state’s education requirements.

The requirements differ by jurisdiction, and your specific Board of Accountancy can advise further.

However, almost all currently require candidates to have completed 150 semester hours of education (at either bachelor’s or graduate level or a combination).

The exam comprises a four-section, 16-hour assessment, and a score of a minimum of 75 is required on each.

The four parts must be completed within 18 months.

Completing the CPA exam provides a professional qualification that offers a benchmark amongst skilled accounting professionals.

Periodically, CPAs are also expected to sit ethics examinations and commit to further education and training on an ongoing basis.

Although CPAs may offer many of the same services as their non-CPA counterparts, clients will often find the additional certification desirable, as it shows a high level of skill and dedication.

CPA salaries vary from state to state and are usually dependent on experience level and the type of work that you are being paid for.

So, how much do CPAs make?

Simply calculating an average salary for a CPA in the US might not reflect the actual amount you can expect to earn, particularly as a new graduate.

The CPA average salary is currently $68,491

However, this considers entry-level wages right up to, sometimes, six-figure executive management salaries.

Instead of focusing on the average wage, consider the upper and lower salary levels available to you, how these can vary in different areas or niches, and the other benefits that may increase your CPA salary.

As with many careers, CPA salaries rise with experience.

  • An entry-level CPA can expect to earn between 40,000and40,000 and 60,000
  • A senior-level CPA could be earning up to $110,000 once they have five years of relevant experience

It is not uncommon for executives in this field to command six-figure salaries.

Average Pay For CPAs by Experience Level

  • Entry level CPA (1 year) – $54,286 (this is a CPA starting salary, based on 131 reported salaries)
  • Early career CPA (1–4 years) – $59, 482 (based on 1,264 salaries)
  • Mid-career CPA (5–9 years) – $71,252 (based on 1,060 salaries)
  • Experienced CPA (10–19 years) – $83,187 (based on 807 salaries)
  • Late career (20+ years) – $96,147

The above reflects average annual compensation for CPAs by experience level and includes base salary, tips, bonuses and overtime pay.

Source: payscale.com

What Job Roles/Career Progression Is Available?

CPAs can choose from a range of career paths, from working for a small, independent accounting business to a global corporation or a non-profit organization.

You will usually start in a lower-paid role as an inexperienced CPA, while you gain the skills and experience you require to be considered for a higher-paying job, then you will be able to progress to management level and beyond.

The opportunities for CPAs are diverse; therefore, there is scope to look around and find a job appropriate for your skills and your particular areas of interest.

Financial Services

With the increased use of technology to perform tasks that may have traditionally been outsourced to an accountancy firm, some CPAs diversify their offerings to their clients to include financial services.

Companies are also recruiting professional CPAs to handle reporting and compliance or use their expertise in risk management and credit analysis.

Public Accounting

There are currently 46,000 public accounting firms within the US.

These range from small accounting practices that serve local businesses to international CPA firms that employ thousands of people.

We talked about the certified public accountant salary above.

Within public accounting, a CPA will serve multiple clients as an outsider in an advisory capacity.

The positions available will vary from tax/auditing staff and consultants with one to three years of experience, to senior-level auditors and consultants with three to six years of experience, up to management, with the coveted Partner Level at the top.

It is estimated that only 2% of employees who enter CPA firms can achieve this status.

Corporate Accounting

CPAs that work in corporate accounting can find work in a variety of settings, from tiny enterprises to large corporations.

After three to six years, you could be detailing cost analysis and preparing reports under supervision and working your way up to senior management in accounting, tax or auditing.

CPAs in Non-Profit

Whether you work in a non-profit organisation as an advisor or as a staff member, you will be expected to provide tax solutions, budget advice and prepare quantitative data for fundraising.

The availability of in-house positions will vary depending on the size of the not-for-profit organization.

However, the types of job roles on offer might include internal auditor, financial accounting or reporting staff, treasurer and Chief Financial Officer (CFO).

There will also be positions available on the audit committee, including Committee Chair and committee member.

Government CPAs

CPAs working in government, like those in other industries, will be responsible for financial reporting, auditing and management accounting.

In Federal Government, CPAs are necessary within the FBI, IRS and the Department of the Treasury and General Accounting Office.

Average CPA Salaries and Compensation 2021
Average CPA Salaries and Compensation 2021

They could be requested to investigate white-collar crimes and gather evidence for court, to provide expert testimony on pending tax legislation, to manage audits or financial statements for government agencies, or to perform financial research/analysis to solve management issues.

A CPA will be required to perform audits in finance, compliance and performance in local or state government.

This could be to assess the efficacy of the worker’s compensation system or to evaluate the continued viability of organizations such as a prison or school district.

Some of the main areas CPAs will work in within the different industries outlined above are:

  • Audits/reviews – This is the process of auditing a company's financial records for accuracy. CPAs are specifically certified to perform audits. The Auditing and Attestation CPA Exam is a section of the CPA exam dedicated to auditing (AUD). It assesses not only knowledge in this area, but also the candidate's ethical understanding of the AIPCA Code of Professional Conduct.

  • Forensic accounting – A specialized area of auditing where CPAs often scrutinize and assess accounts, legal and financial documents, investigate discrepancies, fraud or misrepresentations, or work within fraud prevention.

  • Consulting services – PCAs advise businesses on their accounting systems and assist them with financial decisions, providing evaluations and forecasts.

  • Taxation services – CPAs assist clients in preparing tax documents or tax returns, and advise on available tax strategies.

  • Financial planning – CPAs can advise on asset planning, retirement, risk management or making investments.

The skill set of a CPA can affect their salary. Some of the most popular skills within accounting and the percentage they can add to an average annual salary are:

  • Mergers and acquisitions (+50%)
  • Consulting management (+31%)
  • Project management (+21%)
  • Financial compliance (+11%)

Skilled CPAs with strategic thinking will be able to identify a niche in which they have a specific level of interest and expertise, learn the skills required to succeed within this niche, and ensure they are always maximising their potential and earnings.

What Else Can Affect CPA Salary?

  • Location – CPA salaries vary from state to state, with Florida, New York and New Jersey ranking as some of the states with the highest mean wages for accountants. Some of the lowest salaries for this type of work can be found in Texas and Illinois.

  • Experience – CPAs with one to three years of experience are typically regarded as entry-level employees. CPAs with five to nine years of experience can realistically expect significant wage increases, with the average wage for mid-level CPAs currently sitting at $71,000.

  • Company size – Typically, larger companies can pay more to talented individuals as they usually have a higher annual turnover and increased access to resources than small firms.

  • Industry – The job roles open to CPAs are varied, and they do not all necessarily get paid the same. A tax accountant, for example, may earn a very different amount from an auditor. There are also wage disparities between the public and private sectors. A CPA working for a non-profit organisation will most likely earn less than their peers in corporate accounting.

  • Skills – CPAs will all have unique skills and interests. The specific niche in which a CPA prefers to work can have an impact on the salary received. CPAs with skills such as tax consulting, tax compliance and financial reporting earn significantly more than the average. Tax preparation, for example, is known for paying less than the market rate. Possessing a specialism, such as forensic accounting, can command a higher wage, especially if you can find work in a federal agency.

Of the big, well-known accounting firms in the US that the majority of CPAs might dream to have on their resume, Deloitte & Touche LLP are reported to pay the most, with their average pay being $76,535.

Clifton Larson Allen and EY (Ernest and Young) are close behind, offering 74,250and74,250 and 72,997, respectively, and KPMG currently pays the lowest at $58,089.

What Other Compensation Is There?

In addition to a base salary, which is usually higher than the national average wage, CPAs might receive health benefits including medical, dental and vision, bonuses, profit shares and commission.

Larger companies may be able to offer better benefits packages than small enterprises.

Some benefits, such as bonuses, are performance-based; therefore, the more successful you are in your role, the more you are potentially able to earn.

Because talented CPAs' skills and abilities are in high demand, it is critical to consider which job is the best fit for you and whether there is the possibility for wage negotiation.

CPAs are naturally adept with numbers; therefore, use these skills to calculate your expected wage and factor in any benefits, insurances, etc., in addition to anything else that might make a job seem particularly viable, such as the value of possessing a renowned company’s name on your resume.

Final Thoughts

According to the accountants’ salary guide, CPAs can earn around 10% more than their non-CPA peers who work in accounting and are also considered to be more employable as they have shown their expertise and dedication by becoming certified.

Talented individuals in accounting and finance are in high demand, and despite the initial cost and sacrifices, those who choose to take the CPA examinations are likely to see it pay off throughout their careers.

You should always research potential employers, including their culture, any benefits they provide, and whether your wage expectations are in line with their salary package.

Keep in mind that being a CPA puts you within accounting’s elite and, as such, increases your market value and employability.

You will be considered a valuable asset to any employer or client once you possess this well-respected credential and have gained appropriate experience within your niche, and you should be recognised and compensated accordingly.

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