Are you interested in a career as a Certified Public Accountant (CPA)? If you are considering a career as a CPA, there are sure to be many questions and things that you have been researching to get a better understanding of the role and industry.
One of the things you may be wondering about is how much do certified public accountants earn on average? Maybe you want to know what entry-level CPAs make each year? Or maybe you’re looking at the long view and thinking about higher levels, consultants and freelance accountants?
One thing that is for certain is that becoming a Certified Public Accountant is not easy. It requires a college education as well as earning a license. There is also the matter of work experience and continuing education. So, what kind of a CPA expect to earn on an average salary?
Turns out it’s all good news. Salary estimates for CPAs show consistently high wages, wage growth, and increasing bonuses.
CPAs are Happy with their Salaries
As far as careers go, a Certified Public Accountant may have more to be happy about than most. According to a survey by the Association of International Certified Professional Accountants:
- Two-thirds of accountants are happy with their salary
- And four-fifths of those expect to be earning even more next year
Eighty-one percent of CPAs interviewed said they expected to earn a pay increase at some point during the upcoming 12 months, and the increase was expected to be about 5 percent of their annual salary.
The study also shows a trend in CPA accountant salary compensation that continues to inch upward – highlighting a career in high demand within the United States.
While the United States job market has largely bounced back with record low unemployment statistics, some professions have been bogged down by stagnant wages which is fortunately not so with Accounting professionals.
Not only are CPAs looking forward to a wage increase in the upcoming 12 months, but many have also already received a salary increase in the previous 12 months. The average salary increase previously was 4 percent, according to the study.
The Salary of a Certified Public Accountant
Accounting is a well-paid profession to begin with. Notwithstanding salary growth, the CPA annual salary of a well-qualified CPA in the United States is $119,000 not including bonuses. Here we will give you a brief idea about the salary for accountants in different levels.
Entry Level CPA Salary
A CPA just entering the field has reason to be optimistic as well. Those with less than one year of experience can earn an average CPA starting salary of $66,000 per year. The most qualified CPAs – those with more than 20 years of experience can expect an average salary of $152,000 per year.
Midlevel Accountant Pay
A mid-level career Certified Public Accountant salary can be somewhere around $73,000 in annual salary – a comfortable living most would agree.
However, bonuses can push up their earnings into the $80,000 range. The survey also cited that 59 percent of CPAs work for companies that award annual bonus – with the average bonus amount landing somewhere around 10 percent of their salary.
CPA Partner Income
A partner position in a CPA firm is the pinnacle of an Accounting career. According to Payscale.com, the average salary for a partner in an accounting firm is $159,305.
However, there is potential for a CPA Partner salary to hover around $320,000 depending on the size of the firm and where it is located.
Payscale.com breaks the average partner in an Accounting firm salary down further:
- Bonus earnings of $20,714
- Annual profit Sharing $19,372
- $15,000 annual commission
CPA partner income doesn’t come without hard work. Partners are responsible for all the activities of the firm. They establish policies and procedures and ensure they are followed.
They must manage managerial staff and conduct performance reviews. They also may be responsible for overseeing operations in other offices and may be required to travel.
How to Earn More Money as a CPA
So, if you’re not quite ready for partner or the C-suite, how can you earn more money as a CPA? As a CPA there are many career choices and paths. If you have earned a CPA license, you are most likely interested in climbing a career path to more earnings.
Join One of the Big Four
Many Accounting positions are filled only by those with a CPA license including:
- Management positions
- Upper-level finance positions
- Supervisory and executive positions
Another way to earn top dollar as a CPA is to land a job at one of the “Big Four.” The Big Four refers to the four largest Accounting firms in the United States, Namely:
- Ernst & Young
These firms are repeatedly named among the top 100 employers in the country. They offer tax and management consulting. They also conduct market research, dispense legal advice and practice assurance and valuation.
No matter your specific interest in the field there is sure to be a place among the Big Four – if you can get your foot in the door. They recruit heavily on college campuses and have extensive training programs.
Earn a Master’s Degree
Earning a Master’s Degree can increase your earning potential in any field – including Accounting. Accounting students have choices when it comes to earning a Master’s Degree. A Master’s Degree in Accounting will on average earn higher salaries than a professional without one. But there are considerations:
- The extra tuition spent on earning the degree
- The time spent earning the degree instead of working
Earning a Master’s Degree in Accounting can increase your earning potential including your starting salary. It can also set you up for greater earnings throughout your career.
Get More Certifications
The CPA certification isn’t your only option. If you are looking to increase your earning potential, why not explore other certifications?
Here is an overview of some of the most popular accounting certifications:
- Certified Financial Analyst (CFA) A CFA focuses on Investment and Finance. This is a great certification to have under your belt if you want to earn top dollar in an investment firm, Wall Street or in a hedge fund firm.
- Certified Management Accountant (CMA) A CMA certification should be in your wheelhouse if you are looking at top management or executive positions. It indicates a specialty in Management. Management training isn’t something you get as an Accounting major, so this certification can help you earn more and stand out if you’re interested in a Management career.
- Enrolled Agent Certification (EA) An EA certification is for tax loving Accountants. It is a designation created by the IRS that demonstrates expertise in the tax code. The EA is a nice certificate to have if you enjoy tax work and don’t have a CPA. It allows you to do things such as represent clients to the IRS and sign tax forms. However, most employers will want you to have a CPA certification anyway.
- Certified Internal Auditor (CIA) A CIA certification only makes sense if you are an Audit or Compliance Officer. Someone with a CIA certification typically works within a large company carrying out Audit procedures and assisting Auditors.
Do Some Freelancing on the Side
If you are interested in making some extra money on the side as an Accountant, it’s never been easier. The gig economy makes it simple to pick up side jobs without having to do any marketing. There are many applications today that connect freelancers with employers.
As a CPA you may find it easy to pick up extra work during tax season. Helping individuals and companies prepare their taxes can turn into a lucrative freelance income. You may even consider working evenings or weekends for a tax preparation service during the tax season.
Accounting professionals can make great extra income as a freelancer. It takes some discipline and dedication but carries a great reward. If you are picking up freelance work in addition to full-time employment, just make sure that it’s okay with your employer. You don’t want to run into a conflict of interest.
If you are interested in making some extra income by taking on some freelance work, here are a few tips:
- Most of your income will be made during the tax season
- You are responsible for self-employment tax
- You can write off many of your business expenses including the cost of a home office
- You can feel good knowing you are providing a great and much-needed service to small businesses
- Target small business by offering package deals that will give them several Accounting services for a flat fee. This helps small businesses manage their Accounting expenses without getting tied into an hourly bulling cycle where they can’t project their costs
Protecting your salary with CPA Professional Insurance
CPA salaries are some of the best in the business world. Entry level salaries are fair and earning potential can be unlimited. There are many great career paths for CPAs – you can focus on management, executive positions, tax preparation or internal company auditing.
Whatever path you choose for your Accounting career, make sure you are protected with proper Accounting Professional insurance. If you work for a firm, their insurance will most likely cover you, but if you are working on your own you will need to consider cover for yourself. Accountants at all levels face professional risks. Protect yourself with Accountant insurance today.