We recently looked at several salary guides that are out in the market, and found many glaring issues. For example, some of them are strictly for “accountants” and overlooks all the CPAs in other finance/accounting related roles. Some are categorized by job title, but as many of you know, a Finance Manager or Financial Analyst can make drastically different amounts based on the company they work for (a SFA at Walmart gets paid a lot more than one at a start-up).
We realized that there was no truly useful salary guide for the CPA community, so we decided to use a more relevant methodology and make one for you! Introducing the first of our yearly CPA Salary Guides. Download it here or read below for our summary.
What is the Best Predictor of Salary?
This should come as no surprise, but the biggest contributing factor to your salary is your years of experience. On average, new graduates expect $45,860, which increases by ~7% each year. However, at around the 10-year mark, compensation becomes less dependent on years of experience as the type of experience becomes more important.
Which Functions Pay the Most?
On average, “Transaction Advisory & Corporate Development” and “Strategy” have the highest salary expectations, while “Audit & Assurance” and “Tax” have the lowest.
These figures are based on CPAs salary expectations, not what they are currently making, which makes sense given advisory and corporate development typically pay more. CPAs also know that you won’t make a lot of money early on at a firm, and that the economic upside comes as you reach partner level. These numbers reflect that.
CPAs’ Changing Interests over Time
“Audit” and “Tax” have the most interest from fresh CPAs, which makes sense given all of the internship and early career opportunities at public accounting firms. However, more experienced CPAs gravitate more towards “Operations”.
We believe this reflects the transition CPAs want to make towards industry and management positions as they progress in their careers.
How Important is Pay?
While pay is a consideration, the most common reason that candidates (60% of them) accept a new job is because it offers a stronger career path. In addition, most CPAs, especially more experienced ones, will accept a lower salary if there is equity compensation. This tendency increases over a CPA’s career, from 66% of CPAs to 82%.
Closing Words
These numbers are averages, and are intended to be used as a point of comparison. There are many other factors that don’t show up numerically, and every company or role is different.
For more details or to understand our methodology, you can download the full report here. If you have any questions, feel free to reach out to Adam Bercovici at adam@luminari.co.
