Are CPAs well compensated?

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  • #187590
    ScarletKnightCPA
    Participant

    Given the recent chatter on the forum regarding salary, what do you guys thing about compensation for CPAs. Are CPAs compensated well given the education requirements? Or do you guys feel that CPAs are underpaid?

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Viewing 15 replies - 1 through 15 (of 34 total)
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  • #585758
    acamp
    Participant

    Insert 273 comments ranging from no, to yes, to it depends.

    Career path has a lot to do with it. A CPA who is a G/L Accountant at a small company might have the same education as a CPA who is the controller of a public company.

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    #585759
    Anonymous
    Inactive

    I know all the partners in my firm have late model Benzes and shore houses. I'd say that's well paid.

    #585760
    mla1169
    Participant

    I'm gonna go out on a limb and predict theres about a $150k range between the lowest paid and highest paid CPA's. Probably one of a handful of careers with such a broad salary range!

    I know I personally am on the lower end but that's just perfect with me! Theres a trade off to be made to get to those $140-$200k jobs and doubling my salary would never be worth sacrificing time with my kids.

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    #585761
    impska
    Member

    I know a few people with Masters degrees in other fields who make far less than I do. There may be a lot of hours for some CPAs, but the truth is that the starting salaries are pretty high compared to other fields.

    Beyond the first couple of years though, your career is definitely in your own hands. There are a lot of different routes to take and it's up to the individual to get the compensation they think they deserve. There is a lot of potential there – but it probably won't just fall into an accountant's lap while they're playing with Excel.

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    #585762
    Anonymous
    Inactive

    There's probably a bigger range than that.

    A second year associate could have a CPA and be making a base of $40k, then you have a national audit practice leader at a Big 4 making over $1M.

    #585763
    mla1169
    Participant

    really the higher ups at B4 make over $1m?

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    #585764
    TNCPA16
    Participant

    Yeah, I agree – career path is an important factor. Take for example 2 people that I work with – both are mid-30s. Both worked in public accounting and both are CPAs. One is the CFO and makes in the $500k range (base salary) and the other is an audit manager making about 15% of that.

    #585765
    Anonymous
    Inactive

    It's all based on experience and location. If you're in the right market, i.e., Chicago, N.Y., etc, $250-300 per hour is not unreasonable for a seasoned professional. At $250/hr and 1,600 hours per year (40 weeks @ 40hrs per week) that is $400K gross. That would give you 12 weeks to spoil your kids on vacation while increasing your salary by 7-10x over a typical beginning wage. No bad loot.

    DM

    #585766
    Anonymous
    Inactive

    mla-

    The more senior (national level) partners do. It's not really as widely disclosed, but from what I hear, there are quite a few partner levels at the big 4. Again, I've heard that the draws are typically something to the order of:

    Years 1-3 $300k+Bonus

    Years 4-5 $500k+Bonus

    Years 5+ Can get well over $1M.

    Years 1-3 are lower because they are typically paying off the buy-in. Sales target bonuses can be substantial. I would imagine these figures vary to some extent by practice area, location, etc.

    #585767
    tomq04
    Participant

    Lots has to do with personality. People persons tend to do better, since increasing business tends to come along with that. Head down grinder folks while appreciated, are not the ones on top nearly as often.

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    #585768
    Anonymous
    Inactive

    Dmende-

    Billings go a lot higher than that in major markets. A lot higher.

    My standard rate is $200/hr and I'm just over three years experience. My bosses standard rate is $375/hr. I've seen him get as high as $950/hr for specialized litigation consulting. I know most good sole practitioners around here get approx. $200-$250/hr. Not too bad when you don't have any overhead.

    #585769
    Anonymous
    Inactive

    Bill, I was thinking about SP's when I wrote those numbers. Not every CPA works or has worked for the Big 4 or even Big 100. As you suggest, there is a lot of work all over for very lucrative fees that will still allow you to have a life – just maybe not in March and April 😉

    DM

    #585770
    005
    Participant

    In the beginning, not really, considering the hours you're working.

    It's when you put in a good 10-15 years that you begin to see a good salary

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    #585771
    Anonymous
    Inactive

    Dmende-

    My firm is actually pretty small. I think we just barely make the top 25 in our market. On the other hand, we happen to be a big player in a few small niches.

    Also- workload isn't too bad in what I do. I don't really have a busy season per se. I work on larger contracts and on some smaller special projects with my boss from time to time. It's pretty easy to manage the workloads on the large contracts. I get popped by the smaller stuff from time to time, though, but not too bad. My boss bounces at 5:30 every day. I'm normally able to shortly afterwords. That small stuff is normally the work with the best rates.

    All in all, I don't think I've ever worked over 60 hrs in a week, but generally bill around 2,300 per year. The Tax department is another story, though. It's pretty small at my firm, but those guys work seven days a week all tax season long. I'd never willingly sign on for that.

    #585772
    Anonymous
    Inactive

    I think some of you need to look at manager's, senior manager's and partner's income figures for Big 4. It's a lot more than you think.

    On top of a base salary of $400,000, partners take home a percentage of the profit. I'm basing this on office locations in the mid-Atlantic.

    New York senior partners and MP's probably pull in over a 1M as well. These guys have law degrees/MBAs as well.

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