Certified Public Accountant (CPA) are the most in-demand accounting and finance professionals in any industry. There is a good reason why this is the case. CPAs have a versatile skill set that gives them unique experience across all aspects of business from tax planning and accounting to managing operations and running the company.
The AICPA states that CPAs make, on average, 15% more than non-certified accountants. This typically totals to more than $1M over the course of their careers! That’s impressive. In 2023, GlassDoor reported that CPAs earn on average $72,149 per year in the US.
In this article, we will delve into the various factors that influence a CPA’s salary and explore the potential earnings one can expect in this prestigious field.
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Factors Influencing CPA Salaries
There are several factors that affect how much CPAs earn throughout their careers. The main factors being experience, location, industry, education, and firm/company size.
Let’s look at each to see how they might affect your CPA salary.
Experience
Like many professions, experience plays a crucial role in determining a CPA’s salary. Entry-level CPAs can expect to earn less than their more experienced counterparts. However, as one gains experience and builds a reputation in the industry, their earning potential significantly increases.
Geographical Location
The cost of living and demand for CPAs in different regions influence salary ranges. CPAs in major metropolitan areas like New York City or San Francisco typically earn higher salaries to compensate for the higher cost of living. Conversely, CPAs in smaller cities or rural areas might earn less, but they also typically have a lower cost of living.
Industry
The industry in which a CPA works also affects their salary. CPAs working in finance and insurance tend to earn higher salaries, while those working in government or education may earn less. However, these lower-paying industries often offer other benefits such as job stability and more generous pension plans.
Education and Specialization
CPAs with advanced degrees or certifications in specialized areas of accounting tend to earn more. Specializations such as forensic accounting, tax, or audit can lead to higher salaries and more job opportunities.
Firm Size
The size of the accounting firm or company can also influence a CPA’s earnings. CPAs working in large, multinational firms generally earn higher salaries than those working in smaller firms or in solo practices.
CPA Earnings by Experience Level
Entry-Level: New CPAs or those with less than one year of experience can expect to earn between $45,000 and $68,000 per year.
Early Career (1-4 years): With a few years of experience, CPAs can expect to earn between $50,000 and $75,000 per year.
Mid-Career (5-9 years): Mid-career CPAs can expect to earn between $60,000 and $90,000 per year, depending on their specialization and the industry in which they work.
Experienced (10-19 years): Experienced CPAs can earn between $70,000 and $120,000 per year, with potential for even higher earnings as they move into senior management roles.
Late Career (20+ years): In the later stages of their career, CPAs can earn upwards of $80,000 to $150,000 or more, especially if they hold executive-level positions.
CPA Salary Variations by Industry and Specialization
Public Accounting: CPAs in public accounting firms can earn between $50,000 and $120,000, with partners in large firms earning significantly more.
Corporate Accounting: Corporate accountants can expect salaries in the range of $50,000 to $100,000, with higher earnings for managerial roles.
Government: Government CPAs can earn between $50,000 and $90,000, with federal positions typically paying more than state or local government roles.
Nonprofit: CPAs in the nonprofit sector can expect to earn between $45,000 and $80,000, depending on the size and budget of the organization.
Education: CPAs working in education, especially in administrative roles, can earn between $50,000 and $90,000.
Conclusion
A career as a CPA offers significant financial rewards, stability, and opportunities for advancement. While salaries vary based on experience, location, industry, and other factors, CPAs generally enjoy competitive salaries and a strong job market.
Investing in additional education and certifications, and choosing a specialization, can further enhance a CPA’s earning potential. With the right strategy, a career as a CPA can be both professionally fulfilling and financially rewarding.
Frequently Asked Questions
How does obtaining a CPA license impact my earning potential?
Obtaining a CPA license can significantly increase your earning potential, as it opens up more job opportunities and demonstrates a higher level of expertise and commitment to the profession.
Do CPAs in public accounting earn more than those in industry?
While CPAs in public accounting can earn high salaries, especially as they move into partnership roles, CPAs in industry also have the potential for high earnings, particularly in senior management and executive positions.
What is the average starting salary for a CPA?
The average starting salary for a CPA varies based on location and industry, but it typically ranges from $45,000 to $68,000 per year.
How does location affect a CPA’s salary?
Location significantly affects a CPA’s salary, with CPAs in major metropolitan areas typically earning higher salaries to compensate for the higher cost of living, while those in smaller cities or rural areas may earn less.