Let’s Crunch the Numbers for Certified Public Accountant Salaries
Certified Public Accountant Salaries Will Put You in the Black
We Calculated Certified Public Accountant Salaries Just for You
Certified Public Accountant Salaries Add Up to Awesome
LinkedIn reports there are over 664,000 active Certified Public Accountants (CPAs) in the United States (May 2016). It’s surprising there are not more CPAs considering these
financial professionals consistently experience high wages and steady income growth.
Perhaps there are not more CPAs in the United States because becoming one in the first place is pretty darn tough.
First there is the Bachelor’s Degree in Finance or Accounting, then there is two years of required work experience and graduate level coursework, finally followed by a grueling four
part certification exam.
Let’s not forget, CPAs are also expected to keep up with continuing education credits to maintain their certification. Being a CPA pays well but you must be prepared for the hard work!
You must also be prepared for the level of professional liability involved in such a demanding role. After all, CPAs are responsible for knowing current state and federal regulations, managing highly confidential financial information, and providing rock solid accounting advice.
Errors can be disastrous for clients, as well as damaging for the CPA’s professional life. That’s where CPA Professional (Errors & Omission) Liability Insurance comes into play. CPA Professional Liability Insurance provides a safeguard from disgruntled accounting customers, by helping you defend yourself against a lawsuit. It helps cover your legal and defense costs, as well as any compensation awarded against you.
So now that we’ve touched briefly on the highs (a high salary) and lows (liability claims), let’s take a closer look at what you can expect to earn as a CPA.
The Salary of a Certified Public Accountant
You’ve studied hard and passed your certification exam. Now you can officially become employed as a Certified Public Accountant.
First, you probably want to crunch some numbers and figure out how much income you may expect to earn.
On average, a well-qualified CPA in the United States makes $119,000 per year (Tysiac, September 2017). This does not include bonuses or benefits.
Plus, many CPAs receive annual bonuses averaging as much as 10% of their yearly income. In the case of a seasoned CPA, that could mean a potential $11,900 bonus for doing what you enjoy. Who wouldn’t appreciate such a nice “thank you”?
We did some more digging to find out the various CPA salary levels in relation to experience. Take a look at the figures below:
Entry Level CPA Salary
A CPA just entering the field has reason to be optimistic. Those with less than one year of experience can earn an average CPA starting salary of $66,000 per year (Tysiac, September 2017).
If you are looking for an entry level CPA position, keep an eye out for the following job titles:
Mid-level CPA Salary
A Certified Public Accountant working for the past 3-5 years in their profession is considered a mid-level accountant. CPAs in this category make, on average, about $73,000 annually (Payscale, October 2018).
Bonuses can push up mid-level CPA earnings into the $80,000 range.
If you are looking for a mid-level CPA position, you’ll want to look for the following job titles:
Revenue Cycle Administrator
Contracts & Financial Manager Compliance
Senior Tax Accountant
Assistant Accounts Manager
Accounting Analyst II
Strategic Program Analyst
By this point in their careers, mid-level CPAs typically have advanced to a management level.
Highest Level CPA Salary
The pinnacle of an Accounting career is to obtain an Executive position. Working in the C-Suite is reported to result in an average salary of $163,540 (Payscale, October 2018).
Payscale.com breaks the average CPA Executive salary down even further (October 2018):
Bonus earnings of $20,714
Annual profit Sharing $19,372
$15,000 annual commission
Senior level CPAs work in various roles for Accounting firms and within large organizations. Their responsibilities are quite broad and generally involve overseeing budgeting, policy and procedures, financial planning, and corporate loss issues.
You know you’re a high-level CPA if you have one of the following job titles:
Chief Financial Officer
Accounts Vice President
Director of Cash Management
Senior Accounts Payable Manager
Senior Accounts Receivable Manager
How to Earn Extra 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?
We have a few suggestions that might help you earn a bit more cash. Let’s take a peek at some of those options below.
Get More Certifications
The CPA certification isn’t your only option. If you are looking to increase your earning potential, why not explore other types of certifications?
After all, becoming more specialized in your field will only help to make you more valuable as a professional. As we all know, that usually equates to more money.
Explore one of these popular CPA 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, on 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 CPA Freelancing
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.
If you are interested in making some extra income by taking on freelance projects, here are a few tips:
You are responsible for self-employment tax
You can write off many of your business expenses including the cost of a home office
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 billing cycle.