Certified Public Accountants are one of the most in-demand career choices. Almost every industry requires CPAs and auditors to keep their accounts smoothly working. According to the AICPA survey, a beginner CPA with less than one year of work experience usually earns an average of $66,000 annually.
In this article, we will be discussing Certified Public Accountant under the following headings:
- What are the job responsibilities of a CPA?
- What are the requirements for being a CPA?
- Factors affecting a CPA salary schedule
- Accountant and CPA salaries
- Frequently asked questions
- Is a CPA license worth it?
What are the job responsibilities of a Certified Public Accountant?
A CPA has to look after taxes, accounting, reporting, and auditing for the government or corporate sectors. It is mostly computer-based work in an office. They mostly work long hours during tax season. A CPA can be related to various sectors such as small or large accounting companies, non-profit organizations, or government agencies. A Certified Public Accountant can specialize in various fields. For instance- financial planning, taxes, auditing, valuation, and many more.
What are Requirements for being a Certified public accountant?
- A bachelor’s degree in business administration
- Four-section CPA exam conducted by the American Institute of Certified of public accountants (AICPA).
- License depending on which state you are planning to work in.
However, multiple factors affect the salary schedule of a CPA. Let’s have a look at each of these factors.
Factors Affecting CPA Salary Schedule:
The following are the major factors affecting the salary of CPA-
- Experience – The amount of experience of a CPA plays a crucial role in determining the salary package of a CPA in any industry. The more you gain experience working in any industry, the better your salary and compensation will be. As in every other industry, there is a huge gap between entry-level, beginners, and experienced CPAs.
- Size of the organization – Another essential factor in determining CPA’s salary package is the organization’s size or firm. When the size of an organization is large, there is an increased salary package offered to the CPAs.
- Jobs and Industries – There is a wide range of jobs and industries where CPAs must work. Some of them are corporate accounting, financial services, and public accounting. CPAs work as auditions tax experts, accountants, and assurance professionals. Both public and corporate accounting sectors offer a wide range of salaries based upon the jobs mentioned above. An auditor working in the same organization has a completely different salary package and compensation than an assurance professional.
- Skills – Some useful skills can cause an appreciable hike in CPA salaries. Take a look at the following table:
| SKILLS | HIKE IN SALARY (%) |
| Due Diligence | ▲48% |
| Mergers and Acquisitions | ▲50% |
| Valuation | ▲46% |
| Banking | ▲39% |
| Consulting Management | ▲32% |
| Project Management | ▲21% |
| Month-End Close | ▲16% |
| Accounts Receivable | ▲10% |
| Budgeting | ▲14% |
| Financial Modeling | ▲15% |
- Geography
The last but not the least factor determining the salary package of Certified Public Accountants is the state where a person works. The salaries of CPAs vary from one state to the other. For auditors and accountants, there are a large number of job opportunities in California. Similarly, in New York (17.3%), an entry-level CPA gets more paid than Boise, ID. Below is the breakdown of the CPA salaries in the various states:
| STATE | ANNUAL MEAN WAGE |
| California | $83,540 |
| Texas | $81,330 |
| New York | $95,430 |
| Florida | $70,050 |
| Pennsylvania | $74,730 |
Which state pays the highest in the country?
- Well, the District of Columbia pays $96,880 annually on average.
- New York, paying annually $95,430, follows the footsteps of Columbia.
- New Jersey ($91,400), Virginia ($84,740) and California ($83,540) are just behind.
Interestingly, not just among various states but also the pay scale of CPAs varies within a state.
You might ask, why?
Well, some of the reasons are enlisted below:
- The cost of living varies in different cities
- Shortage of talent
- Experience in a particular field
- Skillset
| CITIES | VARIATION FROM NATIONAL AVERAGE |
| Los Angeles | +32% |
| Sacramento | +6% |
| San Diego | +27% |
| San Francisco | +41% |
| Oakland | +32% |
| San Jose | +38.5% |
| San Rafael | +32% |
| Santa Barbara | +27% |
| Stockton | -13% |
| Fresno | -8% |
Accountant And Certified Public Accountant Salaries
As discussed earlier, the size of the firm and the level of experience greatly determine the salary and compensation of a CPA. So, now let’s dive into these two majors factors and understand their correlation.
PUBLIC ACCOUNTING
- ENTRY LEVEL CPA SALARY PACKAGE
With less than one year or even no experience, an entry-level CPA can earn about $46000 to $68000 annually. However, the size of the organization should also be kept in mind.
- BEGINNER CPA SALARY PACKAGE
With about more than one year of experience, you can cause an appreciable hike in your salary. Being a beginner-level CPA, you can easily earn $52000 to $87000, depending on the firm.
- EXPERIENCED CPA SALARY PACKAGE
As you gain experience, the job responsibilities start increasing. And with this, you become eligible for a much higher salary package than your juniors. Depending on the firm’s size, a CPA with more than five years of experience can earn around $66,000 to $110,000.
- SENIOR CPA SALARY PACKAGE
The managers and the directors earn a huge amount of $76,000 to $147,000, depending on the firm’s size. For such a generous salary package and compensation, a CPA must have more than seven years of experience in public accounting.
CORPORATE ACCOUNTING
- ENTRY LEVEL CPA SALARY PACKAGE
With almost no experience and just out of college, these CPAs can earn $44,000 to $60,000, depending on which industry you work in and your job description.
- BEGINNER LEVEL CPA SALARY PACKAGE
Without a CPA license and some experience in your bag, a junior accountant can earn about $50,000 to $75,000, depending on the organization’s size.
- EXPERIENCED CPA SALARY PACKAGE
To achieve this level, you have to work in this field for about five years. After gaining experience, you can earn about $63,000 to $95,000. Moreover, the size of your industry is going to affect your salary and compensation without a doubt.
- SENIOR CPA SALARY PACKAGE
Over seven years of experience, senior CPAs can easily earn around $73,000 to $128,000, depending on their work.
Frequently Asked Questions
- What is the difficulty level of the CPA exam?
The CPA exam has four exam sections. One of the sections, FAR, is the most difficult one, with a passing rate of below 50% in 2019. Furthermore, the CPA exam in totality is quite difficult with a slightly above 50% passing rate.
- What is the difference between CPA and CA?
Both CPA and CA have their own sets of benefits and setbacks. However, if you want to practice within the United States, then CPA is good for your career. On the other hand, CA is a globally recognized designation, and you can practice worldwide.
- What are the job opportunities of CPA?
The employment is going to show an increase of 4% from 2019-2029. And with the ever-increasing economy, there will be more requirements for CPA.
- How much does a CPA make in a year?
The average annual salary of a CPA in the US is around $40,000 to $57,500 in public accounting. A CPA with substantial experience can demand an annual salary of even up to $152,000. You can also upscale your salaries and compensation by learning some new useful skillsets. In addition to all of this, CPA can see a hike in their salary package by 4 to 5% every year.
- How much do accountants earn?
For an entry-level CPA, the salary package can sum up to about $66,000. But an average CPA earns about $119,000 in the United States. With a substantial increase in expertise and skills, a CPA can demand even much more. The salary package doesn’t include the bonuses that comprise 10% of your annual salaries.
- Does an auditor need to travel as a part of their job responsibility?
Well yes. The internal auditors usually travel within the companies. On the other hand, the external auditors travel extensively to other locations.
Is a CPA license worth it?
Well yes. There is a huge difference between the licensed and non-licensed CPA salaries. Therefore, if you intend to become an accountant, then start studying for the CPA exam. Yes, the exam is quite difficult to pass, but it is worth it. There is an expected increase in demand for CPAs in the coming years. And this makes this career path more lucrative. A promising salary package and a continuous hike with experience make it one of a deal. The licensed CPAs earn about 10% more than their unrecognized counterparts. Not just that, there is a wide range of job options available to choose from after passing the CPA exam. Along with that, there is a steady growth in your compensation curve over the year.
Also read How to become a CPA
