A CPA salary usually reaches the high five figures, and senior CPAs in management can earn asix-figuresalary. So, if you are a college graduate with a bachelor's degree in finance or accounting, or an entry-level accountant seeking a higher salary and more work responsibilities, you may want to consider obtaining a certified public account designation.
If you are an accountant, you'll find a CPA salary is higher, and this designation will enhance your role. Holding a CPA license opens doors to various and well-paying careers. Obtaining a CPA license (and a CPA salary) requires a significant investment of time and energy, not to mention a commitment to continuing education, so it's critical to understand the potential pay-off before pursuing it.
Certified public accountants work in distinct areas such as forensic accounting, tax preparation, auditing, booking, and information technology in the private and public sectors, or for the federal government. With the right amount of experience, being a CPA can mean an eventual position as a chief financial officer or a highly paid tax accountant.
The U.S. Bureau of Labor Statistics (BLS) does not break out CPA salaries from its reporting on accountants and auditors, but the American Institute of CPAs (AICPA) refers to a report by Robert Half that a certified CPA usually earns more. For reference, the median accountant's salary in 2021 was $77,250.
Key Takeaways
- In order to become a licensed CPA, you must complete an exam, plus meet your state's educational and experience requirements.
- CPAs work in areas such as forensic accounting, tax preparation, auditing, booking, and information technology, or even for the federal government.
- Certified public accountants make more money than accountants without the CPA designation.
- Most CPAs must earn a bachelor's degree or even a master's degree to move up the corporateladder.
- Experienced CPAs can earn in the mid- to high six figures, especiallyif they end up in a managementor leadershipposition.
Accounting vs. CPA Careers
While all CPAs are accountants, not all accountants are CPAs, and it is easier to become an accountant than a CPA. According to the AICPA, which administers and scores the test, most states allow anyone to hold an accountant's title. Meanwhile, to be granted a license, CPAs must meet "educational, experience, and ethical requirements," along with passing the Uniform CPA Exam.
If you want to become a CPA, you are required to pass the Uniform CPA Examination in order to qualify for a permit to practice. Each state has its own set of requirements regarding education and experience, but the CPA examination is the same in every state.
Candidates must complete 150 semester hours of education, as well as any other specific state requirements. Depending on the program you choose, this entails having an undergraduate degree, some graduate courses, or a master's degree in accounting, or an MBA with an accounting concentration.
At the end of the day, companies value the higher standard to which CPAs are held. Once licensed, CPAs are the only individuals who can complete the required audits at public companies.
They are generally more educated than their peers due to the stringent requirements of the CPA designation. With that in mind, broad accounting salaries are misleading. An important difference between an average accountant and a CPA is that only the latter can write up an audited financial statement. This is an important reason why CPAs are in demand at large companies that need to provide audited statements.
Certified public accountants can find work within international financial firms or the government and typically will earn more than an accountant without the designation.
Fast Fact
The BLS estimates that jobs in the accounting sector are projected to grow at around 7% per year through 2030.
While the Bureau of Labor Statistics reports that the median U.S. salary for accountants and auditors in May 2021 was $77,250, individuals in the lowest 10% of the range earned less than $47,970, and those in the highest 10% earned more than $128,970.
That's a huge range because the title "accountant" broadly covers individuals at varying levels of responsibilities. Typically, the senior accountants and auditors with high levels of responsibility are CPAs. Given that they take on a higher level of responsibilities, CPAs are generally on the higher end of this salary range. CPAs may have more flexibility than their peers given the cyclical nature of their jobs (i.e., some times of the year are busier than others), according to the American Institute of CPAs.
Accounting Salary Ranges
There is a wide range of jobs and salaries for people working in accounting without a CPA designation.
Bookkeeping, Tax Preparation, and Payroll Services
In 2021, the median annual wage for accountants working in the areas of bookkeeping, tax preparation, and payroll services, was $77,080, according to the BLS.
Insurance Companies and Finance
General services accounting for insurance companies and finance-focused businesses pay their accountants well. Again, using the same BLS data as above, the median annual wage is slightly higher than those who work in tax preparation at $79,310.
Government Jobs
Accounting positions for the government bring in a lucrative median annual salary at $77,290. Roughly 8% of all accountants and auditors worked for the government as of 2020.
Junior Tax Associate/Accountant
Many accounting graduates can find immediate work working as a junior tax associate or accountant. Tax-related fields can provide a stepping stone to more lucrative jobs. A junior tax associate will need to know about federal, state, and local tax regulations and how to prepare tax returns and other tax-related documents on behalf of individuals or companies. According to the BLS, the annual median salary was $56,780 in 2021.
Most accountant and auditor positions, including the ones listed above, require at the very least a bachelor's degree from an accredited college in finance or accounting. Some jobs will require a master's degree in business administration or accounting, as well.
CPA Salary Ranges
Since most people pursue a CPA to take on additional responsibilities and management positions, their salaries will dwarf the average of most accounting graduates. Looking at data from all CPA job postings on the job board Indeed showed an average base salary of $79,316 in 2022.
However, according to the Accounting Institute for Success, top-level CPAs can earn upwards of $150,000. And the experience and education it takes to become a CPA can lead to other job opportunities, like becoming a company comptroller or certified financial officer.
Entry-Level CPA
According to the Accounting Institute for Success, entry-level CPAs make on average anywhere from $46,000 to $68,000, depending on the size of the company.
Senior-Level CPA
A CPA with over four years under their belt may make between $66,000 to $110,000, depending on their experience.
Manager or Director With a CPA
According to the U.S. Bureau of Labor Statistics, top executives earn between $60,300 and $208,000. Other senior jobs for experienced CPAs are roles in executive management, which can command six-figure salaries.
According to the BLS, the median salary for chief executives was $179,520 for 2021.
What Is the Average CPA Salary by State?
Like most professional jobs, your salary may be informed by where you work, and CPAs are no exception. Employment opportunities vary as well, depending on the kind of accounting specialization.
According to the BLS, Texas, California, New York, Florida, and Pennsylvania are the states with the highest employment for accountants and the highest salaries in the U.S. Keep in mind, these figures reflect accountant salaries, as the BLS doesn't break down accountant jobs by CPA vs. regular accountant. The average wage in these top 5 states for CPAs is as follows: New York ($105,790), California ($92,840), Texas ($85,860), Pennsylvania ($79,200), and Florida ($76,320)—according to the latest annual BLS report from May 2021.
How Much Does a CPA Make in a Year?
It depends on where you live and work. A CPA in New York could make over $100,000, but a junior accountant in a different state might only make a median salary under $50,000.
Can CPAs Make Six Figures?
Usually, senior CPAs in management positions will earn over $100,000 on a regular basis. Most CPAs can expect to earn in the high five figures.
How Much Do CPAs Make at the Big 4?
The "Big Four" refers to the four largest accounting firms in the U.S., according to their revenue. These four are Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and KPMG.
All four companies offer tax and management consulting, legal advisory services, valuation, market research, and assurance. According to ZipRecruiter, the 25th percentile of accounting salaries for all four firms lies at around $70,000, while the 75th percentile rests at $125,000. The national average is approximately $100,000, though the data does not note the average salary of CPAs specifically.
Is a CPA a Good Career?
Yes, if you like math, taxes, and accounting. Certified public accountants are usually in demand, and a good CPA can pull in a high five-figure salary. Plus, if they decided not to work for a large company, they could set up shop on their own. This career offers work opportunities in various public and private sectors, from the government to information technology.
Is a CPA a Stressful Job?
Certified public accountants are in demand and often more educated than general accountants, but they work long hours, especially during tax time, if they work in taxation. The higher salaries often mean more responsibilities at work, which could cause stress, but it depends on the individual.
The Bottom Line
Becoming a CPA is a good idea for many accounting professionals. Still, it makes the most sense for those seeking to climb the corporate ladder and further educate themselves in accounting. It takes time and effort to earn a CPA designation and therefore to earn an attractive CPA salary.
Employers require CPAs for many senior-level finance positions because it shows that a candidate has ambition and intelligence. Therefore, the greatest monetary rewards of a CPA may come years down the line. CPAs in non-management positions can expect to earn up to 15% more than their peers but can also expect long hours and added responsibility and pressure.
The old mantra "you get what you pay for" rings true here; employers pay CPAs more, so they expect more out of them.
