According to the Bureau of Labor Statistics (BLS), in 2018 the unemployment rate for workers with a bachelor's degree in the U.S. is only 2.2%, compared to 4.1% for those with a high school diploma. Still, many college graduates seek additional education and credentials to help them stand out from their peers. For accounting and finance professionals, the most popular credential is a Certified Public Accountant (CPA) designation. Obtaining a CPA license requires a significant investment of time and energy, so it's critical to understand the potential pay-off before pursuing it. If you're considering becoming a CPA, here's what you might expect to earn.
Accounting Salary Range
While all CPAs are accountants, not all accountants are CPAs. According to the American Institute of CPAs, most states allow anyone to hold the title of an accountant. Meanwhile, to be granted a license, CPAs must meet "educational, experience, and ethical requirements," along with passing the Uniform CPA exam. Candidates must complete 150 semester hours of education, as well as any other specific state requirements. Depending on the program you choose, this entails an undergraduate degree and often 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 required audits at public companies and they are generally more educated than their peers. With that in mind, broad accounting salaries are misleading. While the BLS reports that the median U.S. salary for accountants and auditors in 2018, (the most recently available data), was $70,500, individuals in the lowest 10% of the range earned $43,650 and those in the highest 10% earned $122,840. 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, generally speaking, CPAs are on the higher end of this salary range.
CPA Salary Range
According to the BISK CPA Review, which also cites the National Association of Colleges and Employers survey, college graduates with accounting degrees averaged salaries of $50,500 in 2012. However, those who obtained a CPA license had a median salary of $73,800 and top salaries were around $124,000. That's a huge jump, over 40% on the low end, but it's unlikely that individuals with the same job would make that much more. 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 job postings on the job board Indeed that includes "CPA" showed an average CPA salary of $66,915 in 2020.
In its 2017 salary guide, the finance recruitment firm Robert Half International stated that accounting professionals with a professional certification or master's degree make 5% to 15% more, on average, with a CPA being the most desired credential. For example, the Robert Half range for a general accountant (corporate), with 1 to 3 years experience at a midsize firm, is between $52,000 and $68,250 for 2017. Assuming a full 15% bump, an individual with a CPA in the same role would expect to make between $59,800 and $78,487.
The Bottom Line
Becoming a CPA is a good idea for many accounting professionals, but it makes the most sense for those who are seeking to climb the ladder. 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, as well as 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.