Accounting Firm Partner Salary

Aspiring certified public accountants (CPAs) study and work hard to reach the pinnacle of their career. For a lot of accounting professionals, that includes becoming a partner at a firm. Becoming part-owner of a firm requires a lot of long hours, stress, competition, and in most cases, the ability to buy-in on the partnership.

Part of the attraction of becoming a partner is not only the prestige, but the compensation of the salary that goes along with it. However, there are a lot of bridges to cross before reaching the pot of gold.

Public Accounting vs Private Accounting

Professional accountants have the option of working in two general areas: the public sector or the private sector. Those in the private sector work for companies, governments, or non-profits. Those in the public sector work for a CPA in their firm.

Public accounting firms range in size from small firms with two or three accountants to large firms with thousands of accountants. People who work at small CPA firms usually have more generalized work. In large firms, however, accountants are usually more specialized in areas such as tax, audit, or advisory services.

Since large firms are usually located in large cities, serve more clients, and are able to pay higher salaries, they generally attract top talent. Firms include the Big Four accounting firms like Ernst & Young, Deloitte, PricewaterhouseCoopers, and KPMG.

Pros and Cons of Working for Small vs Large Accounting Firms

There are pros and cons to both small and large firms. Where small firms tend to be more flexible with a better work-life balance, large firms pay more and offer more benefits. Management is also easily accessible in smaller firms and employees’ input has a greater impact on the business operations.

In other words, the size of your paycheck will depend on the size of the company, type of accounting, and your role with the company. However, in the public sector, you may also have the opportunity to become a partner in a firm which sets off an entirely new chain of events.

What Does It Take To Become a Part Owner of a Firm?

Rising from employee to part-owner is in a sense a promotion, but in this scenario you have to invest in the promotion. A part-owner has to make a capital investment when buying into an accounting firm. This is typically a pretty steep investment and can be taken out of their annual salary throughout the years. The amount of the buy-in varies due to location, the partner’s role, the number of clients, and how much business they will be taking on.

What Are the Different Partnership Structures?

It’s easy to assume once you’ve bought-in and become a partner that you’ve got it made. Instead, you start over again within the hierarchy. The lowest position within the hierarchy is when you first come in and manage specific clients. Becoming a partner can also increase your official positions within the company itself. With this you can be promoted to aPCAOB reviewing partner, office managing partner that deals more with the business operations of the firm, or overseeing a specialized area of accounting.

How Are Accounting Partner Salaries Determined?

Owning a part of the firm changes the method of compensation. Typically, rather than a set salary, partners split the share of profits earned by the firm for the year.

A standard partner will only profit off of the clients they work with. The income for tax partners includes clients they refer to the firm and corporate returns, bringing in higher compensation than individual returns.

What Type of Partner Makes the Most?

Specialty practices, such as advisory services, always make the most income. Advisory services have service lines that handle technical issues such as enterprise resource planning systems, which are software systems that accounting firms use to handle their day-to-day activities. Corvee is the perfect example. Corvee offers tax planning software for accounting firms to aid them in building a more profitable firm. These are niche services that have proven to be extremely profitable over the last decade.

What Is the Average Accounting Partner Salary?

If you are considering becoming a partner at an accounting firm, average accounting partner salaries can serve as a guideline so you’ll know what to expect going in. As of October 2022 the average salary for a firm partner is $137,882 in the U.S. However, the range is between $137,882 and 199,285. This figure can vary depending on the size of the firm, years of experience, location, certifications, and education.

A partner in a small firm with 10 to 50 employees makes between $140,000 and $150,000. A national firm can bring in anywhere from $200,000 to $800,000. In Big Four firms an employee with 1 to 5 years of experience can earn $300,000 to $500,000. Partners with 6 to 10 years of experience can earn anywhere from $400,000 to $1.3M and someone over 10 years of experience can make between $600,000 to $3M.

Accountants have always had the luxury of enjoying job security and stability. Complex tax and government regulations will only strengthen the demand in the coming years for those in this profession. Not only will it strengthen the demand, but it will require more accountants to become specialized and with more specialization comes a larger paycheck.

If you’re looking to establish or become a part-owner of an accounting firm, see how Corvee can help ensure your accounting firm is more profitable with our tax planning software.