They are important year round at companies and take on an especially key role of course for individuals as April 15th approaches. But in an age of huge tax reforms, the importance of tax pros only grows, and so indeed the cost of their services.
According to an analysis by Korn Ferry, entry-level tax analysts make an average of more than $60,000 a year. That’s about 20% higher than the average salary for entry level graduates. Senior tax accountants, those at least six years of experience, make nearly $100,000. The survey covers those who file for companies, a year long effort, and those for individuals.
Overall, the pay levels are up only 3% from a year before before inflation, similar to everyone else’s increase. But that could change; experts say that corporate leaders will need to focus on this link in finance far more, as the work has now becomes far more challenging. Indeed, these professionals may have worked harder in 2018 than they had in years. The 500-page tax reform bill passed in late 2017 went into effect last year and brought numerous changes to the tax code. Marginal tax brackets for individuals were updated, but those changes were relatively easy to incorporate compared to figuring out the impacts of changes in pass-through income, corporate foreign income, and multiple different deductions.
Tom McMullen, a Korn Ferry senior client partner and expert on compensation, says that companies and individuals may have to pay a little more for that extra knowledge the tax pros have had to soak up. More changes may be on the way over the next few years as politicians across the political spectrum are making taxes a major part of the 2020 election campaign. “I think there could be additional premiums based on the subset of those jobs based on the change of those tax structures,” McMullen says.
With the tax law changes, demand for the field has grown. There are more than 1.3 million accountants, auditors and tax prep jobs now, and the US Department of Labor expects that number to increase by 10% by 2026. That’s considerably faster than the growth rate of other job classes. Whether the job involves flipping hamburgers, coding software or, in this case, managing taxes, higher demand for services normally means higher salaries.
The analysis covers nine cities, and not surprisingly tax pros in higher-priced cities make more. For instance, a senior tax accountant in New York makes more than $121,000, while the same role in Atlanta makes only $100,000. McMullen says the regional differences in salaries mirror those in most other professions.