• Big 4 Starting Salaries – The Facts

    By • Jan 31st, 2008 • Category: Pure Content, Your Career

    I have noticed quite a few searches for “starting salaries” leading to this blog. It’s the season when you’re getting offers and you want to know if they’re true and fair and competitive. You need to start planning how to pay off those loans. You want to gloat over your fellow students who studied liberal arts or who teased you for worrying so much about your grades.

    Well, in the tradition of the WSJ Law Blog and their open disclosure of salaries for first year law firm associates, here you go.

    I received quite a few responses to my research request before the holidays that included detailed information about starting salaries. I also had quite a few respondents that had received offers from all four firms, or at least two or three. That, and my previous experience and knowledge of how the firms work, allowed me to come to this non-scientific conclusion:

    There is informal, if not formal, collusion on the part of the Big 4 firms, with cooperation of the accounting professors/schools, to fix starting salaries and give the students no chance to negotiate if they have special experience, skills or circumstances.

    That sucks!

    The following numbers are based on my very limited sample and my experience and are for students with Masters in Accounting. For undergrad, subtract US$ 3-5,000. The numbers are applicable to the East and West Coasts of the US, where salaries and cost of living is higher. For the Midwest, subtract US$ 5-7,000 on average.

    For Canada, I’m not sure what the story is, but I’ll tell you what it should be. If there’s no exchange rate difference now, you guys should be paid comparable to your US colleagues.

    One of the big complaints of the Master’s students is that they spend a lot of extra money to get the Master’s, sometimes in order to get enough hours for CPA requirements in certain states, but the salaries are not really significantly different from undergrad to pay for the extra time. They all start as 1st year staff anyway.

    As you can see, these salaries all hover around a total package of $62-65,000, salary and bonus, with different mixes of salary and bonus offered to make any particular student feel special. There are regional and potentially office differences. I promise to update or adjust as you, the reader, provide more data.

    Should you try for a bigger salary or a bigger bonus? If you have the choice, and that’s a big if, I would take the cash up front, even with a payback requirement for not staying the year or two commitment they require. A higher starting salary pits you at a higher salary compared to your peers and means lower raises later, assuming you all do equally well. You’re going to stay within a range, from a base salary perspective, for a while. Any base pay differential evens out over time. The raises for employees with grad degrees are often a smaller percentage – even though the actual RAISE might be bigger the first year or two, it’s because it’s calculated from the bigger base salary.

    So always take cash up front! (If they lay you off after the first year, they won’t make you pay it back…)

    Then there’s the overtime issue. We’ll have to see what comes out of all these lawsuits. But I hope it is justice.

    EY: $60k + $5k bonus (1 year commitment) + 15 vacation days (10 firm holidays) + $1k relocation reimbursement after acceptance of the offer.

    KPMG: $58k + $4k bonus (1 year commitment) + 25 paid vacation, relocation “bonuses” also available
    PWC: $59k + $3k bonus (2 year commitment) + 15 paid vacation (10 firm holidays)
    Deloitte: $57k + $3k bonus (2 year commitment) + a lot of vacation/holidays

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    123 Responses »

    1. Great great post. I’ve searched for other discussions on on the topic with not much luck. Being in my 2nd year at a big 4 in nyc, these starting salaries are pretty much exactly whats going down. Its a shame some of the “relations” you notice post-graduation between the professors and the big 4 recruiters. i.e. getting taken out to fancy dinners, box seats at campus sporting events, and the like. in return for what? to “pump up” that firm during their advanced auditing class? From my experience, the profs are definately in the back pocket of the recruiters for the big 4 in one facet or another. i find it interesting the big 4’s rebuttal on the issue of salaries (and turnover) when raised at firm meetings….they’re response….. stay with us short term, leave for more money. stay with us long term, leave for way more money.

    2. I am one angry 1st year senior associate at GT NYC…not making much more than the 1st year associate at EY…OUCH!!!

    3. To the angry GT staffer: You’re problem is you went second tier. I received an offer to start with GT as a campus hire, and they were about 15 grand below ANY big four offer. I called the recruiter and let her know I would be declining.

      Her response was “I just can’t compete with the big four salary, sorry.” when I told her I accepted at a big four firm.

      This issue just demostrates the vast gulf between the big four and the other firms. With nearly $20 billion a year to spend, the big four have the ability to eliminate competition from the second tier firms by simply buying the students.

    4. Collusion? A less sensationalistic person would simply call it competition. Is there any profession in which the top employers do not pay substantially similar salaries to entry level candidates?

      Special circumstances? What special circumstances? There’s only one that counts, relevant experience, and it is compensated for. I don’t care who you are, everyone else is going to be fumbling around their first year learning all the real knowledge no school teaches, receiving tons of training, wasting the time of senior personnel asking countless questions, and taking at least three times longer to accomplish tasks than those senior individuals could.

      If there is any salary issue in public accounting, it is that entry level hires are over compensated, depressing the wages of experienced workers who truly earn their pay.

    5. anonymous,

      the 2 quotes below are why staff hate their seniors. I feel bad for any associate working under you. If the pay is so bad, go into corporate. you’ll work less (probably), make more (definately), and won’t have annoying staff bothering you.

      “everyone else is going to be fumbling around their first year learning all the real knowledge no school teaches, receiving tons of training, wasting the time of senior personnel asking countless questions, and taking at least three times longer to accomplish tasks than those senior individuals could.”

      “If there is any salary issue in public accounting, it is that entry level hires are over compensated, depressing the wages of experienced workers who truly earn their pay.”

    6. I never really understood how someone with only two or three years experience could be put in charge and in a position of judgement of someone brand new. Where are the partners and senior managers or even the managers? It’s just not right and doesn’t help quality. How can partners sign off on these audits?

    7. just a random point to add, the bonuses offered by the big 4 are primarily, if not solely, offered only to interns who have then gone on to accept full-time offers.

    8. Signing bonuses are rightfully offered only to interns.

      Think about the amount of money they spend on a typical three month intern: salary of typically $12 to $15K, training, lunches, travel expenses, all the billable hours lost by managers and partners during the internship.

      The bonus is a way to make damn well sure that the intern won’t take their nearly $25K investment and walk into a different firm because of a lousy $1 or $1.50 difference per hour.

      It’s smart on the firm’s part.

    9. The last two posters are misinformed – I was never an intern and got offered signing bonuses in NYC. Don’t know if that’s a recent change, but I can say from personal experience that it can happen!

    10. nyc-staffer,

      I have no sympathy for seniors who dislike answering questions for staff, or even those that say things like, write down ten questions before you come see me. Training is part of their job, and making sure people working under them have their questions answered and understand the why behind the answer is just as important as the client work they do.

      That said, this is a huge drain on productivity, and my opinion on staff salaries remains.

    11. Francine,

      I find it interesting that no one here has responded to your question. Way back when I started (with the Firm That No Longer Exists), a partner once told me that, absent gross misconduct or incompetence, new hires take two years to accurately evaluate. That’s because different people have different learning curves, and being proficient at relatively simple tasks does not necessarily translate into competence in more complex areas.

      I’m about the same age as you are, although my work experience is quite different. I’ve always remembered that advice from that partner, and I consider it to be right on target.

      I also agree with your assessment that for accountants with 2-3 years of experience are most likely incapable of fairly evaluating first year auditors.

      In my office at the Firm That No Longer Exists, every single workpaper was reviewed by a senior, manager and a partner. I’m not sure if this is still current practice in the Big 4, but thorough workpaper review is the best way for managers and partners to adequately assess staff accounants.

    12. Once you asserted collusion you lost all credibility. I know this is your blog, but would think you would be careful about making such giant accusations. If you have evidence of collusion, then present the facts.

    13. To the last comment from Anonymous:

      Based on my experience in the firms at the level and in the realms I was, I am aware of conversations about many different issues between the firms. These are mostly informal and in the context of professional association meetings, informal benchmarking and info-sharing exercises, standard setting activities and industry advocacy forums. Given the direct experience I have had with the college recruiting process at the firms, and the enormouus feedback I have receved before and after I started writing the blog, I know there is discussion, at least informally, if not formally between the firms on the issue of salaries and benefits with regard to first year hires. I am not an investigative journalist nor am I the SEC, PCAOB or a state’s attorney general. My objective in writing the blog is to inspire those with more expertise and resources to further investigate the possibility of such things as lack of indepencdence, collusion and self-dealing and to educate interested parties involved with regard to these possibilities so they can make better choices.

    14. When I worked at PwC in San Jose, I remember hearing a partner mention where the Big 6 (as it was at that time) in San Jose met and discussed what salaries they were planning to offer various grades next year. Based on that, I believe the collusion regarding salaries is very explicit.

    15. Salary Doesnt matter i guess …its the experience u get through big 4 that counts , If you know IN PAKISTAN , BIG 4 pays around 3000 rs in start , which is Equalent to $50 of US ! but after 2-4 years U get as much as u want !

    16. Guys! You have sexy salaries in UK and US in comparison with cost of live. For example in Russia salary of A2 in Deloitte is about 1600 us dollars. Rent of awful apartment is about 1500 $ per month. And our “respected” partners:
      mln 4.5 dollars annualy with income tax rate -13%. this sum is equal to total salary of audit assistants and seniors in Moscow audit!!!!!

    17. Guys, I am going through interviews for a Manager’s position in Big4 – Financial Advisory/Corporate Fiannce department in Kiev, Ukraine.

      Can you please give me the salary range? How does the compensation compare to Moscow? Are there any other benefits/details for negotiation that I should be aware of?

      Thank you!

    18. Does anyone know how the Big 4 continue to compensate year over year? Do they give a standard 3-9% increase based on performance?

    19. Do anyone know how much does a Big 4 Senior get pay in London, UK?

    20. Insane.. I’m assuming there is a significant COLA difference in the northeast.. I started with Deloitte Milwaukee in fall 2004 at $42K, and first year senior at $55K. I left for private after my first busy season as senior for $65K, and back into public now at $70K. Hoping the bump to manager is substantial

    21. Manager in Milwaukee could range $80k – 120k depending on years of experience and service line. Senior Manager could be $105k – $175k depending on experience and service line. Higher range would be a year or two from Partner. Year prior to partner could be just under $200k depending on clients. A few people over $200k as well depending on service line and clients. So break down first year ~$60k, take your 4%-10% annual raises depending on performance and “market”. Five years to Manager, check on range and inflation numbers / “market”, then factor about 8%-10% raises going forward if good to excellent ratings at Manager to Senior Manager. Figure three years minimum to go Manager to Senior Manager. Experienced hires could fall a little outside the formula. I think total time to Partner is closer to 13 years now. 5 + (3 or 4) + (3, 4, or 5). Have to fund retirement for Partners who are living longer. Now for fun take your rate per hour and figure out how much is being made on your time…Industry comments are valid. CFO at smaller to mid-size company could be $250k – $400k + bonuses. “Administrative” C-Suite industry jobs can compete with per partner AVERAGE annual distributions. Keep in mind the first 5 years of Partner are good but not that great with the costs associated with start up (especially Partner year 1 and 2). As well, some Senior Managers could make more income the last year as Senior Manager compared to first year Partner “all-in”.

    22. Big 4 Atlanta is offering first year staffers $50K + $2K signing bonus + $5K CPA passing bonus + Becker materials + one CPA exam sitting + benefits

    23. Oh and a friend in D.C. is getting $57K base salary and similar everything else with a Big 4

    24. @Abby
      For the years right after SOX was passed the annual increases were very good (9-14% for top performers). Last year was about 2-6% and this year the rumor is 0-2%. Supposedly those being promoted to senior or manager will see a slightly larger increase but no on is holding their breath.

      I do agree with the posters above who say staff are overpaid. Factoring in their bonus they usually make more than 2nd years and some seniors. And don’t even get me started on the interns who make a lot more than staff/seniors due to their overtime pay each Winter.

    25. @Johnny Drama

      I’m not quite sure how you can factor the starting bonus into the first-year’s salaries and compare it with 2nd year and Senior associates. 2nd year and Senior associates received the same starting bonuses (more or less). It’s a one-time thing each employee is eligible for; the timing of it as a first-year bonus doesn’t make it relevant to the discussion of 1st year salaries vs 2nd year salaries.

      Apples to apples.

    26. First year:50K
      Second: 55K

      Senior First year:60K
      Senior 2nd yr:65K
      Senior 3rd yr :68K


      Thats it!

    27. Except some mid-tier-and-up firms have frozen salaries for anyone not getting a promotion…

    28. Anyone hear a rumor that one of the Big Four had to get a bridge loan to make payroll??

    29. I know sr associates making over $110K, and managers making over $150K. It depends on skill set, practice area and such. The numbers I see above are ballparks probably middle of the road numbers… but just want you to know that there are outliers.

    30. Im starting in October as a first year in Advisory in a big 4 and am making 61k

    31. @30 – What city?

    32. ERS in Los Angeles is making 50k. GT has renegotiated salaries. Bay area has been about 5k higher. ERS previous year was 56k. YAY!! And some DT offices have canceled first week of local training and will be sending first years to national training only.

    33. Houston First Year: $51k. Seems to be 4k less than last year?

    34. PwC – Charlotte, North Carolina. I’m a first year financial services audit associate starting in October @ 54k base salary. 3k signing bonus. 5k passing CPA bonus.

    35. My personal experience: Houston intern (ok, so interns aren’t first years) for EY tax = $50k, no bonus. My friend, Houston intern for Deloitte ERS = 50k, 1k bonus. Mid market firm (but just one firm, I doubt others followed this trend) = 50k, 2k bonus. I could probably have found intern salaries for PwC, KPMG, GT, and a few others, but “technically,” all our professors advised us “not to share salary data,” so I’m already starting a dark path of breaking protocol. haha.

    36. @31 New York

    37. Had a meeting with Partner and Senior Manager of BIG 4 about 3 months ago as they were trying to sell us internal audit services. I inquired into starting salaries and they said their firm was RESETTING SALARY EXPECTATIONS this year. Bigger bonuses but significantly lower base so future percent increases would be much lower.

    38. @AS

      So why do you think your professors asked you to not share salary data? Did they also tell you all offers were non-negotiable?

    39. @fm

      I imagine the profs simply didn’t want people to be pressured into feeling they had to give up their salaries (it didn’t seem like a malicious request). So no big deal if people just volunteered it, right?

      They didn’t explicitly tell us that offers were non-negotiable, but they did come out and say that 1) the firms talk with each other about offers and 2) trying to negotiate probably won’t be successful based on point 1.

      For example, when I was talking with an EY partner about lack of bonus, the partner tried to argue, “Well this is something all the Big 4 are doing.” But I pointed out D’s 1k bonus, and he tried to argue, “Well, they are lowering the base by 1k.” (not true). He never budged from the offer amount, and I didn’t think I should push it *so* far (but then again, I have no idea how far one should push if one were trying…)

    40. @fm Near Houston area, yes we were told they were non-negotiable. And so they could collude in peace?

    41. GT has frozen salaries for all staff not being promoted. Promoted staff are looking at ~4% raises from what I’ve heard. Minimum chargeable hour requirements have been increased ~15-20% across the board. No bonuses this year from any offices I’ve heard from. And yes, @32, GT has lowered the starting salaries for this year’s incoming class… in addition to pushing their start date back 4 months.

      These are going to be some quality GT audits this year with first-years being trained on the fly during busy season and everyone pissed off about salaries.

    42. @39 and all,

      1) sharing salary information with others looking for a job is no issue. Sharing salaries with co-workers can only lead to heartache. It causes inappropriate competition and resentment that can negatively impact working relationships. It is best to consider your own situation and the entire package — benefits, vacation, salary, bonus, travel opportunity (if you want it or lack thereof if you don’t), type of work, ability to work from home, quality of your peers, quality of your boss, etc, etc. Make the best deal you can that makes you as happy as possible. Some people care more about say the work environment than the money, or the vacation policies than the bonus. So if you only compare salary you might not be seeing the entire picture. If you travel a lot you can make money on that too — mostly if you can eat cheaper than per diem rates (which you can easily do). My advise — negotiate the deal that feels good to you and don’t worry about other people… your career and theirs are not the same, and you can only manage your own career.

      2) as for negotiating — you can definitely do it but I wouldn’t recommend it in these economic times. You should know when to pick your battles. If you are fresh out of school with no experience then you have little ammunition to bring to the negotiating table. If you have no ammunition to bring, and the economy is as it is — then negotiating is viewed as playing the firms against each other. I have seen that when people try to “play the firms against each other” those involved in the recruiting process don’t respond well. People do not like to be played or manipulated… and when they feel that is happening they will not offer the job at all. I know the recruiters ask what offers you have outstanding and they tell you some hokey reason why they need to know. I don’t think it is any of their business… I would not tell them. When/if you get an offer — decide each one on their own merits.

      The problem you have is if you must answer one company on an offer before you have heard from the other — I think you can hold the company off much easier than you think. Once you have the offer I believe it isn’t hard to tell them you need another week before accepting (and lead them on that you are interested but want to think about it longer). Trying to hurry up the place you are interviewing with is harder — don’t do it until you have a clear picture that they want to make you an offer.

      As college grads with no experience — remember… you are an unknown and for the most part you are all as good as the next one. There are some differences, but not a ton. It sounds harsh — but you haven’t yet distinguished yourselves in the workplace. So that gives you little negotiation ground. If there was less supply than there is demand the story would be different — but that isn’t the case now.

    43. I agree with Anonymous @ 42 (???!!!???)

      It’s much easier to negotiate salary as an experienced hire (i.e., when jumping firms) then it is coming in as a first year. In fact, it is (or was) amazingly easy to negotiate a more than decent “bump” once the partners involved decide you’re the one they want. Salary bands, officially sanctioned signing bonus ranges, none of that matters if the right partner says you are the one. (Actually, not all that different from the annual review process, but I digress.)

      So my advice to first years is to accept the offer, then grab as much learning and experience as you can grab. Look to jump firms as an experienced “heavy” Senior or 1st year/2nd year Manager. When jumping firms, push hard for a salary bump and large signing bonus, to compensate you for “starting over” and “having to rebuild relationships”. But after that, don’t expect a large first year merit increase or profit-sharing bonus at the new firm (which should be okay because of the time value of money, right?).

      I’m going to share my secret. You all ought to send Fran her $10.00 because this tip will earn you thousands. Here is the secret sentence that will work, ONCE THEY DECIDE THEY WANT YOU (don’t use it before then). “That is a fair offer, but it doesn’t really tell me that you want me.” That’s it. Trust me, it works. Say the magic sentence, then sit back and shut up. Do not say another word.

      I learned this technique from the best and it almost embarrased me how much [FIRM 3] threw at me in order to woo me from [FIRM 2]. After I uttered the magic sentence, the next thing I heard was “Okay, tell me how much it will take to convince you we’re serious.” As you might imagine, I “set my anchor high” as they taught me to do in sales training. When HR objected, the managing partner told ‘em to STFU. Did I say that amount “almost embarrassed me”? Well, not enough to turn down the offer.

      One last piece of advice while I”m on this didactic screed. If you’re lucky, there will come a time when partner after partner tells you that you are destined for great things, that they will support you and mentor you and make sure you succeed. If you will just trust them and sign on the dotted line, your future will be assured! Well, I would say sign on the dotted line if the money and opportunity seem right. But don’t believe a single word those people utter; they’ll say whatever it takes to get you on board and, once they have you, you’ll be thrown into the ocean to feed (and fend) for yourself. Duplicitous, self-serving, and focused on #1 just scratches the surface of descriptive phrases that could be applied to these people.

      Cynical & bitter? Me? Nope. Just experienced. So you first years, get your game faces on. As my buddy used to say, have a ready smile and a firm handshake. Say the right things and do the right things, but know that your most important goal is to increase your knowledge, experience, and skils, so that you can monetize them at the right time, either by jumping firms or landing in the corporate world. Thinking about making partner one day will not help you accomplish what you should want to get out of your time in the Big 4 or mid-tier firms. And, as Fran would say, why would you aim for it anyway?

      Getting off my soapbox now — sorry for the length of the orratory.

      — Tenacious T.

    44. @42

      I definitely understand what you are saying, so that is why I especially didn’t press the issue too far for negotiations — I know that I don’t have the experience or distinction. Relating to pt 2, the discussions occurred after offers were given (our profs also advised us to keep our cards close until firms were willing to provide offers), so unless the firms would be willing to rescind provided offers (which to be honest isn’t unheard of, but everyone from the firms cried up and down that “no offers would be rescinded” [although they kept silent about delayed start dates and all other kinds of horrors that I’ve heard about]), I think we were all safe.

      I just found it interesting that the collusion among firms didn’t go exactly as planned (that is, if the people I talked to from EY *truly* didn’t realize that Deloitte was still offering bonuses, despite the other firms not offering them), and that that B4 doesn’t even really consider mid markt (the EY partner was unconcerned with the mid market firm that was offering 2k bonus with same base pay). But I know to be fortunate to even be getting offers in these times.

    45. @TT — one comment besides the fact that I am surprised we agree (we rarely do)… but my comment — the only person to manage your career is yourself. Regardless of what anyone ever says to you about your greatness and you going far — you will not succeed unless you actively manage your career. To expect anyone else to do that or even to assist in that process is unrealistic. So when a partner or manager or some superior tells you all those things TT mentions. Take the complement and nurture that relationship. That person will only look out for you and help you as long as it continues to have an advantage to them and their career. More importantly, that person may not be in a position to protect you or watch out for you — so nuture relationships with lots of people. the law of averages says that one or more of them will be in the right position to help you out — sometime. So don’t expect anything for nothing. Just manage upwards and downwards and you’ll be fine.

      @44 — would like to add a word of encouragement. I am in the Forensics practice and we are seeing a big uptick in our work. There is no way we will not take our new hires on as soon as HR will allow us to have them. I doubt we will be delaying start dates any further. I do not know if the work load will continue — but I can tell you that we have very high utilization scheduled out for 3-6 months now. My point — the recession seems to be showing some signs of letting go of its grip on our economy. We did not lay off people in our office — but we did lose a couple to performance issues and several to attrition. So we are feeling a bit understaffed and looking forward to bringing in some young people to help us out.

    46. @37 – I can attest, or at least that it appears to me, that KPMG is resetting salary expectations. I am currently a 2nd year senior almost 3rd year and they pretty much told us not to expect much of any of a raise or bonus. I have a brother that worked in the same office as me (he left after starting his second year as senior), but one year ahead of me, and we were in the same Fed tax group. We talked and I know I am making about 4k less then he did when he started as a 2nd year senior and I was just 1 year behind him. I have also talked with some of the staff in my office under me, and in talking with them, using ball park numbers, we pretty much figured they were making less than what I made when I was in their spot. I am honest with my staff and I pretty much tell then the same thing and that they will make less then me when they reach my level, ie 2nd year senior. KPMG is trying to reduce it personnel costs and I they are doing it by lowering salaries.

    47. @PV — $4K is not a large difference and could be related to a performance difference. Talking to your staff in ballpark figures is far from reliable information. Not giving raises/bonuses this year isn’t necessarily about resetting salaries… it is just that there is no money to give out. When the company does not perform this is what happens.

      Every 2nd year senior does not make the same amount… the range is at least 40-60K wide… so just cause someone else was paid $4K more than you is not an indication of a widespread change. To expect or want all people of the same title/year to get paid the same is a really bad idea… employees are differentiated by performance and paid accordingly. There is nothing about your anecdote that indicates a widespread salary “reset”.

      That said, what is a salary reset. Every year salaries are reviewed and to some extent the economic conditions reset salaries… but within a range. This is what always happens… what is the surprise here? I suppose the surprise is that reset is not necessarily increasing. There will be some stagnant years.

    48. @32 Do you happen to know where DT is sending people to National Training this year? I’m starting in Sept and still haven’t heard….Thanks

    49. depends on your region, the southeast goes to atlanta, ga mostly.

    50. One very useful thing I was told by a partner years ago (and the only real useful piece of advice I got from him, but I digress!) was to worry about your own salary and how it works for you, not compared to others. By all means, look at averages, industry etc. but as @42 says – if you share salary info with your co-workers I can’t see what good will come of it.

      If you think about it:
      – what do you do if two of you share salary info and you are higher than your friend? That doesn’t help you negotiate and may p*** off your friend.
      – If you share info and your friend earns more. Then what? You get upset at your friend? You tell your partner, “but Bob makes $5k more than me” – and you’ll likely get a response that everyone’s different, it’s based on merit etc etc etc.

      So, comparing first year or two salaries may make sense, but I would think long and hard about sharing salaries with co-workers once you’re more senior than that. I have never done that beyond my first two years – while I’m 99% sure there were others making more than me at my grade, I can live with that. There were also others who I know were probably better performers (not all of us can be “the best”, there’s almost always someone better!) Were there likely people making more than me who shouldn’t have been? Who knows – probably. But there was nothing I could do about it.

      Sites like Glassdoor let you see more info too on an anonymous basis, but I’d always take salary info on there (and here – no offence FM) re salaries with a pinch of salt. There are lots of variables that you may or may not be aware of in each case and there will always be outliers as someone posted already.

      Also, without trying to sound like someones father – in this economy, unfortunately there’s more to worry about than 1k or 2k difference in a starting bonus….

    51. I started with a Big 4 firm in Chicago last year and what Francine posted was pretty close (maybe take 2K off) for each Big 4 firm in Chicago. As we all know starting salaries aren’t moving up this year.

    52. For those of you in Chicago that have the opportunity to work for Crowe – they’ve been starting at $65K which is the highest paying firm in the Chicago area. However, they’ve significantly pushed back start dates.

    53. anyone know the big 4 salary ranges for first year managers in the midwest? (minneapolis, chicago, KC, etc)?

    54. Anyone know if the Big 4 still pay for the CPA Exam?

    55. First year KPMG senior here in Metro practice.

      From what I’ve gathered they aren’t going to offer sign-on bonus to interns/first years any longer at KPMG. For me, this was $6,000 gross and was my bridge from grad school to first day.

      First year was $57k, with the $6k bonus
      Second year was (is) $62k with CPA bonus ($3k)
      First year senior looks like $65-67k, depending on if there is a merit increase (we get 5% promotion raise)

      Kinda sucks my billing rate greatly increases from year 2 to year 3 and I will get a measly 5-7% increase. But friends at PWC in the NYC-metro area did not get merit increases for next year.

      The 25 personal days has turned into 22. You are forced to take certain days off during the year. And if you liked accruing vacation time, KPMG cut the hours you are aloud to carry over. In addition, the 401k which was the best (75% match) is now standard fare. This resulted in about a $2k cut on my part because I contribute to the max.

      In terms of having seniors with 2-3 years experience supervise work, I agree that managers have to be involved. Smaller jobs can go well, but there is no way IMHO that a 23-26 year old with limited experience should be the in-charge on a public/SEC client!

      Problem is that a first year manager right now can only be pulling down $80-90k which is peanuts compared to the work/hours they (generally) put in. There is such a huge gap b/t managers and partners. But, I also understand that managers don’t risk capital investment (although they are pretty much as liable as anyone in terms of litigation) like partners do. I’m not sure where the partners are (on the golf course??) but very few are involved with the engagement team. I trust it’s like this at other firms.

      We have had 6-10 seniors leave in AUG-SEPT so far in my office and they are getting jobs in private industry. I’m simply waiting for IFRS training/experience to move on.

    56. @41 – you are incorrect on two points – first years have only been pushed back 1 month – they will be trained mid October – plenty of time to be ready for busy season. You are wrong on bonuses.

    57. @54
      KPMG and DT still pay for the exam and the review course. KPMG still gives a bonus for passing, don’t know about DT

    58. D&T gives $5000 if you pass in your first year $3000 if you pass in the second year. They pay for the review course and exam fees as well.

    59. @55, what’s the metro practice? At DT Northeast, the bulk of promoted seniors (those rated 3s) got maybe a 2% raise which for most of them would probably bare put them above $60K. A “measly” 5-7% isn’t bad at all. That’s the thing I could never figure out about KPMG. In the Northeast, reputation wise, they always seemed to be the laggard in nearly everything but they always seemed to pay the highest salaries at the lower levels.

    60. Does anyone know, how much does it cost to send a staff to a weeks national training? How much would it have invested already in a senior before it decides to lay off a person?


    61. Can anyone provide some info on salary ranges for 1st and 2nd year seniors at Big 4 firm in the San Francisco Bay Area?


    62. Big four Charlotte, NC starting salary of 47k with 2k bonus. Seemed really low to me. After reading these posts, I guess it is. I already accepted though and hope that my experience and opportunities within the big four will pay off in the future. Oh, I dont have a grad degree, but do have requirements to sit for CPA.

    63. Sorry, forgot to mention that this offer was received this summer with a start date of fall 2010

    64. I have a random question that this blogs readers might be able to answer. Not sure what post to comment under but here goes. Does anyone know anything about companies like WTAS? I’m considering jumping ship from the big 4 but I don’t want to move and have hours that are just as bad. Its hard to imagine hrs worse than what I have at PWC but hey, most of the people that work at WTAS used to be big4 employees. Old habits die hard. Would appreciate some feedback if anyone is familiar.

    65. First year senior here at Big 4 in NE region and I do not pity those first year seniors at KPMG I read about above making $65-67k. As a top rated first year senior I make a shy above $58k (new hires are making $55k plus bonuses mentioned above – I “enjoyed” a 4% raise my first year and under 2% my second year). Top rated second year seniors are currently at $65k, while third and fourth year seniors (since no one was promoted to manager) are currently around $72-78k. First year manager floor was bumped down from $95k to $82k. As you can see, the salary gaps are huuuuuge. The problem here is that the managers who enjoyed the SOX boom and double digit annual raises and are now making well over $100k with less than 10 years experience. There is no natural attrition in this group since public accounting for these people is the best gig going. As a result, we have a glut of managers who don’t want to leave. My forecast? Hopefully, the two year hiring lag will result in a reduction of new hire salaries next year – think $50k (and maybe $47k the following year). Current staff shouldn’t expect much of anything next year, even if being promoted to senior. The decrease in the manager salary will hopefully weed out the 5th and 6th years who feel it’s not worth it to stick around another year for an extra $5-7k, especially when they can now command $90k+ in some guaranteed 40 hr/wk private gig. That will buy the firm an extra couple years to figure out a way to trim some of the managers and senior managers. They are already pushing hard for managers to sell new business and my guess is that will become a more important (dare I say KEY) aspect of the manager’s performance rating. Those who do not perform will be cut. There has also been talk of making the standard time until manager promotion 6 years instead of 5. This scenario leaves current 3rd and 4th years (like myself) in limbo. As a result of the increased workload and lack or salary increases, a number of frustrated first year and second year seniors have already jumped ship this fiscal year to avoid being exploited further for minimal pay during busy season. That being said, my rationale for staying is that I’m hoping the comp pool and increases next year will be geared toward mid-level seniors. As the current managers age and leave (or are forced out) over the next 4 years and as we approach IFRS convergence slated for 2014 (also around 4 years), those at my level will be the beginning of the new “wave” of manager promotees. The firm can’t afford to hemorrhage too many poor souls at my level without destroying the whole farm team. Plus, it’s only FAIR that we be compensated somehow for being the last group to start that was promised riches and golden prospects (all of which was backed up by current employees at the time, so we believed it. Trust me, I understand the firms still try to sell that, but current employees aren’t corroborating it anymore) only to realize that 3 years later we are working 30% more, with greater responsibility, for the same money. Then again, since when is anything about this job FAIR?

    66. I’ve guestimated that new hire training costs a mid-size to large accounting firm, minimally, on average, $5k per person per week. Someone else can verify my rough calcuations, as a lot of audit fees are turning more into flat fees::

      Labor = $100 billable/hr x 8 hrs per day = $800 per day
      Food & lodging & incidentals = $200 per day
      Total = $1,000 per day x 5 days = $5,000 per week

      There’s other costs as well, including airline, ground transportation, and car rental, if needed. An additional cost to allocate is if a firm’s senior members, including senior associates, managers or senior managers, are involved in training and instruction. These expenses are mitigated somewhat by tax deductions the company can take, and trainees who live locally and don’t have transportation expenses reimbursed, and tax deductions the company can take.

    67. @fm – your basic premise is that the Big4 are in collusion. Let’s think about this. I’m going to go back many decades and into a completely different profession. I graduated college in the early 80s and was not an accountant. Offers from many firms in many industries ranged from $20K-$30K or so. The low offer was in a state that has no sales tax. Given that, the range of the offers was actually within $5K. These are firms that would have no reason to be in collusion — Dupont, GE, Kodak, Xerox, smaller firms you wouldn’t know, consultancies, service providers, manufacturers — and they were offers across many states mostly in the NE US. Could it not be said that a college grad with a certain degree simply has a specific marketplace value regardless of where they go? I wouldn’t expect an art major to get the same offers as an engineering major or either to get the same range as an accountant. But I suspect that even if you look across degrees, the range isn’t that wide.

      Couldn’t it be true that there is a market for new grads, and that supply/demand stabilizes offers within a relatively tight range? It seems this has to be true — cause if a firm is below the range, then they will likely not get any acceptances, and if they are too high they will realize it pretty quickly.

      In the end — a difference of $5K in a starting salary will have little to no impact on your lifestyle and career future. Until you are talking about $20-30K differences… you aren’t talking anything at all. To a young grad $5K may seem like a lot… I can only ask those young grads to have patience and faith… cause it won’t be long before it looks quite different.

      And let me reiterate regarding the overtime pay thing… be careful what you wish for. As soon as overtime pay is instituted salary structures will be adjusted. base pay will go down… overall pay will not change as much as you think… and for some it will likely decrease. It will become an ordeal to get promoted to management — as you will likely have to apply for the position. People are worth what they are worth… the job is what it is. If the market can provide people to work 60 hrs/week at $60K… then the new structure will settle down to 60 hrs/week for $60K. All the success of such a law suit will do is make a nightmare for the firms and the employees during the transition time.

      Look back at the travel expenses lawsuits regarding the idea that supplier discounts were being called a kickback. Nothing has changed except now that amount of $$ is allocated to clients and made more visible. Instead of charging the client $150 for a flight, they are charged $120 for the flight and $30 for the transaction fees. The firms used those theoretical kickbacks to pay for the processing and so now they simply report both to the client and charge both to the client. For all the excitement and accusations — nothing changed and nothing was ever wrong. The overtime idea will be the same.

      At least you admit that your theories and analyses are unscientific.

    68. Anonymous @ 67 —

      1. I’ve worked at three Big 4-type firms. They each know what the other has been offering new graduates. Do they find out by calling each other’s HR department? Doubtful. More likely the info comes from the schools, or from the new hires themselves (the ones that get multiple offers). But they know, trust me.

      2. “People are worth what they are worth …” Well, if the past 18 months of layoffs have taught me anything, it’s that the Big 4 are terrible at valuing the worth of their staffs. From my perspective, the firms have created a situation where the staff need to approach 100% utilization in order to stay “safe” — without compensation for overtime (which is now essentially mandatory and programmed) and without, by the way, decent raises or chances of promotion. Did you see the various posts about Deloitte now mandating 125% utilization for staff? That’s right, 125%. Not a typo. And all that OT is uncompensated. The reason for that (in my opinion) is because (a) there is no longer enough staff to do the sold audit work, and (b) it was necessary to make partner unit values what they needed to be (budget-wise) in order for leadership to keep its positions. Your words betray a fundamental assumption that people are fungible and lack individual characteristics, which is of course consistent with firm management style. In fact, some folks tend to be worth more than others, especially in the consulting roles, even at first and second year status. The problem is really that the firms do not know how to properly evaluate the worth of an individual, who are (as Fran writes) simply “rows on a spreadsheet” instead of individuals.

      3. The problem with your travel kickback theory is that (a) the firms couldn’t demonstrate that the clients benefited from the discounts and rebates, and (b) the firms had signed contracts that promised to pass on to (government) clients any such discounts and rebates, which they breached. The firms sure paid out a lot of money if “nothing was ever wrong”. As in $100 million or so, if my memory serves me. And failure to pay overtime in accordance with state and/or Federal laws is actually not the same situation at all — it’s a violation of law as opposed to a breach of contract. Other than those small points, I have no problem with your logic. (Sarcasm.)

      Enjoy the koolaid my anonymous friend.

      — Tenacious T.

    69. Let’s look at things from a billing rate perspective in terms of first years vs. first year seniors:

      First Year Senior: ~1800 billable hours x $400 rate/hr = $720,000
      First Year Staff: ~1650 billable hours x $340 rate/hr = $561,000

      Revenue Difference: $159,000
      Base Pay Difference: $900

      Makes sense (sarcasm)

    70. @TT — you missed the points (which have absolutely nothing to do with the B4).

      1) market determines salaries, not an individual’s value/skills. If salary was determined by value, admins would get paid a ton more.
      2) a salary difference of $5K is not significant… it has almost no impact on lifestyle (particularly after taxes)
      3) over time the uniqueness of individual skills will impact salary only because that combination of skills has a different value in the market
      4) if people are willing to work 125% for 60K, then they will get 60K – regardless of the vehicle used to pay out that 60K (salaried or hourly with overtime) — it will end up being 60K
      5) no statement was made at all about whether paying overtime or not paying it is proper or illegal or right or whatnot

      And let me add — given the current economic situation (which yo uought to accept as being the worst situation since the 1930s) — the market will encourage people to work longer for less. This situation has made employees value job security more than pay or hours.

      My friend, maybe it isn’t koolaid… maybe it is just maturity.

    71. Hi Anonymous @ 70,

      Well, I read your post and responded to what you said. Let me respond, once again to your post, point by point if you insist.

      1. The market determines salaries to a large extent but the market for accountants is dominated by an oligopoly called the Big 4, which acts (intentionally or not) to overcome market forces. After the initial hire, each firm controls compensation and uses means other than an accurate valuation of an individual’s worth to determine that person’s compensation.

      2. Yes, I agree. But few 20-something’s have our perspective and the difference between $45 and $50 thousand seems quite large at the time. I would also point out that, since raises and promotions are currently tightly controlled and difficult to count on, getting the maximum up front might be more important today than 5 years ago.

      3. Not sure what your point is. If one wants to stay in the firms, one accepts that compensation is NOT tied to real or even perceived market value. Instead, it is tied to other factors such as “right fit”.

      4. No. I didn’t miss this point and I disagree. You can only squeeze a lemon so much before you end up with a piece of skin. If one receives $60K now with unlawfully withheld overtime compensation, then paying that OT should not affect salary. If it does, then the firms are penalizing their staff twice — once by failing to pay OT and then again by lowering compensation when OT is paid. You and I both know that OT is free profit to the firms, and one day that chicken will come home to roost.

      5. Dude, you were the one who brought up the travel kickbacks and then tied them to the OT issue. You wrote: “The firms used those theoretical kickbacks to pay for the processing and so now they simply report both to the client and charge both to the client. For all the excitement and accusations — nothing changed and nothing was ever wrong. The overtime idea will be the same.” My point is that both are wrong and both created litigation and settlement exposure.

      Finally there is a difference between “working longer for less” and taking advantage of a lack of options to work people to the bone. It may not be illegal but it’s morally wrong.

      I would also question your use of the term “maturity” and would challenge you to look at it as “greed-based cold-hearted treatment of fellow humans as chattel.” But perhaps that’s just me, being oversensitive after a decade in the firms and seeing partners profit on the backs of the staff.

      — Tenacious T.

    72. @70 – The one premise I heard over and over again while in Big 4 was “you don’t work for the salary you earn today, but for the salary you will earn tomorrow”. In my experience, anyone in the Big 4 can leave at any point in their career and earn at least 10% more in industry. That holds true even in todays market; while hiring has slowed and jobs are harder to find, when you do find them they pay more – I speak from experience. When you factor in the better hours in industry, you are earning significantly more for your effort. Surely this is indicative of a labor market that is not operating efficiently, and the source of that inefficiency is the market power wielded by the Big 4 accounting firms.

      As an employee at the Big 4 you need to be conscious of this wage gap and ask yourself does the present value of my future cash flows of working at the firm exceed the present value of future cash flows were I to leave the firm. In the days of 10% annual increases (and the carrot of partnership eventually), the math was definitely weighted in favor of the firms – I will forgoe 10% more today (and 3% annual increases in industry) in return for my current salary, plus 10% annual increases. Obviously that model no longer holds true with 0%-2% raises in Big 4. And who knows how long until those days return – I think all of the firms will continue to use the current economic problems to justify 2% raises in 2010.

      The other factor in this calculation is the risk adjusted discount rate. The uncertainty in the Big 4 has increased significantly, more so than in industry (other than the most impacted businesses like i-banking, financial guaranty insurance, etc). Before, if you served your 12-13 years you were fairly certain that the partner money truck would be pulling up to your door. Now the 12-13 years is looking more like 14-15, and then you may only get a non-equity partner (aka director) option. With all of the litigation looming, combined with the fall off in revenues now that the SOX bonanza is over, the payoff may not be as lucrative as once thought. Factor in the risk that you might be booted out before the hoped for payday if your name is on the wrong row of the spreadsheet, and you are dealing with significant uncertainty in the amount and timing of future cash flows.

      I think too often when working at the Big 4 you are focused on the task at hand – review financials, test expenses, tick the 10K, run, run, run, run – that you forget to look at your bottom line. Which is just the way the partners like it. Lift up your head. Look around. Make sure you are there for the right reasons.

    73. Casper @ 73, Thank you for rephrasing what I was trying to say, only more cogently.

      I.e., This. What Casper said.

      — Tenacious T.

    74. @73 – I don’t disagree with the outline you provide for how you should evaluate your own job decisions in light of market and salary potential. Not being an auditor, i can only say that my salary would not be higher if I left my current position. But nothing in what you say is related to the OT pay issue or whether anyone is being cheated. Offers/salary are what they are — as you indicate, a person should answer all those questions and then accept the offer that maximizes their happiness (which may be based on salary, company culture, vacation, environment, upward mobility, hours, etc…).

      @TT –

      1) we simply disagree… We disagree about how to measure value and whether value can actually be valued. I totally get that the way you value people and the way B4 leadership values people are not the same. I suspect I might agree with your valuations more often than not. I disagree that the other valuation methods and arguments are based in evil and malicious collusion or wrongdoing. I long ago gave up on living in a world where others, and specifically people in power, will agree 100% of the time with the way I value things/people. i wish my values were the ones everyone agreed with — I just have to be realistic and let go of that as something that will happen… it isn’t worth the energy to get upset about it.

      2) I agree a 20-something thinks $5K is a lot… I would hope that they can put some thought into it and realize that it isn’t. If we don’t talk about it and tell them that $5K isn’t worth the angst, then they may waste a lot of energy in that angst.

      3) I think you do understand the point, we have had the argument on how people are valued before — no need to reiterate. We disagree. I happen to think that things like “right fit” for example, exist at every firm, and that the review process is by definition subjective at all firms (no matter how hard they try to make it 100% objective – it is not). I see nothing different at the B4 regarding the process. I hate the process as much as the next person and I believe that the promotion decisions are often more wrong than right — but it isn’t a result of the process or unique to the B4. It is a result of people in power using a different measure of performance — and while I disagree with many decisions, I think the measures are usually the right things. Some people just get blinded.

      4) first — the concept that withholding OT pay is illegal is hardly a given. In my world, any job requiring a college education is salaried… I honestly do not see the argument for OT pay. As for squeezing a lemon — I agree… if the firms overall compensation (with or without OT pay) gets to the point where no one will take the job — then the market will adjust. Right now there are piles of people out there who want the job and will likely do it for less than $60K. You neglect to recognize that value is a relative term and changes over time… value is only what one is willing to pay in a particular moment in time. It is in the eye of the beholder — what one person pays a lot for the next may not. So stop trying to profess that you or anyone knows the value of themselves or their co-workers… you don’t. All you know is what your firm is willing to pay you — and sometimes you learn what others will pay for you — and then you make a decision.

      5) I grant you the travel kickbacks was a poor analogy – the point I wanted to make was not made… can we let that go and I’ll just say my bad. My point was that I am not making a statement on the legality or fairness of OT pay or lack thereof. I have made a statement here that I personally don’t think it is warranted, and while I am part of the class that is involved in the suit — I will never participate in such a litigation. My comments though aren’t about what is legal or not — I will leave that to the courts to decide… and courts often surprise us all. My point is that it really doesn’t matter how the court rules — because in time the pay will adjust to the new rules… and will be what it would be regardless of whether it is a salary or hourly w/OT scenario. If the law suit serves the purpose of giving notice that people are no longer willing to do this job for that pay, then the result will be higher pay — but there are other ways to go about it. Society evolves in interesting ways… this suit may be a precursor or trigger to change — but where we disagree is in the idea that this change (should it happen) is necessary due to malicious and illegal behavior. Maybe a better analogy is when labor unions came along. At first they served a good purpose… and pay as well as conditions rose. They rose because labor made the point that they will not accept the conditions anymore. But unions have often gone too far and caused more problems than solved them. Maybe you get the concept.

    75. @Anon 75 (and @TT)

      I love the debate and I love the fact that it is probably between someone outside the US and someone I know to be in a US state that holds overtime and labor laws more strictly than many others.

      Whether one agrees with the concept of “professionals” who are college graduates and salaried as being “deserving” of overtime or whether that somehow compromises their professional status, the bottom line is that in many US states and Canada and many other countries, these laws are clear, unequivocal and on the books for a while. That the Big 4 flouted them in California, Wisconsin, Canada, and many other places in US where class action lawsuits are pending or have been settled is sort of unbelievable. But less so if one considers the economic and political clout of the firms.

      In California, PwC has effectively lost the war but is still fighting a smoldering skirmish via appeals and the slow grinding process of the courts. However, when these cases start to be settled in the US, it will mean a profound change in the model, one the firms are not prepared to make because they have stuck their heads in the sand for so long thinking they would never be called out in it. Economic hard times may force sympathy for small business but it bodes ill for big business that breaks the law and is perceived to be harming workers.


    76. @fm — I agree with your sentiment. Should the courts rule that this practice is against the law — economic times are not too sympathetic to big firms. I also agree that should the B4 lose the cases it will “profoundly change the model”… that is the point I really am trying to make. I personally believe that after the evolution to the new model (which will take some time) is completed, the staff will not experience that the overall compensation package is diffferent (granted it will differ — I just think if you compare it the way you would compare two job offers from two firms they would be equivalent) than it would have been in the old model (granting that there would be natural changes to that model sans any court ruling on OT). I just think market forces are stronger – and with time they will flatten the impact of a change in the model.

      Let me try to rephrase… consider the following two options:

      1) court case rules OT must be paid — base salaries are adjusted, vacation benefits, medical benefits, etc, etc are all adjusted some how over say a 5 year period. At the same time economic forces may impact the supply/demand situation which will also impact how the decisions are made regarding these adjustments. So, suppose suddenly there is more demand and less supply – salaries and benefot packages would improve, so the adjustments made to the model would be an overall improvement. Or, suppose demand continues to fall and supply stays high — then the adjustments will not look like an improvement

      2) stay with the old model — if the supply/demand changes mentioned above happen — the same positive/negative impacts would be observed.

      In the end — if you look at the overall compensation package and work environment… I would expect that a reasonable person would deem them comparable or equivalent. You can never test my theory — because only one of these scenarios will actually happen and we cannot change history. But that is my opinion.

    77. @ 75 – In response to point 4: One thing to keep in mind… A staff accountant at a big 4 firm is not a position that “requires” a college education. Granted, firms may only hire people who have a college education, but it is not required. You don’t need to have a CPA. While the firms may hire people who have college education and who are eligible for a CPA, that doesn’t mean it’s a requirement. Theoretically the firms could hire someone to be a permanent staff accountant who only has an associates degree (and some small firms may actually do this). Think of it like nurses. In alot of areas, nurses are hourly employees who can earn overtime. Many of them have gone to college. However, it is possible to be a nurse without going to college (LPN, etc). So as a result, they fall into the bucket of being hourly. So I think there is an argument that staff accountants may be in a position where they should be hourly employees.

      As a disclaimer, I was a staff accountant at one point and never thought I should be paid hourly. You think pressure is bad on audit engagements to control hours now… just imagine how bad it will be if those extra hours are actually costing partners money

    78. @78 — I get your point. What you are telling me then is that all these staff accountants are actually under-employed. They are over educated for the position. So to play devil’s advocate — does that mean they are being overpaid, because they are being paid for qualifications that are not required to perform the job? If that is the case, then I fear winning the OT law suit will mean they will get a serious reduction in pay. I understand that the staff accountants are used for copying and getting lunch and other things that do not require a college degree — so in that sense I would agree with you. But if this is the argument then it is clear that they are being overpaid… and one could then argue that the amount of overpayment is a way to compensate for the long hours.

      I agree with your points, but they do not bode well for hoping to win this law suit (upon cursory analysis). I also agree with your thought regarding pressure to control hours. But this pressure will not increase if the hoursly rate goes down. The idea that staff accountants will maintain their current hourly rate and get OT on top of it is very unlikely IMHO.

      And to give context – I am not an accountant, but I do work at a B4.

    79. Just throwing this out there, as far as the labor market goes- Kids graduating from college right now don’t think that their labor is worth anything. We see our friends who graduated last year, who are unemployed and surfing Monster.com and Craigslist all day, and all we care about is getting a job. The Big 4 could cut first year salaries to 45k, and they could still recruit some pretty good talent. Where else is an accounting grad gonna go work, seriously? Even if no-name firms paid more, the Big 4 would still get all the top kids. Brand recognition, resume item, ego…all of the things college kids are into!

    80. @collegestudent — you are right… people value a job and job security now more than they value pay. Even those with a job are willing to work more hours for the same (or dare I say less)… if it means they have a job and have it for the foreseeable future. Right now the best thing for you to do is secure a job with anyone at any pay and ride out the recession. Try to get a better name firm because that will help you after the recession ends moreso than the pay you get between now and then. Are the firms abusing you — I’m sure people will say they are. Are the firms hurting too — sure. But why worry about what is fair and equitable… get out there and you can get a job.

      My group is hiring. That said — it is harder to hire new grads right now… due to the firm’s recruiting red tape/procedures… but the job market is opening up. We just brought on 3 new college grads, made offers to 2 for next year, and have requisitions open. My advise — learn computer skills… be an expert at Excel, know some SQL or at least Access… and look into the non-audit practices (internal audit, IT audit, forensics) understand how to work with data (large amounts of data).

    81. @ 79 – 78 here. I never said staff would make more on an hourly basis, my guess is they’d probably get the same (or the way things have been going potentially a little lower). It could hurt the firms a little from a recruiting perspective if they have to publish what their base is and then show exactly how muh overtime is expected to prove out what they project to pay incoming staff. Even proving that out I think it will make the job less attractive since $30 – 40K base will seem like peanuts, even though you get overtime.

    82. @82 — I think we agree. I was indicating proposing a hypothetical to you. The hypothetical is that if your statement is correct that a college degree is not needed, then one could argue they are overpaid and the hourly rate would be lower. So if they worked a 2080 hour year they would get the $40K you refer to and with overtime they would get $60K they are used to now. Hourly employees are generally not paid the base pay that salaried employees get. Part of the reason is because they do get OT and salaried employees to OT on their own dime. How can one expect to convert from salaried to hourly and have the base pay remain the same — i just cannot see how that expectation is realistic. When recruiting you discuss overall compensation not base pay only. When reviewing offers — candidates should look at the entire picture. If I was told I would have a base pay of $40K and with near 100% certainty enough OT to bring that to $60K and some chance of more… I might like that better than a known base pay of $60K with no OT. It is a risk — the OT model could get me $50K or could get me $80K depending one what happens. Further, how can you justify associates making as much as sr associates, and sr associates making as much as managers… granted that happens even now (as the salary ranges overlap)… but if it is on a regular basis due to OT — they what is the incentive to get promoted to manager. It is simply unrealistic to believe that base pay will stay the same and OT will be added on top of that — if that is the case then many managers will ask for a demotion.

      It goes back to market forces — if people will do the job for $60K then the pay will be $60K regardless of whether it is salaried or hourly.

    83. @82 – an additional note. OT will encourage managers to use the most efficient people. This can be a good thing… but the point is that person A might not be as good as person B. In the salaried model, management is encouraged to work with the slower people and train them to do better and work faster. In an OT model — the most efficient will get the OT and thus within the job title there will be larger gaps in pay. So efficient person A may get paid significantly more than inefficient person B. I can clearly see that that is a good thing. But the fact that person B will likely not get the proper mentoring and training isn’t a good thing. Person B might be a great employee with a little coaching — and in an hourly model that is not going to be as easy to justify.

    84. We are forgetting something important in the recent OT discussions. You’re all so focused on what you’re going to get paid you’re forgetting about the economics of the business model.

      Auditors travel a lot. One of the biggest challenges for any firm that has to pay overtime is to negotiate the right rates with the client when there is uncertainty whether the work can be performed by all local staff, traveling staff (who may have to be paid OT to travel) and salaried versus hourly staff. At Jefferson Wells, there was a built-in huge disincentive to use project (hourly ) staff versus the salaried staff and staff from other offices when you ran out locally if the engagement involved a lot of travel or uncertainty over number of hours required each week. That meant local offices built up staff to restrict OT and excessive hourly and nonreimbursed travel costs rather than using staff on the bench on another office when a client expanded an engagement temporarily or permanently. (Or else they went significantly over budget with low margins. ) The Big 4 firms already have this disincentive to some extent because of their geographic focus and how they reward partners, but it will be exacerbated with OT changing how staff is recruited, deployed (what if one state mandates OT and another doesn’t?) and as a previous commenter stated, paid and promoted.

    85. @fm – great comments… the model will change dramatically in so many ways other than just pay. I personally believe that it is likely staff overall pay will remain comparable. But i also think that it will be unevenly distributed to individuals based on locality, deployment issues, individual work efficiency, and much more. And I also believe that the promotion process will not be as straight forward when making the leap to manager. That leap will become much more difficult to make.

      It may be cheaper to maintain a larger staff at low base pay, even when many are on the bench… than to ship staff around and load balance nationwide if one has to pay OT.

      Your thoughts are very interesting — and still imply to me that winning the OT case will not be a good thing for staff (other than the staff that have left the firms already).

    86. Fran,

      I like your point, which is that the profit formula will need to change if OT gets paid or if staff are considered non-exempt under FLSA until they get CPAs. It used to be that labor costs were fixed and one focused on managing utilization and realization. Under the potential future state, labor costs could well become variable, which would certainly complicate the profit equation. Partners might actually have to job cost, and manage real costs instead of “standard” or fictitious engagement costs.

      Anonymous @ 86 seems to be struggling with the concept of managing variable labor costs, and suggests that a larger staff at lower compensation is one solution to reducing or eliminating the variability. He/she might be right. Who knows? But based on my experience with Big 4 partners, precious few of them will be able to deal with any more variability in their business model.

      — Tenacious T.

    87. @86 is not confused at all… he/she is suggesting that if travel becomes an issue and you have to use local staff as FM suggests, and if variability of state laws also results in a new variable to manage — one thing they might be forced to do is have a larger local staff that is paid less because they cannot load balance across states.

      Seems @TT only listens when FM speaks — when others say the same thing in different words or suggest more hypothetical ramifications… apparently they simply are confused.

    88. Anonymous @ 86,

      Nowhere in my post will you find the word “confused”. Period. Your post starts with a mischaracterization of my comments, and then descends into non sequitor from there.

      Attention to detail. I’m told it’s important.

      For instance, notice the part where I say, “He/she might be right.” That’s the part that indicates I was “listening to you speak” (alternatively: reading your words).

      No need to get all defensive. When I was discussing my impressions of Big 4 partners, I was generalizing. I wasn’t talking about YOU. I’m sure YOU are a strong manager with a good grasp of engagement economics.

      Land sakes alive. Did your units get cut again, or what?

      — Tenacious T.

    89. Does anyone know if raises or bonus will be back at the Big4 this year? What about a mass exodus once industry starts recruiting again?

    90. @87 — variable cost is not an issue in the current model. Clearly staff and management make variable pay and are billed out at some % of standard rates. The difference between their pay and billing rates is variable per person, but generally falls within a range. That said — I know we have sr consultant staff members making anywhere from around $70K-$110K… so the range is relatively wide. I know we have managers making $90K-$170K… a pretty wide range again. So the profit per person is variable. So OT adds in a minor element — that for a given individual the profit margin may change depending on when they work and in what state they work. None of that is new or any harder to manage to than what they currently manage to. The way they do it is not by person by job by hour — they do blended rates and figure in the end there are certain metrics that work. Those metrics may change — but it is easier (and more cost effective) to manage to those blends and overall guidelines than spend the time to estimate at such a specific level when that level of specificity will never prove 100% accurate or even any more accurate than the way they do it now.

      If you have clients unwilling to incur travel costs, and the only local staff would be paid at 1.5 or 2 times base hourly rate — they will start out accepting some overtime. But when there is enough work to justify the overhead of carrying more people, and enough work to keep them busy at some reasonable %age that will cover their base pay plus a reasonable margin — then they will just hire more at a lower base pay and fewer people will actually get that OT pay. Maybe they would consider making it shift work too. All these doors are opened once you go to an hourly w/OT model.

      If there is a way to sum up all this into one point — it is that lots of doors open as to how they will adjust the business model… most that I see are not favorable to the staff. Talk to some hourly workers — see if they get the treatment you think staff accountants will get if OT is instituted. They get lower pay, shift work, less flexibility in when/how/where they work, less opportunities to move up, have to punch timeclocks, and OT is highly monitored. For what reason do you believe that making staff accountants hourly will put them in a better position than they are in now (whether or not OT is required by law).

    91. Question — for all the OT talk indicating that staff remains hourly until they get a CPA — what happens for the advisory and other staff that may never get a CPA and will never ned one?

    92. @ 92

      Most of the US state laws (out side the US is much different and much more supportive of workers) focus on two main criteria: Licensing (which implies professional) and/or involvement in supervisory or independent judgment activities. You’d have to read the laws in the state you’re in to know for sure what the criteria is. But, in general, if you are performwing a job where you have no control over your activities, exercise no independent judgement and do not manage or control others, you may be considered non-exempt, meaning eligible for overtime. Unfortunately, custom, lack of resources, and in the case of the audit firms, political clout has diluted both the desire of folks to complain and the appetite of the the agencies to enforce wage and hour laws in all cases.

      Advisory and other staff who are not CPAs typically fall into two categories in the firms – client service and non-client service. Client service staff are the ones who because of custom and clout hardly ever get overtime, (considered exempt) although in other kinds of companies, sales and other “professional” level staff have successfully claimed it under law. Non-client service staff fall into two categories just like in any other company – workers and management. Where that line is finally drawn is up to you, but there are non-client service full time employees in the audit firms who do get paid overtime. Not a lot, but they do, depending on the state and in some cases union representation, although that is very rare.

      Interestingly enough smaller and regional accounting firms typically do pay overtime to client service staff until they receive their CPA. (And all the firms, I believe, pay overtime to interns.) The smaller firms are more vulnerable to enforcement, do not feel they have the clout to take chance with state laws, and feel that gives them competitive edge over larger firm when it comes down to pay for work performed and a true work-life family balance atmosphere. In other words, there is an element of “voluntary” built in to working ungodly amounts of overtime because you are being compensated specifically for it and it can be clearly valued and costed.


    93. @fm — makes sense. I don’t think there is too much difficulty defining those employees with management responsibilities. But the terms “no control over your activities” and “exercise no independent judgement” are quite a challenge to define. I would not say that our staff (advisory) have no control and exercise no judgement. But I could be convinced that could be true in audit based on what I am told about that environment. I would continue to question, though, that if these things are true – then are these staff members currently overpaid?

      I also agree that the US has become a challenging work environment – usually favoring employers over employees. This is a pendulum swing though — the unions were once very necessary, then they went too far, now we are at another crossroads in labor laws and work environments… with most Americans working excessive hours. But part of that is simply cultural — we are raised to define ourselves by our career and to gain self importance by how much our employer needs us. We have to address all parts of the equation. You can also argue that for all the hours Americans put in they are paid more than those in other countries and have a higher standard of living. Of course that may be changing too.

    94. Thanks so much for the post! I’m trying to compare offers, does anyone have salary figures for NYC metro this year for the big 4?

    95. Being an undergrad student who is interested in the Big 4 as a starting position, this article really informed me well. Regarding starting salaries, is it really prudent to challenge the partner who has just given you an offer to renegotiate? @42, the “magic sentence” almost seems too risky to utter under the pressure of a senior exec meeting. I would probably air on the side of caution in that case. I agree with many of you that freshly graduated analysts have little to no leverage in such negotiations. Also, how significant is the COLA difference between DC and NYC (the two areas in which I’m considering to settle post-undergrad)?

    96. As an undergrad you really have no leverage. What is that you think you bring to the table more than any other undergrad? Starting out, everyone in the same area gets the same package.

    97. 1st yr associate at PwC in NY area is $56k plus $3k bonus (with MBA in accounting)….pretty sad but expected given that my resume is now GOLD

    98. received my offer in feb 2008 from PwC/advisory in nyc as associate. i accepted the offer of 75K base with $3500 sign-on bonus for a total of $78500 for my first year. of course, given the economy i didn’t get a raise this past review cycle. oh well, can’t complain. 75K isn’t too bad – fyi i have 2 masters degrees.

    99. Offered $50K first year + Becker Review + CPA Exam fees + Benefits + $5K bonus if the exam is passed within a year. I was also given the option of starting in July or Sept/Oct…

      Was a little upset that there wasnt a signing bonus, but I’m with @97… I feel like my resume will soon be golden…

    100. I have a crazy idea all of a sudden. We all know that Auditing most corporations is done between September and May; why haven’t any firms considered structuring the working year that way? Think about it. Workers could keep benefits during the “off” months, and receive a lower salary or nothing at all.

      First of all, working year-round is hard for most new grads to deal with. Secondly, this will deal with the problem of under utilization during the summer – firms can create a similar system for employees in practices where client work is scheduled differently e.g. not-for-profit audits. Finally, firms are already doing this, by allowing people to go on unpaid leave with their benefits. I wish I could afford to do it, personally. I would get so much other stuff done in 1-3 months and might be even more energized when I come back to work. I think firms need to analyze one or more of their offices, and try this as an experiment. Any ideas?

    101. @100 – The firms have been activly managing their headcounts for the past year and a half through a number of inovative measures. the primary way seems to be severance packages. Thanks to federal laws, everyone they have let go is entitled to continue their health insurance [unless of course you are here on an working visa, in which case you are given a plane ticket]. These persons are more than welcome to apply again for jobs at a later date, assuming they want too.

      On a more serious note, there is year round work in the auding profession, you just need to know where to look for your billable hours to ensure you have client work year round(reviews, EBPs, non-public company audits…..).

    102. anyone know what first year manager base compensation is for NYC EY, PWC, DT, and KPMG???

    103. Similar to 102…anyone know first year Mgr base compensation in the San diego/San Jose office for big 4?

    104. @ 102… From the previous 2 (09 & ’10) compensation calls at D&T in the NYC metro area, the base for new Managers is between 82-85K. Not sure what the figures are for the other Big4 but I would imagine that it is pretty identical.

    105. The indentured servants who came over on the Mayflower got paid better than the Deloitte New York office.

    106. @Anonymous

      Ha. :)

    107. @105 – HAHAHA…very nice

    108. Does anyone know what a Senior 3 should expect to make in NYC at PWC or Deloitte in Assurance or Internal Audit? I am moving from Boston to NYC from a “second tier” national firm and looking to join a Big 4, going into my third year as a Senior (going into my fifth year overall). I know that the pricing is different because of the cost of living adjustment as well so I wasn’t sure what I should be expecting.

      Thank you!

    109. Australian Big4 graduate salaries all average around $55,000 p.a. with 4 weeks paid annual leave (as required by Australian labour regulations).

    110. In NYC a third year senior should make US$75K plus variable pay ($7500) if you are lucky. The only challenge will be you will be moving from a second tier audit firm the Recruiters at the Big 4 can often be snooty and they get a kick out of making stingy offers from folks from non Big 4 firms.. therefore you may not be offered this much..

      Also, I have a phenomenal line of site of how starting salaries are determined by the BIG 4 firms in the US and currently its not a collusion game, actually most of them get their data from Tower Perrin and though i believe most of them would like to start the kids out at 50K its competition triggered by one firm which is a bit out of line forcing the others to play catch up.

    111. In my 6th season at Arthur Andersen’s NYC Financial Markets audit division, I found myself being billed to clients at over $400 an hour as an acting audit manager and taking home less than $30 an hour. I had a degree from NYU Business, graduating 3 terms Dean’s List and only exceeds ratings as an auditor and consultant. I earned less than 1/3 of the salary of a starting lawyer, while being billed out at over 13 times my take home salary.

      Auditors should not so underpaid.

      Auditors should also not be primarily inexperienced qualified with only a recent university degree. but should be those with decades of experience who fully understand and have experienced the industries they are reviewing financially. The big 4 should recruit from industry, not from the university.

      The current system is in tremendous need of reform.

    112. Why do entry-level auditors need “decades of experience” and to fully understand the industry they are reviewing? If anything, a college degree is too much to ask of a first year auditor. Much of the work staff and seniors do could be performed by bright high school students or outstanding middle/elementary school students. Most of what auditors at these levels do is reformat the spreadsheets provided by the client into a clear and understandable format (read: the format used during the prior year’s audit) so that the higher-ups can make effective decisions. Having decades of experience in industry would completely overqualify you for the type of work you do as a staff.

      I agree that there are plenty of things wrong with the current public accounting model, but placing an emphasis on hiring from industry instead of from college would not solve them.

    113. @1st Year Staff

      I think you actually make his point. The reason being is that the work done by 1st year staff should not actually just be stuff that can be done by a highschooler. What ends up happening is that in the complex corporate world of business and ever changing complexity of transactions, you essentially only have 2 lines of defense (the Manager and the Partner) instead of 4 (the associates, seniors, managers and Partners). Given that the individuals with the most exposure to the day to day audit are the seniors and staff (who are performing the grunt work and interviewing the personnel), losing this line of defense can be costly to the overall quality of the audit.

      As someone who had some industry experience myself before going into audit, I can say that the way I approached things was very different than my peers. Having implemented a accounting information system prior to auditing, my view of a company’s control over their information system integration after an acquisition was much different than if I had never seen one actually done.

      The previous experience allows you to see the big picture much faster as well as appreciate some of the difficulties that real companies face. While I think it’s unrealistic to require previous experience (given much of what is currently expected of initial staff and seniors as well as their pay), if the goal is overall audit quality, then it could only help.

    114. Hi, following up on the above, I thought it maybe useful for folks to have a perspective of what the BIG 4 salaries are in emerging markets like India the numbers i give below are fairly consistent across the Big 4 and have reasonably fact checked for India member firms of these international firms.

      Associate – [ INR 500,000-600,000] US$10K-12K
      Senior : – [800,000-950,000] (starting) US$16K-19,000]
      Manager – [INR 1,500,000-1,650,000] starting [US$30K]

      Senior Mgr [INR 2million-2.2 million] starting
      Director [ INR 3.5 million- 4.5 million] starting [US$70K]
      Partner [ INR 8 to 10 million] -US$200K

      Enjoy where will you get such a handy ready recknor. Needless to say all these emerging market guys having costs of living which is comporable to their counterparts in the west as cars, cellphones, fuel, TV cost the same or a lot more in emerging markets than in the US due to high VAT and custom duties and these guys have to work much longer hours getting paid so much lesser. cheers

    115. A Big 4 first year in St. L is making 48-52k start, 2-4k signing bonus, 5k cpa bonus if passed within 2 years, all testing and licensing materials paid or reimbursed.

      Also, a retention bonus was recently passed to incent longer stays. Bonus pays about 15k over 2-3 years if you stay from start until manager. This bonus is payable once promoted to manager.

    116. So, just to make sure I have this right:

      E&Y: $60k + $5k bonus

      An undergrad is looking at $3k to $5k less on the starting salary? The majority of hires are undergrad so it is surprising that the salary focus of this article is grad students. Grad students, typically those with non finance undergrad degrees, usually have less finance/accounting under their belts than undergrad accounting students. While they do get higher pay ($3k-$5k) to compensate them for the add’l years of schooling/experience, they are often not worth the bump in salary. An undergrad student (with maturity) can easily do as well, job performance wise, as a grad student.

      FOR THOSE NEW STAFFERS AND SENIOR ASSOCIATES, hang in there. Don’t focus on this short term pay-back of starting salaries. The experience gained from those first two to five years with the BIG 4 are significantly more valuable than the pay you receive.

    117. Wow! is that $3-5k a month? Because over here in Malaysia we get RM 2800 a month for students with a Degree and a Professional Qualification. That is around $912 per month (with the current exchange rate). You guys are blessed. I wish I could work there someday

    118. I just got an offer from Deloitte, for about $57k + $5 bonus, I tried to negotiate but it did not work, I was told that this is there best offer, I will be taking about $20k less than what I currently make as a corporate accountant, I have an MBA and I have already passed the CPA (I need the CPA hours though). I really wanted to be in public accountant so one day I could be either a partner or have my own firm.

    119. Just wanted to share a 2012 update. I work at a Big 4 in their IT Audit group. My understanding is we’re paid at a higher rate than our financial counterparts because we are “specialists” (which is unfair, because I think you people in financial audit are smarter and work much harder :)).

      I’ve been with the firm two years, started in 2010 at ~50K, and just learned that my new salary will be ~59K when promoted to Senior 1 in the coming months. If the numbers from prior year posts above are accurate, it seems that salaries have taken a beating. Although, its fair to mention I’m in the south west with a lower cost of living than say NYC or CA. Complaining aside, my salary is enough for me to live comfortably as a single individual. Obviously, more would be welcome – but I can live without it.

      To those that may consider complaining, realize that 50K puts you at the 57th percentile of income overall and 87th percentile for a single earner (at least, according to http://taxpolicycenter.org/numbers/displayatab.cfm?DocID=2970) – I’m sure it varies somewhat depending on who’s chart you’re looking at. You’re not in a bad place (that’s what I keep telling myself :)).

    120. @Anonymous

      Thanks for that update. And that dose of good sense. :)

    121. 1) Can anyone speak to starting compensation in audit at a Big 4 in the Bay Area or other large metro for a former intern and new graduate with 150 hours (finance and account) but no masters? Does the hourly rate during the internship accurately reflect what the salary will be when it is projected across an entire year at 40 hours per week?

      2) I am not to so naive as to think that as a first year I am worth gold, but first year comprehensive compensation should reflect the extra working hours during busy season that are not payed at overtime.

      I realize that compensation is what it is, but I would like to have an idea about what my financial situation will look like when I begin working in a city that has one of the highest costs of living in the US.

      Thanks for the consideration!

    122. I would love to know info about San Fran also, but for a different set of circumstances. If anyone could give me a tidbit of advice it would be much appreciated.

      2012 – Finish Master’s of Accountancy program (on pace to graduate with a 3.7 to 3.9, currently 3.9)
      2013- December (2012) to March internship
      2013 – March to December (Take/Pass the CPA)
      2014 – December/January start full-time job.

      My question is what should I look for in an internship? Also, what salary could i expect for San Francisco for a full-time position?


    123. 60,000 no master in NYC in tax. First year.