Author : Lucy Skoulding | Reporter
The average UK accountant earns a salary of £62,042, but this varies hugely depending on factors such as gender, location, level, company size, and sector
In a recent survey, Accountancy Age asked its audience all about their salaries, with industry and practice accountants from a range of sectors responding to highlight some important facts about pay in the accounting profession. The results of this salary survey will help to both bust myths and highlight problems in the industry.
Whether you’re considering an accountancy career or already have one, this report will help you understand more about the salaries involved, compare where you currently sit against the industry average, and make the professional choices that are right for you.
The accountancy profession
Our survey revealed that the average salary for an accountant in the UK is £62,042 a year. This figure accounted for salaries from the part-qualified level all the way up to senior managers and partners.
Part-qualified accountants who responded to our survey earn anywhere between £11,975 and £95,000 a year.
Interestingly, 11.6% of respondents overall did not have any formal accounting qualifications. Most of these individuals earned salaries at the lower end of the spectrum, but there were six respondents without qualifications being paid over £100,000 a year.
This said, those with a formal accounting qualification earned an average of £64,220 a year while those without earned £45,974.
The top earner in this survey was a partner in an accountancy firm earning £400,000. Of those respondents with annual basic salaries over £200,000, all but one had formal accounting qualifications and they were all either working at experienced or senior levels in roles such as audit partner and managing director.
It is easy to overlook the extra financial benefits that accountants receive on top of their basic salaries. On average, a UK accountant receives the equivalent of £9,110 a year in other financial benefits.
Pension contributions was the most likely benefit, applying to 69% of respondents. Other financial benefits included gym membership, health care, flexible working, cash bonus, childcare vouchers, car allowance, and travel loans.
The most common practice area for accountants responding to our survey was audit. One in five respondents said they worked in audit, with corporate tax being the next most popular practice area.
With regard to accountants in industry, manufacturing was the most likely sector, with 10% of respondents working in this area. Charity/non-profit and banking were other popular sectors.
Industry vs Practice
The balance between industry and practice accountants who responded to our survey was fairly equal. Industry accountants made up 54% of respondents and practice comprised 46%.
Our survey found that the average salary in accounting is 24% higher in industry than in practice. Numerically, industry accountants will earn an average of £68,004 while accountants in practice will earn £55,030.
Practice displayed both the lowest salary of all the responses (£11,975) and the highest salary (£400,000). Industry was more balanced, with the lowest salary being £20,000 and the highest salary being £225,000.
The difference between other financial benefits received by industry accountants and practice accountants is even higher. The average value of financial benefits received by industry accountants was £13,499 whereas in practice this amounted to £4,094.
Industry accountants were much more likely to have professional accounting qualifications than their counterparts in practice. Only 8.4% of accountants in industry had no qualification, compared to 15.4% of practice accountants.
Industry and practice accounting were similar when it came to salary growth. In both groups, most of the respondents felt their salaries would grow by 1-5% in the next year.
According to the survey’s respondents, the work-life balance was marginally better for practice accountants, who worked an average of 42.09 hours a week compared with industry accountants working an average of 43.05 hours a week. This said, the respondents who worked the most hours a week, at 80, were all practice accountants.
The gender pay gap
Accountancy Age has found a gender pay gap of 21.5% overall in the accounting profession, which places accountancy above the national average gender pay gap of 18.4%.
Men earned an average of £66,646 while woman earned £53,688, a difference of £12,958 a year.
The pay gap in practice accountancy was slightly lower, with men earning 19.2% more than women at £58,443 and £48,207 respectively.
However, in industry the difference is significantly more. The average salary for men was £73,957 while a earned an average of £57,893. This amounted to a significant pay gap of 24.4%.
Despite earning a lot less than men, women were more likely to hold a professional accounting qualification. Out of the survey respondents, 13.9% of men did not have a formal qualification compared to only 7.33% of women.
Men’s other financial benefits amounted to £10,273 on average while women’s were £3,206 less a year at £7,067.
The survey found that women worked fewer hours on average per week than men, though the difference was minimal at 0.81 hours. Men were working 42.9 hours a week, while women were working 42.09 hours every week.
We delved into the gender pay gap at different levels of experience and found that the gap widened as the professional level increased.
In the part qualified group, the gender pay gap was 1.3% in favour of women. Women were earning £28,901 and men were paid £28,525.
However, men overtook women at newly qualified level and the difference increased from there onwards.
Newly qualified male accountants earned £39,790, compared with newly qualified female accountants, who earned £36,019 annually.
The pay gap significantly widened at the experienced level, where in roles such as manager or team leader, the gender pay gap was 21.4%. Women earned an average salary of £51,766 a year while men earned £64,183.
This continued to senior level accountancy jobs. In roles like partner and financial controller, the pay gap was 19.5%. Women earned £14,214 a year less than men on average at this level of work.
Other factors to consider
Progression is an important factor to consider in any career, and the survey demonstrated that individuals can take advantage of good career progression prospects in accountancy.
The average salary for part-qualified accountants is £28,691, which is an excellent incentive for those starting out in the industry. Averagely, salaries will rise to £38,129 once an accountant qualifies.
Once an individual has gained a few years of experience they will likely receive an improved remuneration package. Experienced level accountants in roles such as team leader and senior associate could expect to earn an average basic salary of £59,709 a year.
As soon as senior level has been achieved – working in finance director, financial controller, or partner roles, individuals can expect a basic average salary of £75,707, plus additional financial benefits. At senior level these benefits will average £14,179 a year.
Salaries fluctuate quite significantly between regions. London accounting jobs are paid the highest with an average of £79,207, compared with the overall average of £62,042. In contrast, Wales had the lowest average salary, of £41,129.
In terms of company size, companies with between 1001 and 5000 employees paid the highest average salary, at £73,609. Companies with 11-50 employees, however, had the lowest average salary, at £51,057.
Attitudes towards salaries
How we feel about our salaries is important to job satisfaction. While lots of factors contribute to whether we enjoy our jobs, how we are rewarded will always play a critical role.
We asked our audience about how they felt about their current remuneration package and how they expected their salary to change in the coming year.
Two thirds of respondents were confident that their salaries would increase next year, compared with 31% who believed it would remain the same and only 1% who thought it would decrease.
Two thirds (66%) of women who answered the survey thought their salaries would increase, compared to 68% of men.
On average, respondents predicted that their pay would increase by £3,045 in the next year. Women predicted their salaries would increase by £3,417, while men thought theirs would rise by £2,862.
We also asked respondents how they believed their salary compared to the industry average. Overall, people thought their salaries were below average. The majority of men, however, thought their salaries were in line with the average, whereas almost half of the women who answered the survey thought their salary was below average.
The results changed when we asked if people thought their salaries were fair. Overall, the majority of people responded positively, believing their salary to be fair, compared to 41% of people who disagreed.
When filtered by gender, 46% of women and 38% of men thought that they weren’t fairly paid.
In addition, the majority of respondents believed their company operated an equal pay policy; only 21% felt that one was not in place. Of the respondents who said no, 48% were women and 52% were men.
Accountancy Age’s annual salary survey has revealed a number of issues within the sector as well as highlighting how well accountants can be remunerated for dedication to the industry.
While UK accountants earn an average annual salary of £62,042, this can vary widely depending on your gender, location, level, sector, and whether you work in practice or industry.
The accountancy gender pay gap is 21.5%, which is over 3% above the national average. Since it became the law for companies with over 250 staff to publish their gender pay gap reportsfrom 4 April this year, gender equality is an issue which the accountancy profession needs to turn its attention to.
Emma Smith, managing editor of Accountancy Age, said: “The results of the Accountancy Age Salary Survey demonstrate that the accountancy sector has much work to do to close the gender pay gap and ensure that women have the same career opportunities as their male counterparts.
“While the top accountancy firms have committed to improving gender diversity at senior levels, the profession as a whole needs to closely collaborate to advance dialogue on how real progress can be made.”
*The results were taken from a pool of 750 responses, from individuals who worked for 35 or more hours a week and earned £11,500 or more annually.