Do accountants make more money in practice or industry?

An average accountant earns £62K in the UK, but there are different variables to consider here if you’re looking to maximise your earning potential which has been brought to light by a recent Accountancy Age UK Salary report.

For those eager to get a quick view of the data, we’ve summarised the key findings:

• The average salary is 24% higher in industry (£68K) compared to that in practice (£55K).
• The average value of financial benefits received by industry accountants is £13,5K whereas in practice this amounted to £4K.
• Bigger firms (between 1001 and 5000 employees) pay the most –  £73,6K on average. Companies with 11-50 employees will get you the lowest average salary, around £51K.
• If you’re a woman, you may find it easier to receive fair pay and opportunities in practice (the pay gap reached “only” 19.2% there, compared to 24.4% in the industry).
• Choose your location wisely. London accounting jobs are paid the highest with an average of £79K, whereas Wales had the lowest average salary of £41K.
• Getting qualified pays off. Those with a formal accounting qualification earned an average of £64K a year while those without earned £45K.

The data below is a snippet of the market situation at large, we’d like to add a few remarks.

The average practice accountant earns more in industry than in practice. However, the highest salaries in the market are overwhelmingly found in practice. According to Accountancy Age data,

“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.”

Another example: A Partner in a Big 4 firm in 2016 would make on average between £580K and 660K, compared it to the median CFO salary in the UK – around £99K

What’s more, as the report pointed out, there is a significantly lower gender gap observed in practice than in industry. That’s only a result/representation of a more structured progression path usually offering a more frequent opportunity for promotion as it follows a graded structure. Progression in the industry can often be quite subjective and may potentially take more time.

As mentioned before, the data only represents the large-scale trends and each instance should of course be treated case by case.

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Georgina Trudgill is an Associate Director in the Accountancy Division at Harvey John.

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