Who gets paid more, finance or accounting?

Who gets paid more, finance or accounting?

Who Gets Paid More, Finance or Accounting?

When deciding between a career in finance or accounting, salary is often one of the most significant factors to consider. Many people wonder, who gets paid more—finance professionals or accountants? Understanding the answer requires looking beyond just average salary figures and exploring the nature of each field, the skills required, education levels, job roles, and career growth opportunities. This article will dive deep into the salary differences between finance and accounting careers in the United States, providing real insights to help you make a well-informed decision.

Understanding Finance and Accounting: What’s the Difference?

Before comparing salary numbers, it’s essential to understand what finance and accounting careers involve since they serve different roles in business and organizations.

What Is Accounting?

Accounting is the process of recording, summarizing, and reporting financial transactions. Accountants focus on tracking and verifying the financial health of an organization by maintaining accurate records, preparing financial statements, and ensuring compliance with tax laws and regulations.

• Financial accounting – preparing reports for external stakeholders
• Managerial accounting – internal analysis for management decisions
• Tax accounting – handling tax returns and compliance
• Auditing – verifying financial records for accuracy and legal compliance

What Is Finance?

Finance encompasses managing assets, investments, and liabilities. Professionals in this field use financial data to develop strategies for increasing organizational value, managing risks, and allocating capital efficiently.

• Financial analysis – evaluating company performance and prospects
• Investment banking – fundraising, mergers, and acquisitions
• Corporate finance – managing company budgets and forecast planning
• Risk management – identifying and mitigating financial risks
• Personal finance – advising individuals on budget, investments, and retirement

Average Salary Comparison: Finance vs. Accounting

One of the most asked questions online is “do finance professionals earn more than accountants?” The answer depends on several factors but here is a general overview based on data from the U.S. Bureau of Labor Statistics (BLS) and other salary aggregators as of 2024.

Accounting Salary Overview

In the United States, the median annual salary for accountants and auditors is around $77,500. Entry-level positions typically start near $50,000, while experienced accountants or those with advanced certifications may earn over $100,000 annually.

• Entry-Level Accountant: $50,000 – $60,000
• Certified Public Accountant (CPA): $70,000 – $120,000+
• Accounting Manager: $90,000 – $130,000+
• Controller or CFO (Accounting-focused): Over $150,000+

Finance Salary Overview

Finance professionals often enjoy higher starting salaries compared to accounting entry-level jobs. The median annual salary for financial analysts is about $88,000, while other specialized finance roles can command significantly more.

• Entry-Level Financial Analyst: $60,000 – $70,000
• Investment Banker: $100,000 – $150,000+ (including bonuses)
• Financial Manager: $110,000 – $160,000+
• Chief Financial Officer (CFO): $150,000 – $300,000+

On average, finance professionals tend to earn more than accountants, especially as they gain experience and move into leadership or specialized roles.

Key Factors Influencing Salary Differences

The gap between finance and accounting salaries isn’t just about the job title—there are several contributing factors that influence pay in both fields.

1. Education and Certifications

Education often affects initial salary levels. Both finance and accounting careers typically require a bachelor’s degree. However, advanced certifications and degrees can boost earnings:

• Accounting: CPA (Certified Public Accountant), CMA (Certified Management Accountant), and advanced degrees like an MBA or Master’s in Accounting elevate salary prospects.
• Finance: CFA (Chartered Financial Analyst), CFP (Certified Financial Planner), MBA in Finance, and FRM (Financial Risk Manager) are popular credentials that can increase earning potential.

2. Industry and Company Size

Finance jobs in high-paying sectors, such as investment banking, hedge funds, or private equity, typically pay more than accounting roles in smaller companies or non-profits. Similarly, multinational corporations and Big Four accounting firms often offer better salaries and bonuses than smaller firms.

3. Job Role and Responsibilities

Growth roles in finance such as investment banking, portfolio management, and strategic planning often come with higher risk and longer hours but also more significant pay packages, including bonuses and commissions.

Accounting roles tend to be more structured and compliance-focused which might come with stable but comparatively moderate salaries.

4. Experience Level

Entry-level roles in both sectors tend to have modest wages, but earnings generally increase faster in finance as professionals gain experience and take on more responsibilities.

5. Location

Salary ranges vary significantly by geographic location. Finance and accounting professionals in metropolitan hubs like New York City, San Francisco, and Chicago usually earn more than those in smaller towns or rural areas due to the higher cost of living and concentration of financial services firms.

Which Career Offers Better Long-Term Earnings?

If you are considering where you can maximize your income over the long term, finance generally offers greater potential for higher pay, especially when you move into management or specialized investment roles.

• Finance: Many finance careers have unlimited bonus potential tied to company performance and personal success. Positions in corporate finance, investment management, and banking can rapidly increase your earnings.
• Accounting: While accounting salaries tend to grow steadily, they are usually capped without the same bonus potential as finance roles. However, leadership roles like CFO or partner in accounting firms are exceptions with high earning potential.

That said, a successful CPA or accounting manager at a top firm can out-earn some finance roles, especially if the accountant moves into executive-level positions.

Common Misconceptions About Finance and Accounting Salaries

There are a few myths around which field inevitably earns more:

• Myth: Accounting is always less lucrative than finance. In reality, salaries can overlap, especially with advanced credentials and senior positions.
• Myth: Any finance job pays high salaries. Entry-level finance roles without specialized skills or certifications might start lower than experienced accountants.
• Myth: Bonuses only exist in finance. While more common in finance, accounting professionals at big firms also receive bonuses based on performance.

Real-World Insights from Professionals

Based on industry surveys and job reporting sites like Glassdoor, Indeed, and PayScale, here are some insights that come directly from finance and accounting professionals:

• Finance professionals
• Accountants value job stability and predictable incomes, which appeal to many seeking consistent paychecks and benefits.
• Both fields require continuous learning and certifications to progress.
• Geographic mobility can significantly impact salary, with many professionals relocating for better opportunities in finance hubs.