Becoming either an Enrolled Agent (EA) or a Certified Public Accountant (CPA) will significantly impact your career, giving you the title of “trusted professional” in either the tax or accounting fields. As you weigh the two options, there’s one factor that will always stand out: salary. To help you make the best decision for your career, we’ll talk about what you can expect in terms of salary via each career path.
Before we compare salaries, we should note that EAs and CPAs don’t necessarily perform the same job. Knowing how to become either an EA or CPA, and knowing what’s in store for you once you jump into the job market, will help explain the salaries for each position.
What Is An EA?
The Enrolled Agent credential is a nationally recognized certification offered by the IRS for tax professionals. You can become an EA by obtaining a Personal Tax Identification Number (PTIN), passing all three parts of the IRS’s Special Enrollment Examination (SEE), and passing compliance and background checks. There is no specific education or work experience requirement, although candidates should have well-established tax knowledge before taking the exam.
EAs are federally authorized to represent taxpayers before the IRS and have unlimited representation rights. This means EAs can represent any taxpayer, whether they prepared their income tax return or not. They can also represent any tax matter, as well as appeal to any office of the IRS.
EAs are generally tax preparers, but they can also wear an advisory hat by providing tax compliance counseling to clients or providing written advice to third parties regarding business transactions. In general, the EA’s job is to help their clients with a variety of tax matters, from tax preparation, to representation during hearings or conferences, to helping them through audits. EAs can be seen in an office, in front of the IRS, or sitting down with clients. They work in accounting firms of all types and sizes, with many EAs starting their own businesses.
What Is A CPA?
The Certified Public Accountant license is a state-level credential offered by each State Board of Accountancy. You can become a CPA by obtaining the required education per your state (at least a bachelor’s degree), passing all four parts of the Uniform CPA Exam, gaining the necessary years of experience required by your state, and passing an ethics exam, should it be required in your state.
CPAs are elite accounting professionals that can work in every sector of the profession, from tax to audit to consulting and advisory. CPAs can also work in general business roles and can easily move horizontally or vertically within the structure of a business. CPAs are required to learn about financial accounting and reporting, tax, business law, the business environment, and audit before they can become credentialed.
CPAs can also be found in a variety of environments from large public accounting firms to local firms. CPAs, like EAs, can easily start their own small business working with clients.
While EAs and CPAs can work in similar environments and industries, the EA career is more specialized and applies more to tax professionals as opposed to the accounting profession as a whole.
EA vs CPA Salary
According to ZipRecruiter.com, the national average salary for an Enrolled Agent as of July 2019 is $57,041. Jobs paying $41,500 or less are in the 25th or less percentile range, while jobs paying more than $64,500 are in the 75th or more percentile range. Most salaries fall between $41,500 and $64,500.
As of July 2019, ZipRecruiter.com has the national average salary for CPAs as $71,979. Jobs paying $58,500 or less are in the 25th or less percentile range, while jobs paying more than $83,000 are in the 75th or more percentile range. Most salaries fall between $58,500 and $83,000.
Salaries range by city, state, and career level.
In general, CPAs earn more than EAs in all career levels. However, the CPA credential requires significantly more schooling, time, and upfront costs than the EA credential. The EA credential is also more client-focused than a CPA credential. These are both factors to weigh alongside salary numbers for each profession.
EA vs CPA Earning Potential
Another factor to consider as you choose your career path is the earning potential for both the EA credential and CPA license. While both the CPA and EA credential require tax knowledge, the EA is much more niche within the industry and geared more toward tax practitioners. The Enrolled Agent credential requires more in-depth tax knowledge than the CPA credential, meaning EAs are valuable to clients looking specifically for advice on advanced tax issues.
As demand increases for tax advice due to changes in the tax law, the demand for EAs is also going to increase. An EA who starts their own business may have a higher earning potential than the average EA or CPA salary.
Special Enrollment Exam (EA Exam) vs CPA Exam
The Special Enrollment Examination, or Enrolled Agent Exam, consists of three examinations. Each exam lasts 3.5 hours and contains 100 multiple-choice questions. Out of the 100 questions, 85 are scored and weighted equally, while 15 are experimental questions that do not count towards your score.
The CPA Exam consists of four separate exams each lasting four hours for a total of 16 hours. Each section includes multiple-choice and task-based questions, and the BEC section also includes written communication questions. Candidates must pass with a score of 75 or more on each exam section to pass, and each section must be passed within an 18-month window starting as soon as the candidate passes the first exam.
No matter which career path you decide to take, you’ll be an elite professional in the field of accounting. Weighing every factor, such as salary, lifestyle, and adherence to your personal values will help you make the right choice for a career that provides both comfort and fulfillment.