Analyzing Big 4 Partner SalariesThe Complete Guide

We get it, you want to join the Big 4 because you have dreams of making partner.

As career goals go, it’s not a bad one.

Yeah, the rewards are amazing…$300k in your first year. The potential to earn many millions more.

(It’s one reason why we’ve helped so many people get into the Big 4).

But is the Big 4 partner salary worth those years of work? Is the house in Beverly Hills attainable? In this guide we’ll discuss what a typical Big 4 partner salary really looks like.

A Big 4 Partner Salary…Isn’t a Salary

Before we dive into the detail, there are some specific things you need to know.

Partners do not earn a salary.

Yes, you read that right.

Wait, what?! So how do they get paid so much?

This is the great part…Partners actually own the Big 4.

That’s right, that PwC Partner you know…she actually owns PwC! (Granted it’s along with the other thousands of Partners, hence the title “partner”, but when firm revenues are in the billions their insane compensation starts to make sense).

Instead of a salary, Partners earn units, whose value relates to a share of the profitability of the firm for that year.

But because actual annual profits are only known at the end of each fiscal year (and because nobody wants Partners to starve…), they do receive a salary-like “advance” every month.

Buy-in Payments are Required

When new partners are promoted, they are expected to “buy-in” to the partnership.

And buy-in payments typically range from $250,000 to $1 million (although it can be as low as $50,000 in some cases).

That’s a lot of cash. What is this buy-in payment for?

The buy-in process covers some important factors which a typical employee isn’t concerned about, such as personal liability.

But essentially, the large buy-in payment is designed to make sure new partners do not leave the firm for a very long time.

The thing is, most new partners will not have millions sitting around in their checking account.

And so to make it even more difficult to leave, the firms helpfully offer an interest free loan to fund this buy-in payment.

The interest free loan is typically repayable over something like 10 years and so reduces the Big 4 Partner’s salary by approximately $25,000 to $100,000 a year.

Becoming a Partner is Just the Beginning

Admit it.

You’ve just passed your Big 4 interview and you thought that being made Partner would be the pinnacle of your Big 4 career, right?

Think again!!

Becoming a new partner is like starting your first day all over again. You are at the bottom of the pile and need to work your way up (granted you’re earning $300k/yr, but still).

There are 7 to 10 distinct partner levels within each of the Big 4, with promotion from each meaning more units.

Promotions happen in the same way as for typical Big 4 employees. You will need to work hard, bring in clients and run an effective business.

A typical partner might reach level 6 by retirement. The higher levels are reserved for the CEOs, Chairs, board members and other leaders.

It’s All About the Equity

You’ve heard about equity, right? It’s the love of entrepreneurs everywhere.

Partner’s units equal equity in the business, and their share of equity depends on a number of factors.

We mentioned “Partner level” above, but there are numerous other factors that go into determining how rich the Partner is going to get:

  1. Importance of their clients to the firm
  2. Fees earned per year
  3. Helping other employees become Partner
  4. Back office duties (such as talent leadership, risk, etc)

(Not to mention the monthly payments on the Lambo…).

This leads to some interesting scenarios. A super successful sales partner that does little else may earn the same as a board member because they bring in so much revenue. It also means that many partners earn more than their own boss (imagine that!).

The other big factor is service line.

Advisory/Consulting Partners typically earn the most because they are delivering the most value in the marketplace. With that being said, none of the service lines are skimping out when it comes to pay.

And It’s More Than Just the Money

Yes, money is important.

How else could Partners afford a Ferrari and their own Helicopter and a legit castle (true story, I actually know the Partner personally…).

But there are other factors that are often overlooked when it comes to making Partner at the Big 4.

Firstly, there’s the personal satisfaction of making it to that level. It’s fairly rare with only 2 to 3% of hires making it (though definitely not impossible, just look at the total number of new U.S. partners that PwC recently promoted).

Partners also get a lot of self worth from leading some of the largest and most successful client service organizations in the world. Not only that, they get to make a serious impact for companies of all sizes everyday.

Beyond that, Partners can expect unbelievable healthcare benefits and access to members-only clubs.

Oh and don’t forget the pension.

One of the main advantages to being Partner is the pension scheme. Partners can expect to receive around 25% of their best three year’s earning average.

That can equal hundreds of thousands of dollars a year, even millions in some cases.

Pretty awesome if you ask me.

So How Much Do Big 4 Partners Actually Make?

And now the part you’ve all been waiting for.

How much cash do Big 4 Partners make each year?

Let’s take the example of Jim Simmonds, a new partner in the New York international tax practice.

We can calculate his annual and lifetime earnings like this:

  1. Annual earnings for a new Big 4 Partner are approximately 6-7 times their Consultant salary. So let’s be generous and say Jim’s starting salary as a Partner is $420,000
  2. This is then reduced by the buy-in payment (let’s be ungenerous and charge him $100,000 per year)
  3. Jim will then go on to lead a large team and bring in average-sized client. He will also be in charge of innovation for his department. He will reach level 6 in the partner structure before he retires

Here’s a graphical representation of Jim’s career earnings:

See how it decreases some years where his practice or the firm as a whole didn’t reach its targets.

So yeah, in today’s money a typical partner can expect to earn over $11 million during their career.

Not bad, eh?

But as we said, these amounts can vary widely.

Some partners who stick to their business and don’t do much “back office” work could stagnate (in the loosest sense of the word…) at around $600,000.

On the other hand, board members and regional leaders will be well into the millions per year, up to $3 million plus for CEOs and Chairs.

In conclusion, Big 4 partner salaries can range from around $300,000 a year to $3 million plus, with the average being approximately $750,000, taking into account all new and existing partners.

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10 Comments

  1. I really enjoyed your article!! Lots of good insight and concise and useful information. As a recent college graduate, this gave me a much better understanding of what compensation at the partner level might look like (clearly something not openly discussed at college recruiting events). Thanks so much for sharing!

    Reply
    • James Whittaker

      My pleasure Sarah! You can see why getting to partner is so many people’s dream position! The perfect combination of prestige and pay.

      Reply
  2. How about those people let’s say start at age 30(different careers before) and become a partner at 50, is it worth it and retire at 60?

    When you talk about partner levels (6-10) I think what they have is Smith like this audit partner, head of audit partner, office managing partner, regional partner and national partner like for whole usa. Finally CEO which is the most senior partner of global EY etc..

    Is that right?

    Reply
    • James Whittaker

      Is it worth it? Yes, definitely. Though I think starting at 30 and becoming partner at 50 is unlikely, it’s usually 15/16 years max between the two. And yes the higher partner levels are reserved for those types of positions (managing partner, CEO). It’s certainly possible to be incredibly successful in the Big 4 if you start at 30 (I know a guy who started at 32 and is now a senior manager at 40). Sometimes experience can work in your favor when your peers are all 22 years old.

      Reply
  3. The costs I mentioned are costs of any “partner” but not for any employees unless they are self employed. Also, the $420k figure is quite high compared to actual pay for new audit and tax partners and I’m in a large market. I am assuming this includes advisory, which would skew the figures. Is this also only stating pay for the “full equity” partners only, excluding the non-equity or low equity partners who now exist at certain firms?

    Reply
    • James Whittaker

      Hi Patrick! Thanks again for contributing! I see what you’re saying now re costs (to clarify, that a partner doesn’t receive a 401k match or subsidized medical insurance from their employer, so will have to shell out comparatively more). And yes, these figures are aggregate, so that’s why the starting pay may be on the high side based on your understanding. We have mentioned pay disparity between service lines and also directors and non-equity partners in our complimentary Big 4 Salary Guide. But I think it’d be worth mentioning here too though. Thanks for your input!

      Reply
  4. This is not very realistic to show a graph with 25 years at the partner level. Assume the person makes partner at age 37 or 38 after 15 years with the firm. Very few partners will stay until the mandatory retirement age, which at some firms is 60. Many will be forced out or retire quite a bit earlier than 60 as well (53-56) so 15-20 years as partner are a better comparison. Your $420K is high for starting pay too and doesn’t discuss the other costs involved (pay your own payroll taxes, 401k match, full freight medical insurance costs, etc).

    Reply
    • James Whittaker

      Thanks Patrick for your comment! It seems like you have experience of this so good to hear from you.

      I tend to agree with what you’re saying about the time span, 25 years would be a long time at partner…although 15 as you suggest would be on the low end. The chart is just there as an example of what “could” be earned assuming everything was done by the book (that is, join at 22 from college, 13 years to partner which is fairly typical and then 25 years until 60). As I mentioned in the article there will be huge variation depending on many factors. For starting pay, our research showed $420k to be the median figure, but again will depend on various factors and I appreciate your comment. And finally the costs you mention are typical of any worker (taxes, 401k, medical) so aren’t special to partner and therefore not relevant here. We’re showing what a partner would earn, not their take home pay.

      Reply
  5. Hey thank you for the article very interesting !
    What about partners in the People Advisory Services ? How do they bring in new business ? Aren’t professionals in this business line only involved in recruiting and managing pay, and others internal processes ?

    Reply
    • James Whittaker

      Hey John, thanks for the comment! So People Advisory Services is an EY service which consults to external businesses on their talent and workforce issues. Those partners definitely do win business. I think you mean partners in “internal services” at the Big 4, such as HR, risk mgmt, etc. In that case you’re right, those partners don’t win external business. There’s two reasons for that. Either these partners are very senior and have worked in the client field for a long time and their skills are such that they are just as valuable working internally at a senior level. Or occasionally a very skilled external person (say an HR director from a Fortune 100 company) will be brought into the business at partner level. These “internal” partners will be judged on factors other than revenue earned, such as reducing employee turnover.

      Reply

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