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I know people get a little gun shy when talking about how much money they make, so I’m looking to do an informal poll of what your compensation or cost to your employer is vs how much you bill out.
For example.
My total cost to my employer including wages, perks, employer’s portion of payroll taxes, and health care (fully covered no deductible plan) no retirement, represents roughly 47% of what I billed in 2016.We’re all presumably on this CPA journey for more money or a bigger piece of the pie.
My understanding from talking to other small firm partners is that overhead typically runs about a third, but also this percentage is variable depending on how much you bill. The more you bill, with fixed costs remaining constant, the lower loss to overhead percentage becomes.Small firms/sole props listed for sale usually show the owner deriving 40-60% of gross, usually below 50% represents some issues in the small firm.
Large firms usually have 1/3 overhead, 1/3 salaries, and 1/3 to profit.
I’m looking to do some salary re-negotiations before tax season so I’m trying to determine if I am being piggy for being a non-CPA. There are only 2 tax preparers, myself and the CPA. Bachelors, EA and 15+ years at the same firm.
I don’t exactly have my own “book of business” as most of the clients I service have been transitioned from my boss to myself, as he continues to cut back his hours. My billings represent roughly 49% of the billings for the firm in 2016 including billings by 2 part time office staff for services like bookkeeping, payroll and sales tax. I typically work 7 days a week (Feb 1 – April 15) during tax season with Saturdays only being 5-6 hours and Sundays usually around 4 hours. My boss is lucky to pull 35 hours during tax season. My billings do not include time spent servicing his clients who call in when he is not here, plus all the other back end work I do.
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