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The average exceeds $1 million. If you think you can attain partnership, stick with it.....for many reasons, just one of which is financial security. It's a great career!
Good luck!
I roll my eyes in disbelief when people who don't know the facts make bold and incorrect statements on here.
The average mid level partner has K1 earnings in excess of $1 million, especially after the last few years.
Yes it's true that partners pay the extra se taxes. Keep in mind that there is a cap on ss piece making the max difference vs an employee small. The medicare portion is small percentage ensuring its also small. The incremental tax on $1 million is not much. Some people like to wave the extra taxes like a huge red flag banner suggesting that earning $1 mil as a partner is a misleading number. Same with the need to pay Healthcare premiums. It's already pointed out above that buying into the partnership and funding retirement are simply investing in your own assets.
Why the need to make it seem like being a partner is not a financial win. I have more colleagues who have built generational wealth from partner earnings than client entrepreneurs. Many partners, if they have not lived beyond their means, will retire with a net worth of $10 mil or more. Many have 15-20 mil (especially with market returns in recent years). Yes, some in private industry hit it big, but they are fewer and farther between. The vast majority of partners do great. While not guaranteed, the earnings are predictable, at low relatively low risk and have a history of meaningful growth.
It may be a tough profession, it may be stressful, it may be difficult, etc, but it is lucrative. Those who suggest is isn't are making guesses from the outside.
OP, it’s a wide range because all depends on your office location, what level partner you are, tax/audit/advisory, whether you work on public or private jobs, if (in audit) you’re a reviewing partner, if you’re the office managing partner, etc. I’d say it’s safe to say you can assume you’re getting at least $300k as a first year partner and then it goes up from there. Also, things to consider is the fact that partners have to pay Employee and Employer FICA tax (15.3% instead of 7.65%) and their own health insurance, etc. because they’re partners and not employees. Also, partners have to buy into the partnership which I’ve heard is over $200k (if not more) and you typically take out a loan to do so.
A lot of useful considerations here. Thank you!
I’ve seen several posts confirming that average partner comp at PwC is $1.5M.
There is also the partner bowl that may also help with this question