Finding good employees has been a big struggle the last few years. I am looking to find a senior tax preparer/manager for our satellite office in the Winnipeg market. Looking for someone that has 5-10 years experience and can supervise/mentor others. I was thinking of compensation in the $55 - $75K range depending on experience. Does this seem out of line (high or low) or reasonable.
The Winnipeg area may be considerably lower but I made that kind of money ($55k) for the year 2000 per my tax return in Calgary with 4 years experience from fresh out of university (I finished classes Dec 1995/officially graduated in April 1996) and 2 years past CPA designation (rec’d Feb 1998), with starting to supervise a student half way through the year. I was up to $67.5k for 2001 and $86k for 2002. By ten years post university graduation I was working very part time in my own practice but hired out to Collins Barrow for $80/hr reviewing tax returns and supervising their stable of 1st year students (10 maybe?) while teaching them taxes.
I’d expect a 5+ year manager to be in charge of reviewing junior staff (1 or 2 anyway) and preparing the more complicated stuff.
Total invoicing of $385-$400k files they are in charge of.
500 hours Jan to Dec on files only the manager touches yields about $40,000 paid to them at $80/hr. $120k invoiced for complicated work prepared.
500 hours Jan to May on files they supervise for students yields another $40k to the manager on $265k of simpler files worked on by the junior students with say 1 year tax experience already and they get $20k each over say 1,000 hours each Jan to June.
200 hours per year for stat holidays/vacation (12 stats plus 3 weeks vacation) paid for out 1 & 2 above
800 hours admin time over the course of the year (self training/training students/other stuff) also paid for out of 1 & 2 above. Students get paid another $20k (so $40k total for the year) for admin/stat holidays/vacation
Total staff costs = $160k out of $385k = 40%. $80k to manager, $40k to each assistant.
Total supply costs = $77k (insurance/training/software/computers/secretarial staff salaries/etc etc) = 20%
I’d say you’d need to put in 300 hours per year reviewing and another 150 hours in admin (mentoring the manager/training them yourself) which would give the firm $160k per year to pay the partner in charge of the manager… Such a partner would be supervising say up to 3 such junior managers at a time.
This is what I could hire a junior manager to do with 5 years of solid post university tax experience at assuming I had $400,000 in invoicing which I don’t - but easily could if I had a manager level person and two fairly junior assistants to help me out. A more experienced manager that requires very little partner review and is essentially on trial for being inducted in to the firm as a partner within a year or two (where I was at say 10 years post university) could be paid double ($160,000/yr, $40k each to the assistants, $77k to supplies and still leave $68k to the partner for probably 200 hours of review & mentoring).
I’d say you are massively low on paying someone what they are worth and compared to what the going rate is likely to be.
I’d still say it’s very low. I’d think you are going to get someone with maybe two or three tax seasons under their belt for $55k to $75k. Maybe the hiring environment is different in Manitoba and you will get somebody at the level you are hoping for at the that price point.
Sorry to hear your former CPA employee stole from you. I have not tried hiring a CPA as I don’t have enough work to keep them busy full time and don’t want to expand to year round service beyond the very part time work I do from July to December. I hire students every year and count myself lucky when they return the following year so I don’t have to do quite so much training.
I worked for a little firm with that model for many years, until the owners sold to HRB. As a result I actually worked within the HRB environment on a year round basis for a while…I don’t know what they’re paying their office manager types these, days but a few years ago I was appalled to find out just how little my (year round) co-workers were being paid. I personally don’t think the compensation range you’ve indicated is out of line at all, especially if it’s a good work environment.