How much do Big 4 partners get paid?

Making it to partner at one of the Big 4 accounting firms—Deloitte, EY, KPMG, and PwC—is considered by a lot of people to be the pinnacle of many accounting careers. One of the key attractions to these roles is the significant financial reward. But how much do Big 4 partners actually earn, and is it too much?

Deloitte, PwC, and EY have all recently disclosed their UK partner earnings, revealing just how lucrative these roles can be:

• Deloitte reported that the average pay for its UK partners was an impressive £1.01 million this year.
• PwC recently disclosed that its UK partners took home an average of £862,000.
• EY announced that its UK partners earned an average of £761,000.

It’s important to highlight that these figures are averages, meaning that while some partners earn more, others earn less. The pay is largely tied to a partner’s individual performance and the overall profitability of their firm.

KPMG have yet to announce their most recent results but the sharp eyed amongst you will notice that the length of the name of the firm corresponds with the “hierarchy of pay” between the firms. Given that KPMG has 4 letters in the name it’s a guess that their profits will be somewhere between Deloitte (8 letters and £1.01 million) and PwC (3 letters and £862,000)…

Are Big 4 Partners Overpaid?

While these seven-figure salaries might seem justified given the extensive responsibilities of Big 4 partners, some argue that these earnings are excessive, particularly given the high fees that these firms charge their clients.

Critics claim that the high pay packages of Big 4 partners come at the expense of their clients, who often face steep fees for the firms’ services. This is especially true for large multinational corporations that require complex audit, tax, and advisory services on a global scale. The Big 4 dominate this market due to their size, resources, and expertise. But with only a handful of firms able to handle such complex transactions and audits, the lack of competition allows these firms to set high prices, contributing to their partners’ substantial earnings.

For many businesses, especially those involved in mergers, acquisitions, or cross-border tax planning, there are few alternatives to the Big 4. As a result, they often have no choice but to pay these premium fees. While the Big 4 provide a level of global expertise and service that is hard to match, some critics argue that the fees they charge are disproportionate, with partners reaping the rewards.

Why Do Big 4 Partners Earn So Much?

The high pay is not without reason. Big 4 partners are not just senior employees—they are owners of the firm, sharing in its risks and rewards. They are responsible for leading large, complex projects, managing key client relationships, and driving the firm’s strategic direction. Their pay is closely tied to the overall success of the firm, meaning that in years of strong performance, partners can see significant pay-outs.

Given the enormous scale of the Big 4’s client work—often handling global transactions worth billions—their expertise is highly sought after. The firms charge premium fees for this expertise, which is reflected in the partners’ substantial pay. In a competitive market for top talent, the firms argue that high pay is necessary to attract and retain the best in the business.

A Threat from Mid-Tier Firms?

While the Big 4 continue to dominate, mid-tier accounting firms are increasingly being seen as a potential threat to their position. Firms such as RSM UK, Grant Thornton, and BDO have been gaining ground, winning significant client accounts and offering competitive services in audit, tax, and advisory. These firms, while smaller in scale, are increasingly able to provide services to mid-market and even larger clients, sometimes at lower fees.

For example, RSM UK, built from the old Baker Tilly, recently reported that its profits per partner rose by 7% to £708,000. This is not far off the lower end of Big 4 partner earnings and demonstrates that mid-tier firms are catching up in terms of profitability. As mid-tier firms expand their service offerings and attract top talent, they could pose a serious challenge to the Big 4’s market share.

However, whether this will reduce Big 4 profits or simply increase the profitability of mid-tier firms remains to be seen. For now, the Big 4 still have a commanding hold on the most complex and high-value global transactions, but as mid-tier firms continue to grow, the competitive landscape could shift.

A Limited Market

One reason the Big 4 can command such high fees is that there are few other firms capable of handling the complex global needs of their largest clients. Multinational corporations and governments rely on the Big 4’s breadth of experience and ability to work seamlessly across jurisdictions, sectors, and regulatory environments. Smaller firms, while capable in many areas, often lack the global network and resources to manage the same level of complexity.

This limited competition allows the Big 4 to maintain their dominant position and set higher fees. While some see this as a reflection of the firms’ value and the expertise they offer, others view it as a market failure, where clients are left with few alternatives and partners continue to benefit from the lack of competition.

Conclusion

There’s no doubt that Big 4 partners earn impressive sums, with the latest figures showing £1.01 million for Deloitte, £862,000 for PwC, and £761,000 for EY partners in the UK. These salaries reflect the firms’ success and the significant responsibilities carried by partners. However, the high fees charged by the Big 4, especially in a market with limited alternatives, have led some to question whether partners are overpaid.

While the firms argue that their global expertise justifies these fees, critics continue to point to the lack of competition and the high cost for businesses that have little choice but to work with them. Ultimately, whether Big 4 partners are overpaid depends on where you stand on the balance between the value they provide and the costs to their clients.