With growing competition and rising costs, many U.S. businesses are re-evaluating how to optimise their finance and accounting departments. Offshoring has become a strategic choice to reduce expenses without compromising talent or expertise. South Africa is emerging as a top destination, offering skilled finance professionals at competitive rates.
In this article, we’ll look at how South African salaries in Public Accounting compare to those in the U.S., and explore the benefits offshoring can bring in cost savings and operational efficiency.
Public Accounting Roles
The public accounting function plays a crucial role in maintaining the financial health of a business. There are several key roles within this sector:
The Hidden Costs Of Employing In The U.S.
In the U.S., employers are legally required to cover Social Security and Medicare taxes, alongside federal and state unemployment insurance (UI) contributions.
For example, U.S. businesses pay:
- 6.2% of an employee’s salary for Social Security
- 1.45% for Medicare
- 6% of the first $7,000 of an employee’s wages as part of the Federal Unemployment Tax Act (FUTA).
A rough benchmark for mandatory employer costs would be around 10% – 15% of payroll for U.S. companies – or more, depending on the state you’re in.
In comparison, South Africa’s employer costs are much lower, with a static contribution to the Unemployment Insurance Fund (UIF) which requires the employer to match 1% of an employee’s salary, and a 1% Skills Development Levy.
The total cost to an employer would therefore be 2% of the payroll.
South African Public Accounting Salaries Vs The US
Let’s compare some roles, their responsibilities, and how offshoring addresses operational challenges.
Bookkeepers
Bookkeepers play a key role in maintaining accurate financial records for businesses. They’re responsible for recording day-to-day financial transactions, reconciling accounts, managing ledgers, processing invoices, and ensuring the accuracy of financial data.
Candidates may be in the process of earning an accounting or finance qualification but typically have practical experience with basic accounting functions rather than formal higher education in the field.
Most bookkeepers have around 5-10 years of experience in general accounting tasks.
- The average annual Bookkeeper salary in the U.S. is around $55,000.
- The total cost after federally mandated contributions is around $59,627
- In South Africa, the salary would be around $19,018 annually.
- After contributions, that total becomes $19,119.03.
By hiring a Bookkeeper from South Africa, a U.S. business can save around 67% translating to roughly $40,509.50 per year.
Junior Accountants
Junior Accountants take on a supportive role in accounting. They handle essential tasks that contribute to the accurate and timely preparation of financial reports. These Accountants usually have 2 – 4 years of accounting practice experience and usually have some formal post-high school education. Fully qualified in Quickbooks, Xero and other cloud-based accounting software.
These candidates usually have bachelor’s degrees in Accounting or Finance and 2 – 4 years of experience.
The average monthly salary for Junior Accountants is:
- Around $67,760.00 a year in the U.S. and $73,363.64 after contributions.
- Around $23,129.00 a year in South Africa, the total cost to employers is $23,592.44.
A 68% savings is unlocked (or a total of around $49,772.64)
Accounting Managers
Accounting Managers take on a more advanced role within the accounting function. They often lead Accounting Managers hold senior roles within the accounting department, often leading teams overseeing client delivery and managing the relationship with clients. They’re also well-versed in prepping detailed and in-depth reports.
They play a crucial role in ensuring the accuracy and integrity of a company’s finances while delivering strategic, data-driven financial insights. Typically, Accounting Managers bring 5-10 years of experience to the role and are qualified Chartered Accountants, CPAs or equivalent professional accounting designations
- The typical Accounting Manager salary in the U.S. is roughly $100,240 annually.
- Employer contributions increase the total cost to $108,328.36.
- In South Africa, an Accounting Manager’s salary sits at around $53,114.
- With contributions, the total employment cost reaches approximately $54,176.
Offshoring this role results in approximately 50% savings, with U.S. businesses potentially saving $54,152.36 annually.
Fractional CFO
Fractional CFOs typically support CMBs directly, leading all things strategy-related with the clients. These are usually senior qualified Accounting professionals with some previous commercial and industry experience.
Most of the time, they offer 10+ years of experience in prior senior and strategic roles in Finance and are qualified CPAs, or with one of the other larger professional bodies such as CIMA, or CFA.
- The typical in-house Fractional CFO salary in the U.S. is roughly $150,000 annually.
- Employer contributions increase the total cost to $161,895.00.
- In South Africa, a Fractional CFO’s salary is around $92,912.
- With contributions, the total employment cost reaches approximately $94,770.
Offshoring this role results in approximately 41% savings, with U.S. businesses potentially saving $67,125.00 annually.
Why Offshoring to South Africa is a Good Idea for U.S. Businesses
The cost savings associated with South African account management salaries are just the beginning. There are even more bonuses for U.S. businesses considering offshoring to South Africa:
Access To Skilled Talent In A Competitive Market
U.S. companies often face fierce competition for top finance talent. Offshoring to South Africa opens up a broader talent pool with highly qualified professionals, many of whom have internationally recognised certifications and degrees, easing the pressure of local hiring challenges.
Streamlined Hiring & Onboarding
Hiring in the U.S. can be a lengthy, complex process involving multiple layers of background checks, compliance checks, and onboarding procedures.
South African EORs often streamline this process, offering ready-to-hire professionals. This reduces the time and effort required for recruitment, enabling businesses to scale quickly.
Flexibility in Workforce Management
U.S. companies benefit from flexible staffing arrangements when offshoring, such as project-based or part-time hires that are often more challenging to implement domestically.
This flexibility allows businesses to scale their workforce up or down based on specific needs, without the long-term commitments and costs associated with U.S.-based employees.
Conclusion
It’s clear that offshoring public accounting roles to South Africa is beneficial to U.S. businesses.
And, with up to $115,588,893 in potential savings, a streamlined hiring process, and flexibility in workforce, offshoring really is a no-brainer.
Hire Far Out is made up of qualified finance professionals that know how to tap into a talent pool that you won’t find anywhere else. So if you want to get started, you should get in touch with us.