If you want a career where you’ll be using your math skills everyday, becoming an actuary or an accountant are both viable options.

But, what is the difference between an actuary and an accountant?

The primary difference between an actuary and an accountant is that actuaries predict the financial impact of events that may or may not occur in the future, whereas accountants deal with the financial impact of events that have already occurred.

Many people think that they’re very similar jobs, but there are actually 4 major difference between the the two career paths.  That’s what I’ll talk about here.

Career Scope

I mentioned this briefly above, but more detail is definitely necessary here.

The Actuary

The main goal of an actuary is to predict the financial impact of events that may or may not occur in the future.  To do this, actuaries use thousands of pieces of data in order to calculate the probability that an event will occur in each month into the future.

Next actuaries calculate the financial impact of that event.  This means they’ll determine how much the expected cost or earnings from the event will be.  As an example, an actuary working on vehicle insurance may be asked to calculate how much damage will be done to a vehicle in the event of an accident.  This would be the expected cost.

Once the actuary has the probabilities and the financial impact, he is able to calculate the “present value” of the loss.  This essentially means that he will determine mathematically how much money should be set aside now in order to pay for that event in the future if it does occur.

Actuaries use a lot of professional judgment to do their jobs because there isn’t always a right or wrong way of making predictions.  One actuary may use a completely different approach than another actuary, and end up with different results.  Still, both predictions may be feasible.

The Accountant

The main goal of an accountant is to report on the financial impact of events that have already occurred.  They don’t look into the future and make predictions like actuaries do.

Generally, an accountant is dealing with numbers that are known.  For example, the accountants will know how much money was received for products and services throughout the year.  They’ll know how much the company spent on supplies, payroll, and other expenses.

Once the accountant collects all this data, they create financial reports such as balance sheets and income statements.  These reports break down exactly how much money was earned and spent within a year, and also show the net income (or loss) for the company.

Actuaries and accountants can work together

In insurance companies, it’s very common for actuaries and accountants to be in frequent contact with each other.  Valuation actuaries are responsible for calculating an insurance company’s policy liabilities.

Policy liabilities are a very large piece of the balance sheet because the company has thousands of policy holders relying on it to pay them insurance benefits in the future.

The change in insurance liabilities from one year to the next (or one month to the next) is often a very big piece of the company’s total income that is reported in the income statements too.

Because of this, actuaries and accountants communicate a lot, especially when financial expectations between the two departments aren’t lining up.

Education and Examinations

A bachelor’s degree and professional examinations are required for both careers.  Let’s have a look at some of the differences.

The Actuary

To become an actuary, the first step is to get a bachelor’s degree.  It’s not technically required, but any employer would be very unlikely to consider someone for an actuarial position if they didn’t have one.  A degree in math, statistics, or actuarial science is most common.

It typically takes between 3-5 years to complete the degree.  Some post-secondary schools require internships in order to get all the necessary credits.

In addition to the degree, actuaries also have to pass a series of 10 professional examinations in order to be fully certified.  They’re very difficult exams that test the candidates’ mathematical abilities.  Pass rates are typically below 50%.  For most people it takes between 7 and 10 years to pass them all.  Many people don’t finish at all.

Actuaries can work in the field before they’ve completed all the exams though.  Usually they’ll do more technical work at the beginning while they’re still passing exams.

The Accountant

Similar to actuaries, accountants also need to get a bachelor’s degree.  It typically must be in accounting or business.  They also need to have completed a specific number of credits in accounting, auditing, taxation and business.

It takes at least 4 years to complete the degree.

To become a Chartered Public Accountant (CPA – a major accounting designation), there are two exams that needs to be passed. First is the more difficult CPA exam, and second is the Ethics exam which is only required in some states.  The Ethics exam is fairly easy whereas the CPA exam takes more time to prepare for.

The CPA exam is actually broken down into 4 separate sections, each of which is a 4-hour exam in itself.  A score of 75% or higher is required to pass each section.  Pass rates for each exam are typically between about 40% and 60%.  The caveat is that all 4 sections must be passed within an 18-month time period.

An accountant can work in the field before obtaining the CPA designation.  In fact, they have to.  Between 6 months and 2 years of work experience is required to qualify for the designation, depending on the state.

For more information on the CPA exam, this website is very helpful.

Actuary Exams vs CPA Exam

Time Commitment: The time it takes to complete all the actuarial exams is between 7-10 years for most people, whereas all 4 sections of the CPA  exam must be completed within 18 months.

Difficulty:  For most people the CPA exams are easier than actuarial exams.  Actuarial exams test more difficult concepts and get harder as the candidate progresses through them.

Number of Exams: Actuaries need to pass 10 exams in order to be fully qualified, whereas accountants have to pass 4 exams within 18 months.



The salaries here should be used as a guideline only.  Do some further research on this if you’re considering the two careers and salary is a big deciding factor for you.

The Actuary

I found the information that I’ve reported here for actuaries from the DW Salary Survey.  This is a reputable salary survey in the industry.  You can have a look at it here.  Keep in mind that it gets updated every year, whereas I am not going to update the numbers below every year.

  • The approximate salary for entry-level actuaries with 3 exams passed is $85,000 per year.
  • The approximate salary for middle management actuaries with associateship and 5 years of experience is $120,000 per year.
  • The approximate salary for senior management actuaries with fellowship and 8 years of experience is $140,000 per year.
  • The approximate salary for top level management actuaries with fellowship and 15 years of experience is $190,000 per year.

The Accountant

I found the information that I’ve reported here for CPAs from the IMA 2021 US Salary Survey. Here it is if you’d like to have a look. For the figures below, I assumed that you would have a Bachelor’s degree, not an advanced degree.

  • The median salary for entry level CPAs is about $85,000 per year.
  • The median salary for middle management CPAs is about $90,000 per year.
  • The median salary for senior management CPAs is about $145,000 per year.
  • The median salary for top level management CPAs is about $140,000 per year. Interestingly, it’s slightly lower than the senior management salary.

Actuary Salary vs CPA Salary

It’s very difficult to compare the salary differences between actuaries and CPAs because there are so many different factors that can affect salary for both careers.  Generally actuaries will have a higher salary than CPAs due to the more difficult exams and the specialized knowledge.

Employment Opportunities and Outlook

Now let’s have a deeper look at the job availability and future outlook for these two careers.

The Actuary

Actuaries are most commonly employed by insurance companies.  Almost any type of insurance will needs actuaries in the background to assess and manage the risk involved with providing that insurance.

They can also work for pension consulting firms, or the government in areas dealing with public healthcare/retirement systems (like OHIP and CPP in Canada, or Medicare and Medicaid in the U.S.). Any company that has some level of risk that it wants to manage is also a possibility.  This isn’t actuarial work in the traditional sense though.

Since the majority of actuarial jobs are limited to insurance companies, the availability of positions is relatively low and tends to be in larger cities.  Actuaries have to be somewhat flexible in where they live, or be willing to commute.

As with most careers, there are more positions at the entry-level, but these tend to be the most competitive.  Once you gain some experience in an actuarial position, you likely won’t have a hard time getting other positions in the field.

You may have heard that the unemployment rate for actuaries is almost 0%.  They’re referring to fully-qualified actuaries.  There are many actuarial job candidates with some exams passed that are unable to find entry-level jobs.  Technical skills, a good GPA, and related experience all increase your chances of getting a job.

My personal opinion is that there will be more and more actuarial positions in the future, but since there are also more and more candidates applying for these positions it’s going to continue to be difficult to stand out as “one of the best”.  Due to this uncertainty,  it’s important to have a back-up plan if you decide to become an actuary.

The Accountant

Almost every company needs an accountant.  Many of them have an entire finance department with multiple accountants working together.  So, there are many thousands of CPA jobs in Canada and the U.S.

The large base of employers that need CPAs means that there are jobs in most cities.

I cannot accurately speak to the demand for accountants and CPAs right now, but with the extensive opportunity paths open to CPAs I’m led to believe that intelligent CPAs with good communication and technical skills will be able to find a job.

The unemployment rate for accountants (and auditors) is sitting at about 2% right now in 2018, according to this article.

Actuary Outlook vs Accountant Outlook

The demand for both actuaries and accountants looks high for the coming years.  However the relatively small number of actuarial positions available compared to CPA positions suggests that you’d probably have an easier time finding a job as a CPA.  If you do go the actuarial route, you should have a back-up plan that’ll allow you to gain experience first and then hopefully switch to an actuarial job.

Actuary or Accountant: Which is better?

The career that is better for you depends on your objectives.  If you’re primarily concerned with higher salary then you’ll probably want to go the actuarial route.  If you’d rather have a career that’s easier to enter into, with fewer barriers to entry and a six-figure salary, the the CPA path would probably be better for you.

But I recommend that you take into consideration all the different aspects of the career before deciding.  Do more research on both careers and weigh out the pros and cons.  Consider other career options too.

For further information related to actuaries, you can read these posts about the actuarial career, how to become an actuary, and how actuarial exams work.

And, if you decide that the actuarial career is right for you, make sure to check out the Actuary Accelerator Community for step-by-step guidance on how to turn your actuarial dream into a reality!


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Get an actuarial job even in today's competitive market!

Get all my best tips on how to become a TOP actuarial candidate so that you can get your actuarial dream job.

Just add your email below.