If you have a knack for accounting and have the education to prove it, a career as an Internal Revenue Service auditor may prove lucrative. IRS auditors are employed by the federal government but work around the country. Because the federal government uses a pay grade system, an IRS auditor's salary depends on their level of education and experience.
Auditors also have the opportunity to earn performance-based raises, to earn overtime pay and to earn premium rates for working nights, Sundays or holidays.
IRS agents or auditors earn a minimum starting salary of $34,916 per year based on their geographic location. The average annual salary of all federal tax examiners is approximately $70,730 per year.
Average IRS Auditor Salary
The preeminent source for salary data in the United States – the Bureau of Labor Statistics – does not place IRS auditors into their own category. Instead, the salaries of all tax collectors and examiners at all levels of government are averaged together. However, the BLS does consider federal, state and local governments as separate "industries," which helps distinguish salaries for the IRS – a federal agency – from the rest.
With this in mind, the average salary for federal tax examiners, collectors and revenue agents as of May 2019 is $70,730 per year, or $34 per hour. This is higher than the national average for tax examiners, collectors and revenue agents at all levels of government, which is $60,960 per year, or $29.31 per hour. Federal tax examiners, collectors and revenue agents earning the 10th percentile wage reported an average annual salary of $47,190, or $18.18 per hour, whereas those earning the 90th percentile wages reported an average annual salary of $113,440, or $54.54 per hour.
Locality and General Pay Schedules
IRS auditors work around the country. According to the IRS, tax auditors receive "locality pay," which means salaries are adjusted to match the cost of labor in the auditor's geographic area. In addition, the IRS also pays non-managers according to the federal government's general schedule (GS) pay grades. Auditors can also earn a performance-based raise known as a "step" while remaining in the same pay grade.
This means that salaries can vary significantly for IRS tax auditors based on their location, performance and longevity. To view locality spreadsheets with grade and step information, visit OPM.gov.
According to the Office of Personnel Management, the education, experience and certification required to become an Internal Revenue Agent place them at least at a Grade 5 pay scale. New agents may qualify for GS-7, GS-9 or GS-11 pay as well.
Top-Paying Geographic Locations
According to the locality pay charts available on OPM.gov, the top three metropolitan areas paying the highest salaries for Grade 5, Step 1 employees include:
- San Jose-San Francisco-Oakland, CA: $42,592
- New York-Newark, NY-NJ-CT-PA: $40,345
- Houston-The Woodlands, TX: $40,147
As of 2020, no locality pays Grade 5, Step 1 employees less than $34,916.
Other Payment Perks
IRS auditors may also receive a transportation subsidy to cover the cost of travel associated with their job duties. They also receive time-and-a-half bonuses for working more than eight hours in a day or 40 hours a week. Auditors willing to work during unpopular shifts also receive premium rates:
- Nights: 10 percent premium
- Sundays: 25 percent premium
- Holidays: 100 percent premium
Agents promoted to management positions earn salaries according to the IRS' "payband" schedule. These salaries are also adjusted based on geographic location. Download each locality's payband schedule at IRS.gov.
- Bureau of Labor Statistics: Occupational Employment and Wages, May 2019 13-2081 Tax Examiners and Collectors, and Revenue Agents
- PayScale: Average Salary for Internal Revenue Employees
- Glassdoor: IRS Auditor Salaries
- IRS: Salary and Financial
- OPM.gov: 2020 General Schedule (GS) Locality Pay Tables
- Office of Personnel Management: Internal Revenue Agent Series, 0512 Individual Occupational Requirements
- OPM.gov: Complete set of locality pay tables 2020
- IRS.gov: IRS Careers: Downloads
Cathy has been writing about finance since 2014 and has been published on sites like The Nest, Bizfluent, Financial Independence Hub, and Credibly. She takes a particular interest in demystifying personal finance questions, like budgeting, tackling debt, and investing for the future.