As the global workforce is becoming increasingly tech-centric, software developers are now hired in nearly every industry today. According to Data USA, there are nearly 4.3 million software engineers in the US alone. There has been an estimated 17.2 percent increase in the number of college graduates who are awarded computer science degrees today.
As per a 2020 survey by Hired, software engineers report high rates of job satisfaction with nearly 85% of respondents saying they’re happy to have chosen software development as a career.
There is a growing demand for software developers with nearly 316,000 jobs expected to be created by 2029. As per the Bureau of Labor Statistics (BLS), the demand for IT professionals is expected to grow by 11% through 2029. LinkedIn’s 2020 Emerging Jobs Report rightly stated, “engineering isn’t a new profession by any means, but engineering roles across the board are still seeing tremendous growth.”
In this article, we will discuss the various factors that affect a software engineer’s salary and understand how software engineers can attract high-end pay packages.
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Software Engineer Salary: How much do software engineers earn?
According to PayScale, the average base software engineer salary is $87,192 per year. According to Glassdoor, the typical software engineer salary ranges from $89,536 to $181,249 per year.
The total compensation for software engineers is a sum total of their base salary, bonus, and stock options, and restricted stock units (RSU). In addition to this, every company has a leveling system on the basis of which software engineer levels are decided. Each level is associated with a unique set of responsibilities, skills, and a salary band — the higher is your software engineering level, the higher will your total compensation be.
This level is assigned at the onsite interview stage where software engineers can negotiate a higher salary based on their performance and seniority levels. Even though companies have a personalized tier-based structure to level software engineers, the general outline looks something like this:
- Level 1: Software Engineer (Entry-Level) — New graduates, diploma holders, or freshers with less than 1 year of experience usually fall in this level. Entry-level software engineers earn an average compensation of $76,633.
- Level 2: Senior Engineer (Early-Career) — Software engineers at this level enjoy relatively more autonomy and decision-making authority. They possess up to 4 years of experience and are paid an average total compensation of $84,465 per year.
- Level 3: Staff Engineer (Mid-Career) — Staff engineers are in charge of junior-level engineers and typically possess 5 to 9 years of experience. They earn an average total compensation of $95,700 per year.
- Level 4: Principal Engineer (Experienced) — Software engineers with over a decade’s worth of experience are paid an average salary of $105,648 per year.
- Level 5: Distinguished Engineer / Fellow (Late-Career) — Software engineers with over 20 years of experience can earn $114,583 on average.
Factors Affecting Software Engineer Salary
A software engineer’s salary depends on the company they work for, their base location, education, job title, educational qualifications, skills, and experience level. We’ll look at some of these factors in detail:
Higher seniority levels generally account for higher salaries. For instance, L3 SWE-IIs at Google earn an average base salary of $130k per year whereas L8 SWEs (also known as Principal Engineers) earn $326k per year. Bonus or stock compensations also increase with experience levels, with L3 and L8 software engineers earning $39k and $545k in stocks respectively.
A bachelor’s degree in computer science or a related field can help software developers kickstart a career in software engineering. However, to develop strong computer programming skills, build visionary software solutions, and attract higher salaries, a master’s degree is the way to go.
3. Job Titles
Software engineering is currently one of the most diverse and sought-after fields in the world. Given the wide range of advancement and transitioning opportunities the field offers, a software engineer can attract lucrative salaries as an Artificial Intelligence Specialist, Cloud Engineer, or even an Engineering Manager. These constitute some of the fastest-growing roles in the field today
Indeed’s 2020 Best Jobs report had seven out of the top ten roles dedicated to tech. Here are five of the highest-paid software engineer job roles:
Machine Learning Engineers
In 2018, LinkedIn found that there was increasing demand for machine learning engineers who were also amongst the highest paid professionals in the software and technology field. This holds true even in 2022 with PayScale reporting skills like NLP and machine learning help software engineers increase their earning potential.
Cloud Computing Engineer
Cloud computing engineers are responsible for designing systems and solutions using cloud architecture. With Amazon Web Services (AWS) and Microsoft Azure being the top cloud providers today, most companies work with these technologies in achieving cloud computing goals. Cloud computing engineers typically earn an average base salary of $102,877.
A software architect is responsible for making design decisions on high-level architecture choices. Their job is to ensure standard design protocols are followed, and tools and technologies used are cutting-edge. They are responsible for maintaining the enterprise framework of software-intensive systems.
Site Reliability Engineers
Site Reliability Engineers were first introduced at Google and later adopted by the likes of Netflix and Amazon. SRE teams are responsible for managing software engineering operations and supervising systems administration based on software engineering methodologies. The salary of site reliability engineers ranges from $119,000 to $195,000 per year.
Robotics engineers design and create robots or systems to carry out tasks as humans. It is a high-end profession with growing demand in the gaming and manufacturing industry. They build prototypes and test robotics machines, and develop the software that controls them. Robotics engineering is a fast-growing job role in the software development field with robotics engineers earning an average base salary of $93,984 per year.
Software engineers should possess excellent coding skills and be able to leverage tools and technologies to accomplish project goals. As per PayScale, software engineers skilled at Apache Zookeeper and Mercurial (Hg) can increase their earning potential by 58% and 57% respectively. Skills like people management and Enterprise Resource Planning (ERP) can result in a 55% and 45% salary hike respectively.
Salaries vary greatly with differences in location. For instance, a software engineer in San Francisco, California is paid an average base salary that is 40.4% higher than the national average. The same is the case with San Jose (California) and Seattle (Washington) where salaries are 35.4% and 23.8% higher respectively. On the other hand, software engineers are believed to be paid the lowest salary in Chicago, Illinois with base salaries being 1.1% less than the national average.
Software engineers are amongst the highest paid professionals in the world with top companies like Facebook, Apple, Amazon, Netflix, Google (FAANG), Microsoft, Cisco, and Lyft, to name a few, paying unmatched salaries to software engineers at all levels.
Microsoft Corp is believed to pay individuals in this role an average base salary of $117,704 whereas Cisco Systems Inc pays $109,722 annually. Google is reported to pay software engineers $121,590 per year. Software engineers at Facebook earn an average base salary of $122,803 plus an average bonus of $14,838 and an average profit-sharing amount equal to $36,716.
Below are the three biggest tech companies in the world:
How can you uplevel as a software engineer?
Experienced software engineers or higher-level SWEs have an in-depth understanding of the best software development practices. They are aware of the latest tools and technologies required to diagnose problems and have expertise in nearly every component of software development. The highest-paid software engineers also manage junior-level SWEs to achieve project goals. They possess exceptional coding abilities and can write complex programs.
An advanced computer science degree like a master’s degree can help software engineers attain this level of expertise and knowledge through hands-on experience and exposure to in-demand skills.
Align your career goals with a Master of Science in Computer Science
If you are looking to enhance your skillset and pursue lucrative software engineering job roles, we recommend you join the online Master of Science in Computer Science course on upGrad. It is a 19-month program that is designed for freshers to mid-level and senior-level software engineers. Students earn accreditation from IIITB & LJMU, the UK which opens up avenues to indulge in peer learning on a global level and pursue top-paying technical or leadership roles at some of the biggest companies around the world.
The course includes top-notch content comprising projects, assignments, and videos for students who wish to pursue Full Stack Development, Cloud Computing, Cyber Security, Big Data, Blockchain Development, and DevOps.
upGrad’s programs have benefited over 500,000 working professionals globally across 85+ countries. While our 40,000+ paid learner base serves as a networking circle for students, they also receive 360-degree career assistance from industry experts and leading faculty.
Don’t wait – take the next step towards transforming your career today!