Computer Software Engineer Salary Per Month – In terms of salary, Silicon Valley is clearly the winner, with an average annual income of $110,554, according to Glassdoor data. But even with six-figure salaries, many developers struggle to afford the soaring rents in the Bay Area.
For a more complete analysis, we compared the real earnings of software engineers in 43 cities around the world to see where they would have the most spending power. Real income was calculated as follows:
Computer Software Engineer Salary Per Month
Real Income = Income – Taxes – Social Security – Cost of Living – Rent – Quick overview of our results
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Seattle is the clear winner, with wages close to Silicon Valley but with significantly lower rental costs. With few exceptions, US cities were also ranked higher than international cities. Interestingly, San Jose (Silicon Valley proxy) is still ranked 3rd out of 21 US cities, while San Francisco is back at 19th due to the rent gap.
On the East Coast, New York and Washington D.C. performed even worse and took respectively the last two places. Phoenix was second, and Austin and Houston were the top 5. Internationally, Tel Aviv, Canadian cities and Berlin are our recommendations. Our data suggests that you avoid London, Singapore and China differently than expected.
Previously, Glassdoor listed the “25 Best Paying Cities for Software Engineers” in the U.S. and calculated the “true adjusted salary” by adjusting salary for the cost of living. Their model places San Jose and San Francisco at No. 2 and No. 3, respectively, on the list, contrary to anecdotal evidence. It’s worth noting that they say San Jose has a higher cost of living than San Francisco, while our data shows why the opposite is true.
What does “comparison of income with cost of living” mean? It’s a way to even out cities with different costs of living. Here’s Glassdoor’s formula:
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But the ratio of income to cost of living is not a very accurate way to compare cities. People just want to know how much money they will have in their pocket at the end of each year.
Instead of scaling income like Glassdoor does, we used a real-world formula to calculate the salary of the average software engineer living alone in the city and used that as a ranking metric. This leads to very different results.
Because taxes take a significant portion of each salary and vary regionally, we used the same Glassdoor base salary numbers to calculate each city’s after-tax income, then pulled average annual housing and rent costs from Numbeo data. You don’t want to move to a city with few vacancies, so we have chosen cities with many job offers and expanded our reach globally.
American cities outperformed almost all international cities, so to keep things simple we’ve ranked the two differently. Non-US cities will henceforth be referred to as “international” cities.
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Most people assume that even if wages are lower abroad, the lower cost of living is enough to compensate. With a lower base salary, your real earnings will be lower, but foreign salaries can’t even compete with the US in terms of cost of living. See the “Convenience” section below for more information.
Our data confirms the findings of similar reports and suggests that Seattle is currently the best place to be a software engineer. Companies like Amazon and Microsoft raise the average salary to near Silicon Valley; however, lower rent means more money in your pocket each month.
Phoenix, Austin and Houston also seem like good choices with real incomes above $30,000. However, these markets are still growing and are near the bottom of our list in terms of the number of jobs posted. Raleigh, North Carolina ranks 6th just below Houston, but it also has a relatively small labor market.
From the chart above, you may have noticed the difference between San Jose at #3 and San Francisco at #19. These two cities are often lumped together in the same “Bay Area” category. Why do regions with similar markets and geographic proximity have such different real incomes?
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Our data suggests that wages and living costs are about the same, but cheaper rents in San Jose make up the difference.
The cost of living does not vary greatly from city to city, but the rent does. For example, check out Phoenix in third place with an average rent of $972 per month. month, while San Francisco ranks nineteenth with an average rent of $3,272 per month. month.
Washington D.C., New York, and Boston have the largest software engineering job markets in the Bay Area, but skyrocketing rents push them to the bottom of the list. According to our analysis, Washington, D.C. most vacancies, but below-average pay and high costs make it the worst choice among major US cities.
In addition to American cities, we also wanted to know more about international cities. We selected cities mentioned in similar reports as established or “emerging” tech hubs and ran the numbers. Note that almost all of the cities listed below do not outperform their American counterparts in either real earnings or the number of jobs posted.
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Oslo leads the list in terms of workforce, but we didn’t mention it earlier because the labor market is the smallest of the 43 cities analyzed in the report. Compare your 106 job offers with 22,554 job offers in New York.
The best solution is Tel Aviv. It is a fairly mature tech hub with the second highest real income and a reasonably large tech market. In addition, there are tax advantages for new immigrants to the country, which are not included in our tax calculation.
Canada looks good too. Toronto, Montreal and Vancouver rank 3rd, 4th and 5th on our list in terms of real earnings. In addition, the labor market in all three cities exceeds that of Tel Aviv. Berlin, often referred to as a strong European technology center, is not far behind in 6th place.
Bangalore also deserves a mention. It has one of the most software engineering jobs in the world, surpassing San Francisco and San Jose and second only to New York and Washington, D.C. By contrast, the average pre-tax income in US dollars is the lowest of all cities. we considered it.
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In most cases, the cost of living is much lower internationally than in the US, but not so low as to compensate for the drop in wages.
According to our data, real earnings in London are below the international average and well below US cities. Another city that may surprise you is Beijing. Many people are excited about the technological innovations there, and local startups have reduced access to a huge but unique domestic market. However, our data suggests that there are better options from a strictly economic point of view.
Real earnings in Singapore and Hong Kong are close to zero. Warsaw and Moscow are even lower than this, so much so that we calculate a negative value for real income. This means that if you are a software engineer with an average salary in one of these three cities, you cannot afford to rent a single apartment in the city center.
Lower international wages generally mean lower earnings, even with lower living costs. Perhaps it is more important to think of income as a ratio of expenditure. We calculated an “affordability index” for international cities, which is tax revenue divided by spending, and indexed it to San Francisco. San Francisco’s “affordability” is thus defined as 100, and a value of 150 means that the city in question is 50% more “affordable” than San Francisco.
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Revenue Multiple = (After Tax Revenue/Expenses) City Index Value = 100 * (City Revenue Multiple)/(SF Revenue Multiple)
This mostly gives a ranking corresponding to real earnings. More interesting is the location of San Francisco. Although San Francisco is not particularly affordable (most US cities score above 100), about half of international cities have a lower price. So even considering the ratio of income to expenditure, international cities struggle in the competition.
To provide a non-financial context for each city, we cite Numbeo’s Quality of Life Index, a weighted index based on several factors:
This number is not indexed, so it is only a comparison tool. Because there is less stark contrast between US and international cities, all global cities are included below, except for Baltimore and Detroit, which did not have enough data to calculate the index.
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Many international cities exceed the largest cities in the United States. Consider, for example, that 13 of the 22 international cities exceed New York. Apart from Melbourne, 10 of the first 11 places are all smaller US cities. Take these results as you will; some have mentioned that it may place too much emphasis on environmental pollution.
Our model assumes you are a software engineer living alone in the city with an average software engineer salary. Although your personal “real earnings” may vary widely depending on the job,