Software engineering salaries top $1m in Silicon Valley

Principal engineers in California can expect to earn more than $1 million per year, a new study on pay rates within the tech sector has revealed.

According to the data, principal software engineers at Facebook’s HQ in Menlo Park, California can expect to earn over $1 million once salary, stock, and bonuses are taken into account, while other positions in San Francisco at Stripe and Airbnb are worth $900,000 and $800,000 respectively.

The majority of all high-paying roles in the results were based in California, with a few notable exceptions. Staff engineers at Coinbase earned $673,000 on a remote-first contract, while high-salary engineer roles also came from a range of cities including Bozeman and Beijing.

Overall, California topped the list compiled by salary aggregation website Levels.fyi, with median pay for tech workers in the San Francisco Bay Area at $234,000.

In comparison, the median pay for tech workers in London is just $116,000 - a figure well below the top ten rates in America, but second overall in Europe after Zurich, where median pay has reached $178,000.

Further east, median pay was even lower, with Israel topping the list at $159,000, and the median for Bengaluru in India at just $37,000.

Jobs requiring higher levels of experience and education paid more. The highest compensation listed for staff engineers, who typically have more than ten years of experience, was $688,000 (at Stripe) in comparison with $443,000 (at Databricks) for engineers who only require a few years’ experience.

However, even graduate jobs in the industry were shown to carry potential for high compensation. The results showed that entry-level engineers received $274,000 at Two Sigma, a hedge fund in New York City that uses artificial intelligence (AI), machine learning (ML), and data analytics to inform its investment decisions. However, all other firms in Levels.fyi’s top results for this job title are based in California.

The report also revealed the changing landscape of high-paying jobs in the tech industry. In Levels.fyi’s 2021 results, the highest-paying jobs in engineering were dominated by companies such as Roblox, Facebook, Apple, and Microsoft.

Of these firms, only Facebook and Apple have remained in the top results for 2022, with Stripe, Airbnb, Netflix, Twitter and Snap Inc. now representing the top pay offers in the sector.

Outside of the titles the company has formerly ranked, this year’s results also took into account emerging titles that carry high levels of compensation. These included positions such as software engineering manager (up to $910,000), product designer (up to $400,000) and hardware engineer (up to $376,000).

Pay and job security within the tech sector have become increasingly uncertain as countries face recession, and issues such as the energy crisis have led to reassessment of spending. In November 2022, Meta cut 11,000 employees citing inaccurate investment predictions, and Microsoft has reportedly slowed its hiring.

Cuts have not been contained to workers with the least experience. Following its acquisition by Elon Musk, Twitter fired 3,700 workers from throughout the company including executives and entire teams such as engineers working on new features for the social media platform.

Despite these trends, Levels.fyi stated that “compensation has still generally increased relative to last year at the topmost companies and levels”. The data shows that depending on region, workers can expect high levels of compensation, and that opportunities continue to grow for those seeking roles that are growing in demand.