Software engineers can make considerably more than many other professionals in the USA. The U.S. Bureau of Labor Statistics (BLS) states that the average annual salary for a full-time employee was $61,900 a year in 2022. Meanwhile, the average software engineer's salary was about $107,818 per year, according to estimates dating from March 2022. This apparent difference makes one wonder: why are software engineers so highly paid?
In this digital world where software is crucial for businesses, software engineers are in demand. Most of these professionals' skills also revolve around trending fields, such as I.T., machine learning, mobile engineering, software architecture, and databases. Thus, there has been a significant rise in their salaries over the past few years. In addition, software engineers' job requirements can be exhausting and stressful, so they must be well-paid.
Let's explore more about software engineers' income and learn why they make more money.
Why Do Software Engineers Make So Much Money?
With the increasing digital advancement over the past decade, businesses are now looking for skilled software engineers to stay competitive in the market. But the tech talent gap caused by the pandemic and other social reasons make it challenging for companies to find workers.
The enviable software engineer income comes naturally from the high demand and short supply in the market. The situation has also increased the salary expectations of American software developers. Because these professionals work directly on the business aspects that are now in demand, they simply value their work more. Tech hubs, such as Pittsburgh, Atlanta, Chicago, Miami, and Seattle, have even higher software engineers' salaries because of the increased living costs.
The question is, how do you find and hire remote developers at reasonable costs? We have a couple of suggestions for you, but let's first take a closer look at the reasons behind a high software engineers' salary you may face as a business.
High Demand, Low Supply
Software engineers are an integral part of almost every type of company. They streamline the workflow, monitor the systems, and automate the processes. Businesses can't function fine without a quality developer, so their demand is relatively higher than other professions.
Now, although many young people are graduating with a computer science degree these days, the demand still overcomes the supply. In such situations, software developers are primarily in charge of salary negotiations.
Recruiters can't get a very experienced developer on a small budget, and they realize that. That's why companies offer an attractive salary package to software engineers before their competitors scoop them up.
If you're hoping for things to get better in time, we have to disappoint you. As more and more companies automate and digitalize their processes, the demand is only expected to increase in the coming years. According to the U.S. Bureau of Labor Statistics, the software engineer job demand should grow by 22% over the next decade. So, the ball will remain in the software engineers' court.
Increasing Business Requirements
The I.T. department is one of the most crucial parts of a business. The I.T. specialists ensure that the services stay undisturbed, the internet works smoothly, and costly losses get prevented. These things boost businesses' functions internally and strengthen their reputation in the market.
Any loophole in the I.T. system can cost businesses a small fortune. One such example was the Facebook outage in 2021. Although it lasted for only 6 hours, the outage cost the company about $164,000 per minute in revenue and a total of $6 billion to Mark Zuckerberg personally. In addition, the stocks also declined by $40 billion in market cap.
Software engineers prevent all such issues and maintain the workflow of a company. A sudden mishap can cause companies reputational loss as well. If paying software engineers a heavy salary can prevent all these things, it's worth it.
Technological Development
Software engineering is one of those vast fields where you never stop learning. Coding is just the first step in the industry; there is still more undiscovered.
As soon as the technological landscape changes, the required skills set for software engineers also shifts. Therefore, software developers always stay on a hustle to upskill themselves and stay relevant and in-demand. What's more, they are expected to be highly adaptable to sudden market shifts.
All these traits and consistency require a high pay rate. Of course, career development is a part of every job role, but it is of a whole new level when it comes to software development. That's why people prefer to start practicing software engineering as soon as they graduate.
Business Value
Businesses don't need a big team of software developers to create value because they have an impressive output to value ratio. So, you can start making your way in the I.T. industry with a team of only 5-6 developers.
For example, when Facebook acquired Instagram, the company only had 13 employees. Yet, it transformed into a billion-dollar enterprise within a few years. Currently, the company consists of a broad team of software developers from different races, ethnicities, and nations.
The magic software developers create is not what we see in any other industry. A skilled and knowledgeable developer knows all the recent and outdated trends of the technology market, so they create value accordingly.
When you compare the average software engineer's salary with the value they create, you'll realize that the latter outweighs the former in many ways. So this is one answer to the question: "why do software developers make so much money?"
Job Role Difficulty
Coding and programming seem hard from the surface, especially to the untrained eye, and there's a good reason why these skills pay off. Software development is way more than just playing with numbers. It includes a list of challenging job tasks, such as:
- Diagnosis of complex issues and their treatment
- Optimization of business processes, systems, and coding
- Testing and improvement
- Collaboration with several departments
- Estimation of delivering the significant issues
- Constant learning and training
The list goes on. A software engineer has to perform many tasks daily, which often takes more working hours than what's considered a standard. Yet, the complexity of their job requirement isn't solved at the end of the day. The higher the position in a company, the higher the job requirements and salaries will be.
Whether fixing, developing, or testing a product, software engineers have a long journey ahead of them that continues for weeks or months. This is part of the reason why software engineers get paid so well.
Highest-Paid Software Engineer Jobs
We now know that software engineering is one of the highest-paying jobs. But how much do software engineers make? Here is a brief list of some highest-paid software engineering jobs with their estimated salary rates:
- Machine learning and natural language programming engineer: $151,000
- Big data engineer: $139,000
- AR/VR engineers: $121,000
- Cyber security engineer: $118,000
- Gaming engineer: $118,000
- Embedded engineer: $148,000
- Application engineer: $136,000
- Mobile engineer: $92,000
- Site reliability engineer: $166,000
- Front-end engineer: $168,000
Average Software Engineer Salary
How much money does a software engineer make on average? According to Indeed, the average software engineer salary in the USA is $96,817 a year with a $4,600 cash bonus. These figures vary from experience levels and the cities a software engineer is employed.
Here are the average annual software engineer’s salary with respect to different locations in the USA:
- San Francisco, CA: $116,806
- New York, NY: $105,260
- Seattle, WA: $120,679
- Chicago, IL: $113,044
- San Diego, CA: $93,618
- Atlanta, GA: $101,273
- Austin, TX: $103,925
- Dallas, TX: $103,903
- Houston, TX: $96,414
Entry Level and Internship Software Engineer Salary
The average annual salary of US entry-level software engineers around $101,516 per year. However, engineers easily boost these figures by upskilling and excelling in high-demand skills.
Along with the salary, software engineers also get these benefits at an entry-level role:
- 401(k)
- 401(k) matching
- Health savings account
- Paid time off
- Paid training
- Life insurance
- Disability insurance
- Health insurance
- Relocation assistance
- Dental insurance
- Vision insurance
The average software engineer's salary for interns is $72,239 a year in the USA, with a $5,518 cash bonus.
How Much Do Software Engineers of Big Companies Like Apple, Google, Microsoft, and Amazon Make?
Industry giants pay higher salaries to their software engineers to boost their creativity and retain them for longer. Since the supply of software engineers is still relatively low in the market, big companies can't afford to lose their quality employees.
Thus, here is an estimated breakdown of annual average software engineers salary offered by top-tier companies:
- Citi: $106,892
- Apple: $183,085
- Meta/Facebook: $209,594
- Walmart: $134,872
- Google: $198,741
- Amazon.com: $178,283
- Microsoft: $179,278
- Tesla: $147,247
- Intel Corporation: $130,645
- Nokia: $146,244
Note: These are just basic salaries without bonuses and other benefits.
Senior Level Software Engineer Salary
The average software engineer's salary for a senior-level position is $150,642 in the USA, with a yearly cash bonus of $28,883. On top of that, experienced software engineers also get many benefits that are not available to entry-level or junior-level positions. Some of them include:
- 401(k)
- 401(k) matching
- Transportation
- Employee assistance program
- Employee discount
- Employee stock purchase plan
- Flexible schedule
- Flexible spending account
- Health savings account
- Food provided
- Free parking
- Gym membership
- Dental insurance
- Disability insurance
- Health insurance
- Life insurance
- Vision insurance
- Opportunities for advancement
- Paid sick time
- Paid time off
- Parental leave
- Pet insurance
- Profit-sharing
- Referral program
- Relocation assistance
- Retirement plan
- Stock options
- Tuition reimbursement
- Unlimited paid time off
- Work from home
Why You Should Consider a Latin America Software Engineer
A software engineers' salary in the U.S. can be burdensome for startups looking to enter the field. That's why new companies with limited funds may want to explore other locations and hire remote software engineers.
Latin American countries offer a vast mix of benefits for U.S. employers mainly. Such nations host the most talented software engineers who know the U.S. business requirements. Thus, hiring them can bring diversity to your development team, give you access to the international market, and help you reduce recruitment costs.
If you're willing to outsource your software engineering needs to Latin America, you should go for it without thinking twice. There are hundreds of compelling reasons to make this move. Some of them are:
Lower Costs of Hiring
Many businesses hire remote Latin American talent because of cost-efficiency. Latin America has a relatively lower cost of living than the USA. This means companies can save a tremendous amount of money usually needed for hiring a native American engineer.
For example, you might already be paying your US based senior software engineer the average range of annual salary of $121,000 to $190,000. At the same time, a Latin American senior level software engineer has an average range of annual salary of $95,000 to $130,000.
Moreover, the U.S. dollar has also become strong against the Latin American currencies over the past few years, which could help you save more money. In addition, Latin American countries also have a modernized tax system.
Yes, tax systems usually tend to be complicated, but at least Latin America offers preferred advantages to several other countries. Decent tax rates can only add more to your financial savings.
Related: Hire Full Stack Software Engineer: a Complete Guide
Overlap With US Time Zones
Most U.S. companies don't consider offshoring because of the difference in time zones. For instance, Asian countries are hours ahead of the U.S. time zones, making it hard for remote teams to communicate and collaborate. Since software development projects usually require people to work in a team and collaborate closely, this can be a real obstacle in outsourcing.
However, that's not the case with Latin American countries. The time zones of Latin America and the USA are similar, so you can communicate, collaborate, and work seamlessly. As a result, your company will experience greater productivity, success, and growth.
Geographic and Cultural Proximity to the U.S.
Another hurdle while outsourcing software development services make cultural and geographical differences. When companies have teams with noticeable cultural differences, distorted communication and misunderstandings among members usually happen. This often results in errors, delays, and failure to complete daily milestones.
A language barrier is another significant risk of outsourcing that gravely impacts communication and productivity. Fortunately, Latin American countries have several cultural similarities with the U.S. Their citizens also have an excellent understanding of English.
Another advantage is locational, as Latin America is located just around the corner from the U.S. This makes traveling more accessible, so you can efficiently conduct in-person meetings with your software engineers whenever you want. It also saves you traveling costs.
Big Talent Pool
The USA hosts some of the best tech schools globally and has many tech hubs. Yet, the supply of software developers in the country is short compared to the demand.
On the other hand, the Latin American nations have been making significant investments in building and upgrading their tech colleges and universities to attract and produce the most-skilled talent in the world. Their efforts were not in vain, as the Latin American talent pool is now deeper and more diverse than one in the USA. It also comprises some of the most qualified professionals and young tech graduates.
Thus, hiring from Latin America is a good option for businesses that may not be able to find a particular professional in the domestic market. After all, the farther your search goes, the higher the chances you'll find what you're looking for.
Hire Latin American Software Engineers With Revelo
Software engineering has always been one of the most in-demand professions. However, that makes it no less challenging to find a software engineer who fits your company's requirements at a time of global tech gap and high demand. With an average software engineers' salary going up continuously, things are even more difficult for startups with limited budgets.
Fortunately, you still have several feasible business options ahead, such as hiring Latin American talent that resides in a geographically close and culturally similar setting. But how do you find and hire developers in Latin America? That's where Revelo can step in and help you.
We are a talent platform that partners with you to help you scale your tech teams quickly and cost-efficiently. You tell us your recruiting needs, and we perform talent sourcing, rigorous vetting, hiring, and onboarding. We even handle payroll, benefits, and local compliance, so you don't have to bother with paperwork and time-consuming tasks.
Revelo's software engineers are pre-vetted for expertise and experience, and we can match them with you in as little as three days. Contact us to hear more about our services or start hiring now within a risk-free 14-day trial.
.webp){kind=small}
