I'm sorry to hear that you're not better compensated. I also emplore you to reframe your perspective. Consider the possibility that pay in many places outside tech hubs in the US is outrageously low. There's a race to the bottom wrt exploitative commodification of developer talent as the 3rd world comes online, and I find it abhorrent. This "SFBA / FAANG companies are the sole exception" narrative is incorrect, and harmful to you and to me and to everyone in our field. If you're living in a 1st-world economy, have solid technical chops, can communicate reasonably well in written and spoken English, working for a for-profit business, and have a few years of experience, and you're not making over $150k/yr, you're almost certainly underpaid.
Know your worth! Demand more! Capture the value you produce!
- Chris in Duxbury, MA
PS For context: I've been building web-related things for a living since 1998, and have always been paid fairly for it. Because I insist.
PPS Ofc YMMV... circumstances, personality, ambition, etc etc. But there is so much more opportunity to create and capture real wealth than you might imagine.
"and you're not making over $150k/yr, you're almost certainly underpaid."
Those salaries don't exist in the UK, no matter your position or the company you work for. I know senior programmers working for Faang companies in London and they don't make this much. Like, in general you won't see a position offering above £100k/year. I know someone with 25+ years experience in the industry and they are on an (incredible for the UK) £90k/year.
The only way to reach the equivalent of $150k/year in the UK is to work as a contractor and be good enough to justify billing that much. As a normal employee you won't see that.
My point is - it's impossible to judge everyone in the world by the American pay standard. Would I make more money in the US? Maybe. Would my standard of living be better? Also maybe, but I lean towards no with this one. But it's almost certainly not true that by making less than $150k/year you're underpaid in a place like the UK.
I worked for a US/UK company with its engineering HQ in London until recently and was earning drastically more than that. Now, I was an early stage employee and doing unique work for the firm. That position wasn't advertised - I created it. But some of the more senior engineers on my team (in the UK) were earning about $150k/yr GBP equivalent, a bit more in some cases.
Are salaries in the UK lower than in the USA, yes, absolutely. They are not that much lower than non-SF jobs in the USA.
Putting aside the question of whether there's an objective standard for whether someone is underpaid - it is not true that nobody in the UK makes $150k/yr as an IC SWE without being a contractor. Filter on the UK: https://www.levels.fyi/comp.html?track=Software%20Engineer
You'll see that mid-level (L4/E4) engineers at Google & Facebook easily break 150k; senior engineers (L5) start at ~225k and hit 300k. That's about 30-40% less than what Google & Facebook pay engineers in SV.
I also saw multiple other companies where engineers with less than a decade of experience were approaching or breaking 150k - Transferwise, Improbable, Palantir, Morgan Stanley, Booking.com, Cloudflare, Bloomberg, Yelp, Babylon Health, Goldman Sachs, Stripe, etc.
My entire network makes more than that in Dev and Arch roles in that part of the world. None of them have to live in London for them either.
Either you're underpaid, or C++ has been commoditized to the same point as PHP. If you value money over language, I'd switch. But given quite a few in my network are Java developers, I doubt language is the issue here.
Well then I have no idea how you and your mates do it. I know people who are in very senior positions at FAANG companies as well as couple big financial firms in the UK and not a single one of them makes over £100k/year. Two of them with PhDs in big data analytics and working in the industry. My own salary might be excused by being in the North East, but they work all over the place, in and out of London.
It sounds like you've got an academia background so if they're research or R&D positions, that might be why. Because they're competing in an already saturated field. Or there aren't many jobs but lots of graduates keen to work in your subfield who will do it for lower pay because they enjoy the work.
If you moved into in-demand fields, service delivery or consulting, you'd see 100k GBP as normal for seniors. The fields only require mastering the tools or domain and the ability to work with business stakeholders. That is from my experience, the majority of the software world.
I don't know what your friends told you, but either you misunderstood them, are talking solely about base (and see my other comment for why >100k base also exists in those roles), or were given inaccurate information. 100k GBP would be 45-60% of the credible range for senior engineer compensation at Google/Facebook in the UK (and maybe 55-70% for Amazon). That's so far outside of the standard compensation bands that other explanations are more likely.
You’re framing it the right way, and this is what we should work towards. But man, I long for the day when what you’re describing here is realistic.
In Norway, country of «holy crap, I’m an employer lobbyist and our salaries are so high we can’t compete in the export markets», you’ll only be around this level if you’re a freelance contractor billing 100% and doing all the sales work yourself.
There are some CTO and probably a few lead roles paying this much, but for an IC you’ll top out around $120k. Prove me wrong if other Norwegians have a better view :)
If you're reading this and are an startup founder hiring software engineers, one way to help kickstart the trend in this direction is to hire fewer engineers than you otherwise would have, and become _much more selective_ with who you hire, but pay them salaries that are competitive with not your local market, but with the hottest markets in the world (SF, NYC, etc), and actively advertise that you're doing so.
This will give your company a unique competitive advantage in capturing the best talent your market has to offer (and it likely has plenty of world-class talent to offer, but many of them end up getting brain drained away to those hotter markets today). It will also allow you to stay small for longer, dramatically reducing communication/coordination overhead and delaying the need to introduce management hierarchies, which is actually a substantial competitive advantage especially for early stage companies where agility and flexibility is the key to success. If all that's not enough, it will also do wonders for retention since it's basically a semi-permanent golden handcuff.
Over the long term, other companies in your market will end up having to compete with _you_ for talent, which raises the boat for everybody and helps your local market flourish with engineering talent and reverse the outward brain drain trend.
The unwillingness of employers in other markets to compete for talent outside their local maxima, optimizing for short-term self-interest over the long term health of the local talent market that they depend on for global competitiveness, is a true tragedy of the commons situation, and is a huge part of what makes Bay Area startups so dominant.
It's also what forced my hand into moving to SF myself. It would have been extremely financially irresponsible of me to stay. By leaving 5 years ago, I tripled my salary compared to competing local offers, and one job change later I'm now making more than double of that (at a startup, not at one of the big tech corps).
Nowhere in the world outside SF/NYC is there so much VC money that can support paying developers those salaries.
I would say over 90% of tech companies make their money from local markets. You can pay your developers as much as you make from your local market.
As for hiring. You have no idea how well someone is going to work out. Some people are really good at interviews but turn out to be terrible employees and vice versa. This is why the hiring process in tech tends to be pretty convoluted and broken in general. No one can figure this out. The laws regarding hiring are also much less liberal outside of CA. Hiring and firing is severely restricted in many places.
Very few companies are in the position of being "unwilling" to pay developers more. Some with plenty of cash are even simply limited by the tax laws how much they can pay. The cost of paying someone too much over local market rate incurs obscene tax costs.
> The cost of paying someone too much over local market rate incurs obscene tax costs.
This is fascinating to me, do you have any examples of jurisdictions where this is the case?
Here in Germany the “taxes” (they’re technically mandatory insurances) than an employer will have to pay on top of the gross salary all have a salary cap, the largest one being around €85k. After that any increase in gross pay has no additional cost. Of course my personal tax rate might take a hike but that’s not the concern of my employer.
For slovenia taxes are progressive, above 10k a month is the highest bracket and taxes are 61%. If you want your employee to make 10k a month, your company pays 24k. If you want your employee to make 5k a month, the company pays almost 12k.
I think that’s a foolish comparison. When talking about these super high SF salaries, folks are talking about _gross_ salaries. Nobody will reject a higher salary because they’ll have to pay more taxes.
A lot of the conversation is about the value of the developers work being high enough to warrant higher salaries. With that argument we should look at gross salaries + taxes/fees paid by the employer on top of the gross salary.
Your personal tax rate is between you and the state.
I was not talking about a personal tax rate. My point was that employers can not pay anywhere near SF salaries because some places tax high salaries so severely. It is not a matter of employers being unwilling. A rich company can't just decide to pay people at SF levels and expect to create a local silicon valley.
One key part of the suggestion that might have been overlooked was to hire fewer engineers than you would have otherwise.
This could mean hiring 1 really amazing engineer instead of 2 or even 3 average ones depending on the realities of your local market, and pay them based on what it would have cost you to pay the 2 or 3 engineers combined.
This is always a choice you have available, unless you're bootstrapping and can't even afford to make the first hire at those rates, at which point you're probably not looking to compete on the global stage to begin with, so this suggestion doesn't really apply.
If a company knows that it'd actually cost 300k to hire the local kind of engineer that could make 150k in the Bay Area, that company is either going to move to the Bay Area or hire Bay Area-like engineers as remote contractors to get their 150k worth of engineer for 150k.
The "able to pay" part will resolve itself if you manage to start a sufficiently successful startup. Eventually through high enough profits, since the startups that turn into global leaders in their field are more profitable per employee than anything a local non-tech company can compete with.
Getting to that point is a bit of a chicken-and-egg problem, though. And firing policies is a political barrier that's hard to avoid. I suppose you could keep everyone on as contractors, paying them standard rates but going to them directly, not through an agency. That would land the salaries in the region suggested, and you'd still have the ability to fire without cause.
There are more silicon valleys, like Tel-Aviv or Shenzen, but arguably the Bay Area is the only one merit-based. Good luck getting funded at the other two as a foreigner.
Interesting thoughts. I think you're onto something.
Going off on a tangent: I personally won't leave for California/SF since I have family here and won't put the obviously massive financial advantage ahead of that.
But I did consider this when I was in my twenties. It wasn't a super easy choice. Interesting to hear that someone have taken the leap. Not multiplying one's salary by 3-6x could indeed be described as quite financially irresponsible, and the alternative has to be pretty important to pass on that.
Companies that pay well in the US also provide good healthcare benefits. There are some weird setups like HDHPs where they give you free money at the start of the year, then immediately charge you so much for prescriptions that it gets used up again, but I think this is a way to let us farm credit card points.
I lived in the UK with all those things you describe, but I still made a point of billing my Bay Area rate because that is what the work product of a software engineer is worth on the market.
So, no. Even if you live in your parents basement and they cook your meals and take are of your other expenses, you should still approach your work life as though you were an adult.
Never lived in the US (and haven't lived in the UK for years) but the idea that you need a SV salary to get health care which meets or exceeds that of the NHS sounds a bit suspect.
From what I know, moving to US from a country with good socialised health care is a lot like selling a lot of put options on your health with different strike "prices". You might get rich, or if you are very sick, you are bankrupt.
Multiple studies have shown that Kaiser Permanente (an integrated health insurance/care provider—basically a non-governmental equivalent of the NHS in comprehensiveness—that is available in many US states) is more efficient and effective than the NHS for about the same cost.
You seem to have some simplistic view of how global economy works if you think all around the globe people should be payed the same for the same profession. Unless you work as freelancer in which case most of the time you have to pay your own taxes(which in most countries will amount to a big percent of your paycheck), you will get salaries according to the local market price standards regardless of what your peers in another country get. There are at least a few reasons for that one of which is that the market would not allow for huge disparities in salaries compared to other professions and to the same profession with local funding. You can try to negotiate good bonuses and/or equity but that is not mandatory and it is as much as you can get.
Actually, I have no intention to "retire". (In recent years I've taken the month of July off to take my family sailing; I can easily imagine taking longer stretches off, and/or shifting my time further from paid work towards hobbies... and at some point maybe even pivoting to writing and making music full-time.) My "ikigai" is, thankfully, mostly decoupled from making money per se.
When you realize how high cost of living is in cities paying those salaries, how much education (for potential kids) is, how you must save for your retirement entirely on your own... and then of course insane out of pocket medical costs... you soon realize that when you adjust for lifestyle you may be in fact much better off than the person with stratospheric salary.
I'm in the bay area. For what it's worth, my personal out of pocket max for healthcare is something like $2500/year, and they were only half-joking when I got the "million dollar work-up" last year at UCSF. I spent 3x that when my dog ate a corn cob... There is the additional cost of premiums for the rest of my family, but it's not absurd.
Real estate and property tax is rediculous, state income tax is high, and restaurants around here charge $18 for a hamburger these days. We're going to have to move once the kid(s) are old enough to be hindered by the bad schools. It's enough to perhaps make the high salaries not quite so competitive, and especially so if you need to pay for private school.
Salary is only a partial picture of compensation in the bay area, though. If you're a software engineer at a FAANG type company, you're potentially getting 1-2x your salary between bonuses and equity. If you joined early on at a start-up that's doing well, you're perhaps getting set up to spend your 40's mowing lawns like Forrest Gump if you want. It's enough that, even if you take very conservative career choices, you could work hard out here for a decade while living comfortably, then move somewhere else, buy a nice house outright, and work for fun while not stressing out about money ever again.
Right. A very, very ordinary apartment in NYC is $6000/mo. Figure 30-40% of your salary for taxes. If you made only $240K in NYC, your apartment would use up fully half of your take-home.
Even assuming this is true ($6k a month sounds absurd), this is a bad argument. The old "rent should cost no more than one third of your income" rule is basically for people around the poverty line. For them it's a question of whether they can afford to eat that month.
Just to give an extreme example: if Jeff Bezos uses half his income this year to build the largest estate the world has ever seen, he's still sitting pretty on the rest of it and has the largest estate the world has ever seen.
At a 35% tax rate, your take home income is $156K. At $6K per month ($72K/yr), you have $84K left over after rent. If this is you then YOU ARE WEALTHY. There is simply no getting around this. You are making more alone, after taxes and after rent than my partner and I have ever made together total in a year in our lives, and we live in a city with a relatively expensive rental market and are not "poor".
The absurd talk about "only" making over two hundred thousand dollars a year (plus whatever your partner makes if you have one) needs to stop. It's so out of touch with the norm in virtually every city in the world that it would be laughable if it weren't kind of sad.
People taking in $200k are not in any sense "very, very wealthy", except from a third-world viewpoint. $200k in today's dollars approaches what would have been called "middle class" a few decades ago, when there was one. Now you are only low, below $300k, and high, above $1M, with very few left between.
(In countries with regular health care and education, life costs less, so this about the US.)
The plutocrats have been very successful at deceiving American voters that they are not almost all now lower-class. The Powell Memorandum, 50 years ago, laid out the plan. It has been followed since then, and Americans now are routinely persuaded to vote against their own interests.
Wealth produced in the US has been rising as fast since 1975 as it did between 1945 and 1975, but normal Americans' income since 1975 has been flat. The whole difference has gone straight into the pockets of the extreme rich, and they are who are very, very rich. You and I have no concept of how different their lives are.
In 1975, regular parents could pay for putt their kids through college while paying their mortgage.
>>People taking in $200k are not in any sense "very, very wealthy", except from a third-world viewpoint.
Mate, I don't know what to say. You live in a bubble made out of solid stone granite. Literally anywhere else outside of US that kind of salary makes you "very very wealthy". Within top 1% definitely. So I don't know if you think anything outside of US is third world? Or what?
>>(In countries with regular health care and education, life costs less, so this about the US.)
Simple: Outside the US, $200k is very comfortable, except in certain places like Moscow and London.
In the US, it would be lower middle class, if there still were a middle class. So, instead, it is high in the lower class. If you consider it wealthy, then congratulations, the propaganda is strong with you.
I'd love to know where and how, because I have never seen a position offering £100k and above anywhere in this country. I have friends working as seniors for Facebook in London and they don't make £100k.
I have two guesses - either you were a contractor, or worked for a bank where I've heard it's possible to cross £100k salary. Or third option, you mean <£100k of salary + bonuses?
The one I worked for wanted me to move to London, and I said fine, as long as you give me a comparable standard of living.
Nope, they took my Irish salary and converted it to GBP, and that was it (this was post Brexit, btw).
Obviously, I didn't move. And working with any engineers in the London office was a massive pain as anyone without family commitments worked in London for a year, and then transferred to the US for a massive salary bump.
The core issue is that FAANG don't benchmark against finance in London, which means that pay is pretty out of wack.
For instance, I got a 150K offer from an investment bank in London around that time, and I'm definitely not as useful in finance as I would be in tech.
It just blows my mind that they haven't fixed this to be honest (I suspect that they'll have to, now that Brexit has actually happened).
Almost certainly the conversation is about total comp rather than base salary; at FAANG the difference is marginal (especially since at Facebook, there's no 1-year cliff; your equity starts vesting immediately every month).
But even putting that aside, most senior (E5) Facebook engineers in the UK make 125-160k base salary in the UK. Even if that's denominated in USD, that still leaves a significant % breaking 100k GBP base.
As I explained in other comments, salaries that high don't exist in the UK. And you can't just negotiate to have your salary be double the market rate where you live, no matter how good you are. Also, isn't Sydney the most expensive place to live in the world? My mortgage where I live is £600/month for an actual house, what good does making 2x the money give me if I have to pay 4x the money for rent?
Lol, I'm a lead C++ programmer in the UK and I don't make that much. It's American salaries as a whole that are completely stratospheric.