Software Engineering Salaries in Europe vs The United States (2021)
Average salaries differ depending on various factors, including location, company size and industry
Software engineering salaries have outpaced the national average over the last 20 years with the median software engineer in the US earning more than $1,800 per week.
Average salaries for the same role differ strongly depending on various factors, however, including company size and industry but by far the most significant factor is location. Where a software engineer in India may expect to get paid ₹563,660 / $7,560 per year, the same position in San Francisco would earn at least this per month.
The following is a breakdown of the different average base salaries per city for 4 different cities in the USA and Europe across various different roles. All data collected is from Glassdoor.
Junior Software Engineer
According to Glassdoor an entry level software engineer with less than 2 years of experience earns on average:
- San Francisco: $87,798
- New York: $76,265
- London: $34,853
- Amsterdam: $40,654
- Average: $60,000
Software Engineer
A software engineer with 2–5 years of experience would expect to earn the following yearly wage on average:
- San Francisco: $128,676
- New York: $133,068
- London: $63,000
- Amsterdam: $60,000
- Average: $96,000
Senior Software Engineer
A software engineer who has at least 5 years of experience earns the following on average:
- San Francisco: $175,669
- New York: $147,816
- London: $86,350
- Amsterdam: $86,000
- Average: $126,000
Lead Software Engineer
If you have more than ~8 years of experience as a software engineer you would expect to earn the following salary:
- San Francisco: $113,656
- New York: $132,086
- London: $85,000
- Amsterdam: $86,000
- Average: $109,000
DevOps Engineer
A DevOps engineer with a few years of experience averages the following yearly salary in the US and Europe:
- San Francisco: $155,055
- New York: $140,738
- London: $84,750
- Amsterdam: $58,200
- Average: $109,000
Engineering Manager
An engineering manager who has at least 5 years of experience as a software developer and at least 1 year of management may expect to earn the following salary:
- San Francisco: $201,053
- New York: $176,462
- London: $94,293
- Amsterdam: $115,289
- Average: $146,500
Director of Engineering
A software engineer who has at least 10 years of experience in both technical and management roles may earn the following as a director of engineering. It should be noted, however, that the range for which you might expect to get paid as a director of engineering can vary widely. Once you have reach this level, salary becomes more linked to the size of company and team whom you will be leading.
- San Francisco: $202,208
- New York: $174,123
- London: $124,082
- Amsterdam: $101,333
- Average: $150,000
Data Analyst
According to Glassdoor a data analyst with around 1 year of experience may expect to earn the following salary:
- San Francisco: $92,112
- New York: $73,222
- London: $43,022
- Amsterdam: $63,798
- Average: $68,000
Data Scientist
Data scientists are one of the most in demand jobs in the world right now and as a result have higher average salaries than their software engineering counterparts. For example, a data scientist with 2–4 years of experience would expect to earn the following yearly wage:
- San Francisco: $165,225
- New York: $114,906
- London: $72,478
- Amsterdam: $101,064
- Average: $113,000
Senior Data Scientist
A software data scientist who has at least 4 years of experience earns the following on average:
- San Francisco: $143,839
- New York: $131,902
- London: $56,732
- Amsterdam: $101,064
- Average: $108,000
Lead Data Scientist
If you have more than ~5 years of experience as a data scientist you would expect to earn the following salary:
- San Francisco: $165,475
- New York: $159,739
- London: $87,048
- Amsterdam: $77,726
- Average: $122,000
Machine Learning Engineer
Machine learning engineers are at the intersection of software engineering and data science: 2 sought after skills. Given this, salaries can be much higher even for a machine learning engineer with only a few years of experience. If you have more than 2 years of experience as a machine learning engineer you could expect to earn:
- San Francisco: $165,625
- New York: $145,071
- London: $80,212
- Amsterdam: $105,679
- Average: $124,000
Data Engineer
Data engineering is one of the most in demand tech skills according to a 2019 survey which is reflected in the average salary. A data engineer with 2 years of experience earns the following on average:
- San Francisco: $142,106
- New York: $117,246
- London: $74,744
- Amsterdam: $67,392
- Average: $100,000
Senior Data Engineer
A data engineer with ~4 years of experience earns the following on average:
- San Francisco: $159,564
- New York: $147,844
- London: $80,883
- Amsterdam: $75,400
- Average: $116,000
Rising demand, limited supply
The salary breakdown above is based on the average salaries per year as posted on Glassdoor. Granted, there is an invisible range as it pertains to average salaries for the jobs mentioned above as there is missing salaries data. Some positions have a much wider range (e.g. Director of Engineering) in comparison to other roles with a higher supply of candidates (e.g. Junior Software Engineer)
It goes without saying however: all software engineering jobs are in high demand, especially those with a data focus. This can be seen below where the jobs with the highest project growth rate are data scientists, artificial engineers and data analysts.
Across the world, talented software engineers have been in high demand for more than 20 years and that trend doesn’t look to be going away any time soon. If we ignore the dot com bubble, the percentage of tech companies in the S&P 500 has been steadily increasing since 2002. This increase can be partly attributed to the rapid digital transformation that organizations are currently going through.
Overall, there are fewer qualified individuals in the employee pool, including annual graduates, than the number of software engineering jobs every year pushing salaries higher.
Software developer salaries by location
From our analysis, across the various specializations San Francisco and New York have the highest average salaries, which is obviously offset by the higher cost of living in comparison to London & Amsterdam.
On the other hand, software engineers in London and Amsterdam should expect a lower salaries than those living in New York or San Francisco. Still, the market and compensation for these specialized talents have been on the rise in the European region, which has seen experienced software engineers looking to immerse themselves in the vibrant cultures of these European cities choose to explore these cities.
Still, San Francisco seems to have a higher total compensation which includes base salary, bonuses, and in some instances, equity within the tech firms. The bonus schemes will often go as high as 20% of the base salary in cash. Senior engineers will also have meaningful equity as part of the packages presented to them.
Given that Silicon Valley is the global center of tech firms and startups, this has seen companies within these regions pull a more incredible pool of specialized talent. Specifically, San Francisco has tech supremacy, and the tech behemoths within these regions have the financial weight to pay out higher in all the job segments above. Directors of Engineers have the highest salaries at an average of $ 202,208 in San Francisco. In other words, the pool of talent is much larger in these areas which causes for a more liquid market. Therefore a position which is in highest demand (e.g. Data Scientist) may actually expect to pay comparatively higher in places like Amsterdam.
Junior vs senior software engineering salaries
As is expected junior software engineers earn the lowest salary, according to Glassdoor. This is purely a market dynamic given the quantity of junior software developers vs those with experience. This also makes it harder for junior engineers to negotiate salaries when offered a job. Once a junior gets a few years of experience under their belt however, they create much more leverage when negotiating salaries.
These individuals will often be fresh graduates or specialists with less than two years of experience. To negotiate higher compensations than what is stated above, junior engineers may have to take a risk on high-growth companies who are either on the road to becoming a public company or by joining before an IPO.
From our analysis, junior software engineers are paid the highest comparative wage in San Francisco when we normalise by location. For example, a junior engineer living in Amsterdam would expect to get paid around 47% the salary of a senior developer (i.e. $47k vs $86k). In San Francisco a junior developer would expect to get paid almost 69% of the salary earned by a senior engineer (i.e. $88k vs $128k). If you are based in Europe, junior software developers in London are compensated higher than Amsterdam professionals.
Conclusion
The current boom in the technology industry has meant that there are more software development and engineering jobs. Overall, tech companies or recruiters seeking different specialized engineers in the USA offer better salaries than those in Europe, however when we consider living costs, the difference in marginal.
When looking for a job you also want to consider that education, housing, health insurance, and social security are significantly cheaper in Europe. Besides, in Europe, you are likely to enjoy greater job security than in the USA, as European employers will often have to deal with more stringent regulations pertaining to firing you. In conclusion, the compensation for software engineers both in the United States and Europe is trimodal in nature. Specifically, local competing companies offer lower salaries as compared to their regional or global counterparts.
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