It seems to be a common misconception that Software Engineers are incredibly wealthy individuals that make more money in a week than some people make in an entire year. While this may be true for some, this idea may be less connected to reality than one may think. So are software engineers actually rich? Let's find out!
Are Software Developers Rich?
The truth is that software engineers have the potential to become very wealthy but that does not necessarily make this every developer's reality. There are a plethora of variables that change the total income that a software engineer makes. Such as location, experience, job title and total income streams.
In this article, we are going to dive into each of these factors so we can build a better picture for how much software developers actually make.
From my research, it appears the most important factor for a software engineer's income is their location. It may not come as a surprise that engineers in developed countries will make more than engineers in developing countries. What is interesting is that the difference can be pretty significant. Let's look at the statistics by comparing America, Canada, the United Kingdom and India. Which should act as a very rough benchmark on the world market.
The U.S. Bureau of Labour Statistics, states that the median pay for a software engineer in America is ~$107,000 a year. Which works out to ~$52 an hour. This yearly income is considerably higher than the average income of an American in 2019 of ~$55,000 a year.
Canada and the UK paint a slightly different picture with their average salaries. While the average American can easily earn six figures a year, a comparable developer in Canada or the UK only earns ~$50,000(USD) and ~$41,000(USD) a year respectively, according to PayScale.
Finally, let's look at the average salary of a software engineer living in India. According to PayScale, the average yearly income of an Indian software developer is ₹531,524 a year. Which equates to ~$7,100 USD. That's a significant decrease from the American, Canadian and UK developers.
Why The Pay Range?
At this point, you may be asking yourself why on earth is there such a big pay difference? Well, it's important to note that it probably has nothing to do with how competent of a developer you are. The difference, again, probably lies in location. It is significantly cheaper to live in India than it is to live in America. The difference between American and other developed countries like Canada or the UK can probably be explained by larger tech hubs in America, such as Silicon Valley. Which has a significantly higher cost of living than most Canadian or UK cities. Even pay between cities in America can fluctuate based on the average cost of living.
Pay in developing countries likely also varies due to ease of access of a developer and competency in English literacy. It's much easier to get in touch and communicate with a developer who comes into work every day and lives in an English speaking country than someone who is 12.5 hours ahead of your time zone and speaks English as a second language.
Experience: Junior & Senior Developers
Another major factor in software developers' pay is years of experience. When job hunting, the terms 'junior developer' and 'senior developer' are used often to distinguish between roles. Although there are no set definitions for these terms. Generally speaking, a junior position is an opening role in a company while a senior developer is assumed to be well trained and able to work independently.
According to indeed.com, senior developers make roughly $40,000 more a year than junior developers. A significant difference! Obviously, this will also be dependent on the country being examined. It is safe to assume that the higher the median salary of a software engineer, the higher the pay difference will be between roles.
In addition to years of experience, the position within tech will also play an important role in your yearly income. This article by Tech Republic states that the 5 highest paying jobs for programmers are: DevOps Specialists, Data Scientists, Backend Developers, Full Stack Developers and Embedded Developers (in this order). So, it's important to note that every job title will also display a variance in total income made.
Although these areas seem to be the most profitable, it's important to note that all programming roles pay fairly well. So don't decide to work in one of these roles solely because you will make more money. If you're miserable in your job, no amount of money is going to make that better!
or maybe it will?
So far we have looked at salaries for programmers based on their location, experience and industry. However, a programmer's salary isn't the only factor in their net income. Programming is one of those fields where a developer can find multiple ways to monetize their skill set.
In addition to a yearly salary, software developers often benefit from yearly bonuses', dental or health benefits, and/or shares within a company. All of which can drastically affect the total income earned in addition to salary. Imagine working for Shopify when they were still a start-up and receiving shares? You would be pretty well off at this point in time!
Developers also aren't restricted to earning during the typical 9 to 5 office hours. There are a plethora of freelancing opportunities to help pad your total income. Many developers can make upwards of +$100/hr (USD) for their talent. Keep in mind that freelancing has a much higher ceiling than working for a company as there is no 'middle man' (your employer) who takes a cut for the work you do. So it's possible to even double your income by keeping your schedule filled with freelance clients!
Finally, developers also have the ability to build passive income streams programming that the average person cannot. By building passive income streams, developers can benefit from re-occurring revenue without putting in the additional effort every year.
So are software engineers rich? I think it's safe to say that the average annual income of a software developer can fluctuate significantly depending on location, work experience, job title, and additional income streams. In addition, the term 'rich' is subjective. A developer making six figures in India would be significantly better off than a developer earning the same amount in Silicon Valley.
One thing is for certain. Software engineers have the ability to build incredibly large income streams if they play their cards right. If you were ever thinking of starting a career as a software developer, there has never been a better time than the present.
So that's about it! If you want to know what it takes to become a good software developer, check out this article. The life of a software developer may seem luxurious on the outside, but it's a lot of hard work. Trust me. There's a reason software engineers are paid so much!