TLDR:The discrepancy of a software engineer salary is indeed extremely wide.
“Software engineer salary” is probably a search term we have used at some point with our favourite search engine. It could be either curiosity from the hype around tech salary or you are genuinely interested in a career in software development. The results from search engines are usually slightly disappointing with extremely wide ranges and most companies are generally unwilling to share the salary bands with their employees. Over time, as my experience accumulated in the industry, I have slowly painted a mental map of how much others are paid. (Sources: interviews, recruiters, hearsay, colleagues, managers)
|Junior||Graduate Engineer||0-2||£25,000 – £35,000||£28,000||This career path is typically reserved for computer science graduate|
|Junior||Junior Engineer||0-2||£21,000 -£28,000||£25,000||Self-taught, Hobbyist with a good understanding of the programming ecosystem.|
|Junior||Software Engineer||0-2||£21,000 -£28,000||£23,000||This is through a training school where your salary is capped.|
|Junior||Associate Engineer||1-2||£35,000 -£45,000||£40,000||This is the point where you are able to be productive with considerably less guidance.|
|Mid||Software Engineer||2-4||£40,000 – 65,000||£ 55,000|
|Senior||Senior Software Engineer||3-7||£65,000 – 85,000||£70,000||Companies tend to separate seniors into Senior I, Senior II, or even Senior III to give employees the sense of a promotion.|
|Principle||Staff Engineer||5+||£80,000 – 100,000+||£85,000+||This is sort of used interchangeably with Principle Engineer or just slightly below Principle|
|Principle||Principle Engineer||5+||£90,000 – £100,000+||£90,000+|
This table is an aggregation of my experiences with remuneration in the technology sector for permanent employees. The general rule of thumb for contractors should be at least 30% higher. These numbers are not absolute and I have come across mid-level engineers on £75,000 (c. 2021) and Senior Software engineers on over £120,000 plus stock options worth another £40,000 (c. 2020) within the company where I have worked. It is also extremely common in the industry for new joiners to receive a better remuneration package than existing folks. HR often uses existing team members’ salaries plus a markup for the next person with leniency on experience. In my previous role, a new teammate was hired as a mid-level software engineer and was offered £77,000, £9,000 above my rate. As we both got promoted to senior that gap was widened further.
My overall impression of the industry on remuneration is fairly positive. With a thick face and some luck, your remuneration is almost guaranteed to budge. Never take the very popular 1%, 2%, 3% performance framework at its face value (1% = below average, 2% = Good, 3% = Above average) There is always room to negotiate and remember once it’s set in stone you will be stuck with it for at least another 6 months.
Factors affecting your salary
There are a fairly large number of variables when it comes to software engineer salary. They all directly or indirectly affect your next raise and some may seem extremely unfair. Luck and timing are influential to a company when deciding how much to pay you.
The factors that mostly affect your salary:
- Your tenure with the company
- Size of the company
- Funding of the company
- The scarcity of the stack
- The industry the company is operating in.
- Your colleague’s salary
- Are you a disgruntled employee
- Your joining date (Employers intentionally hire at a certain date so you will miss the first calibration)
Industry – Unsurprisingly the industry your employers operate in has a fairly substantial impact on their remuneration. Some industries have a fairly difficult time when it comes to hiring and are happy to offer money to entice talents. These usually include Gambling, Cryptos, and others considered unethical for some. Technology giants like Google, Amazon Web Service(AWS), and Facebook are also known to pay considerably more and from hearsay, it’s 20%-30%+ above Table 1. Industries that scale extremely well will also pay more to attract talent, they usually require fewer employees and are able to serve a larger group of customers e.g. FinTech, which generally pays 10% – 20% above Table 1. Do bear in mind they generally do work you harder.
Tenure – the longer you serve within the same company the more likely for you to fall out of your current band. Especially in companies that heavily emphasise a 1%, 2%, or 3% performance framework. This may be shocking but banding is there to dissuade managers from asking for too much for their subordinates as opposed to fairly rewarding those served the longest within the same company. For example, you joined a company as a mid-level at £55,000 and you exceeded expectations in your next performance review cycle and received a 3 % raise which equates to £56,650. New mid-level recruits will probably receive £60,000. In my longest tenure, 4.5 years, I have completely fallen out of the band and candidates I interviewed were offered a substantial amount with a lesser job title in comparison.
Technology Adoption – Software development is supposed to be an iterative process spanning across an extended period. Unfortunately, this is usually not the case in companies that are less tech-savvy. Projects are either outsourced or contracted in-house and a popular tech stack is chosen for the ease of hiring. Once the product matures the team is disbanded. 10 to 20 years later the once popular tech stack is no longer and the skills pool would have dried up. The software engineer’s salary to maintain these products is usually through the roof.
The number of variables when it comes to a candidate’s offer is almost limitless and it is impossible to deterministic say how much is enough. Personally, I believe our remuneration is strongly tied to our impact on the business with the addition of a good manager. Your manager must fight for you in front of HR and other managers during calibration. In an ideal world, good learning opportunities and fair remuneration should be available to everyone. Fortunately, it isn’t uncommon to have both in the tech world.
Throughout my career, I have spoken to colleagues, managers and recruiters and come to the conclusion software engineer salary banding does exist but is not an absolute. It isn’t impossible for an exceptional software engineer to earn almost twice the amount others with share the same title. The title in our world is also not set in stone. The expectations and responsibilities of each company could be day and night.
Perks will always fluctuate as you job hop as employers are very likely to share a different view on what is best for their employees. Perks are usually a good indication if a company genuinely care about your well-being or vice versa, e.g. the duration of fully paid sick leaves, or parental leave policy. You should also always consider this to be part of your remuneration package.
|Holidays||Critical||24-25 are very common in the industry. Some companies will offer unlimited holidays but at the manager’s discretion. I personally would avoid those or get a pre-agreed number.|
I would also avoid companies pegging this to the duration of your tenure. e.g. 23 first year, 24 after at the end of the second year
|Sick Leave Policy||Critical||This is usually an indication of how well an employer looks after their employee. You should aim for a minimum of 4 weeks in total per annum. I have come across a range of 1 week of full pay to 8 weeks of pay.|
< 5% is considered low
= 6-8% is considered medium
> 10% is high
The highest I have come across is 5.5% and it’s considered low
|Additional Holidays||Nice to have||This has become more common as Employers focus on work-life balance. Some company offers an additional festive holiday|
– Birthday off
– Festive holiday
– Well-being day
|Health insurance||Nice to have||Some employers will only offer this perk if explicitly enquired as this is a BIK with tax implications. The highest cover an employer could opt for is “Medical History Disregard” (MHD) level of cover.|
|Dental Insurance||Nice to have|
|Bonus||Important||It’s important to bare in mind; £50,000 + 10% potential bonus is not the same as £55,000. |
The highest bonus I have come across is 12.5% (**VERIFY THIS)
|Company shares||Important||Depending on the size of the company and your seniority in the hierarchy|
|Buy, sell and carry over holidays||Basic||The rule of thumb is, sell or buy 3 days and carry over 5 days of holiday|
|Perkbox||Basic||A portal resembling voucher code websites. You are presented with cashback and a small discount for your day to day.|
I find it useful for it 2 free Nero coffee per month and discount cinema tickets.
|Cycle to work scheme||Basic|
|Learning Budget||Basic||This is advertised as part of the job ad £500 – £1,000. Do be careful as once you join this usually disappears or requires many hoops and loops with the managers.|
This usually includes the costs of attending conferences
|Professional Subscription||Basic||Some forms of Pluralsight or Udemy alike are fairly common and should be available to all developers|
|Beverages and Snacks||Basic|
|Travelling to other offices||Uncommon|
|Company-wide vacation||Uncommon||This is rare and usually only applicable to extremely high-growth or well-funded startups or SMEs|
|Misc activities||Personal Preference||Puppy day, yoga classes, team lunches|
|Product discount||Personal Preference|
|Volunteer day||Personal Preference|
If you would like to know my salary growth as a software engineer in the UK, do visit my ‘My Salary Growth as a Software Engineer in the UK‘