According to Dice’s latest Tech Salary Report, the average technologist makes an annual salary of $104,566, a 6.9 percent increase between 2020 and 2021. However, many technologists make far more—particularly at the tech giants such as Netflix, Google, and Microsoft, which are more than happy to shell out generous salaries and stock packages to retain their best talent.
How high can those salaries go? Levels.fyi, which crowdsources salary data from numerous tech companies, recently put together a report of the highest-paid software engineers—and some of the results are surprising. For instance, the companies offering the biggest payouts didn’t necessarily belong in the MAMAA (Meta, Apple, Microsoft, Amazon, Alphabet) collective of mega-tech companies.
Let’s look at the companies that offered the highest compensation to entry-level software engineers. Keep in mind that these aren’t company averages for software engineers; rather, at least one employee had the skills, experience, and negotiating skills to pull down the listed amount, which includes a mix of salaries, bonuses, and stock:
How does an entry-level software engineer earn a quarter-million dollars per year? It requires highly specialized skills. Two Sigma, for example, is a hedge fund that heavily leverages artificial intelligence (A.I.), machine learning, and distributed computing to help make trades. Whatever L1 engineer pulled down $250,000 no doubt had the background to help build and scale platforms featuring these technologies, despite their relative lack of experience (engineers in this tier have often spent 0-2 years in tech).
Roblox, an online game platform, also paid out generous salaries to engineers. Its job postings mention a variety of complicated skills including data analytics and machine learning; knowledge of multiple programming languages often pops up, as well.
Now let’s look at the other end of the scale: compensation for principal engineers. A few lucky engineers at Roblox and Facebook are pulling down somewhere between $940,000 and $1.2 million, and other companies aren’t far behind:
These kinds of engineers can have a sizable impact on their company’s fortunes, hence the massive compensation. “Typically 15+ years of experience,” is how levels.fyi summarizes a principal engineer’s background and responsibilities. “Usually less than 3 percent of employees in a company are at this level. Smaller companies may not have any individuals at this level. Impact spans across the company and sometimes industry. Expected to operate fully autonomously.”
Principal engineers are often tasked with bet-the-company initiatives, whether that’s a virtual reality (VR) ecosystem (in the case of Meta) or an updated search-engine algorithm (Google). To ascend to that level, you need more than just technical mastery—you need the “soft skills” such as empathy and communication that will allow you to manage multiple stakeholders, including top executives.