Software Engineers: Salary Analysis & Best Cities to Work

Think of a job you can do by yourself, with no pesky customers or coworkers, in any location that has internet access. If you thought about software engineering, you're not alone. This position seems tailor-made for those who want to work from home.

Software engineering salaries vary from state to state, and they're highest in parts of the country associated with the tech industry. You could, in theory, do this job from anywhere. You could probably work for almost any company that has something to do with computers. But if you'd like to make the most of your career opportunities and pull down the biggest salary possible, you should look for a job in a big city on the West Coast.

Run a search for the question, "How much do software engineers make?" (Go ahead. We'll wait.) Your search results will include one hard number. Don't be fooled by it.

Agencies like the Bureau of Labor Statistics gather up salary information from across the country, and they slice and dice the data to come up with one average number.

• Location
• Seniority
• Education
• Industry

The final number is just an average, and honestly, it doesn't tell you very much.

According to the Bureau of Labor Statistics, the median annual pay for a software developer in 2018 was $105,590. The job outlook is good, with 24% growth expected between 2016 and 2026.

This can be encouraging news, depending on how much you are expecting to earn. But to really understand your earning potential, you'll need to consider geography.

In 2017, U.S. News and World Report examined the data and sought out the metropolitan areas that came with the highest software developer salaries. As researchers discovered, the best paying jobs were clustered in one part of the country.

• San Francisco, CA: $147,590
• Seattle, WA: $133,810
• San Jose, CA: $132,170
• Silver Spring, MD: $126,260
• Oakland, CA: $125,120

Look at this list carefully, and you'll notice that four out of five communities are on the West Coast. Dig a little deeper, and you'll see that three of the five are in California.

What's going on here?

Software developers need a bit of formal education and a lot of on-the-job experience. Your early employers help to form and shape what you know about how computers work and how programming language brings your ideas to life. Companies located close together can steal talent easier.

Analysts say that companies are facing a software engineering talent shortage. But it's not a lack of applications, they say. Plenty of people sign up to take the jobs they post. The problem involves lack of experience - job seekers don't use the code preferred by the company, they can't work quickly, or they don't know how to create systems that work without plenty of debugging.

By locating their companies close together, organizations hope to live with the shortage and woo talent whenever they can.

As a talented, educated, and experienced software engineer, you can take advantage of that close competition. If you live in one of those areas, you could almost name your starting salary. Live elsewhere, and expect a smaller paycheck.

Don't believe it? Let's examine software engineer salaries from other cities in the country, courtesy of the Flatiron School.

• Arizona: $71,180
• Wyoming: $70,400
• Montana: $46,510
• Colorado: $71,490

Clearly, moving outside of a tech hub has a big impact on the size of your compensation package.

We're not the only ones that spot tech company clusters. Major organizations have also noticed the trend, and many of them are changing course. New tech hubs are opening up and they could represent areas of opportunity for savvy software engineers.

• Salt Lake City, UT. According to Forbes, 66% of major commercial leases signed in 2018 went to established tech companies. They paid less per square foot for office space rentals and they tapped into a population that was eager for new jobs.
  
  
• New York City, NY. The Big Apple is another up-and-coming tech hub, now that Alphabet (Google's parent company) is crafting a campus in the heart of the city. The company plans to spend $1 billion on a campus, per Investor's Business Daily.
  
  
• Austin, TX. This hotspot is home to Apple, eBay, IBM, and Intel. Other companies are soon to follow. Plenty of talent, cheap land, and tax breaks could keep them there.
  
  
• Detroit, MI. This city was hit hard by the recession, and that left a hungry workforce ready to leap on the next big thing. It also meant plenty of open office space perfect for huge companies.
  
  
• Orlando, FL. The port position of this Florida city, combined with an absence of a state income tax, makes it an attractive bet for tech companies. Talent from Disney might be ready to make the leap, meaning an educated workforce is already present.
  

No matter where you live or what job title appears on your business card, you'll want to make as much money as you can. (Why are we working, after all?) Aside from experience, which is the best predictor of a big paycheck, there are some small steps you can take now to boost your chances.

First, pick the right coding language. Experts say knowing C++ leads to a salary of about $110,000, while leaning on JavaScript nets you less than $80,000. If you're not sure what to study, practice, and prove, search job listings in the area you hope to work within. Most will tell you the programs the company uses. That should be a starting point for your roadmap. Next, think about your salary in pieces.

• Signing bonuses
• Retirement account infusions
• Health care cost compensation
• Stock options

In some companies, these add-ons can bring your salary up by thousands. One developer, who writes for Medium, points out that his base pay is $130,000. But his stock options are $47,500. If you ignore the value of the stock, particularly if you work for a startup company that plans to go public within the next few years, you could be neglecting a huge part of your compensation package.

Finally, don't forget to factor in your cost of living to determine just how far you can stretch your salary. We used CNN's cost of living calculator to play with the numbers a bit. If you're paid $100,000 in San Francisco numbers, you'd need to make a lot less in some of the tech hubs we mentioned.

• Austin, TX: $50,519
• Detroit, MI: $50,260
• Orlando, FL: $49,481
• Brooklyn, NY: $94,393

Your recruiter may never talk with you about a cost of living adjustment. But if your money goes farther in a different town, and the salary is the same, you're bound to feel wealthier in one location compared to the other. That choice could leave you feeling richer each month.

It's smart to do your homework if you have experience in software engineering. Your skills are in high demand, and in some parts of the country, you can name your price - or even create a benefit package others might drool over.

We can help you refine your search.

We know it's hard to determine where to apply, and head-to-head comparisons on some platforms are impossible. Ours is different. We collect and collate jobs from all across the country and make the data searchable for you.

Seek out jobs close to home, or cast the net wide and look for jobs in far-flung places. Start browsing Joblist today to find the position that's right for you.

Software Developers. (April 2019). Bureau of Labor Statistics.

How Much Does a Software Developer Make? U.S. News and World Report.

The Average Starting Salaries for Software Engineers in the Western US. (January 2019). Flatiron School.

2018's Software Engineering Shortage: It's Quality, Not Just Quantity. (November 2017). Medium.

Watch Out, Silicon Valley: Why Tech Companies Are Going to Salt Lake City, Boston. (March 2019). Forbes.

Tech Companies Are Moving East, But Don't Cry for Silicon Valley. (December 2018). Investor's Business Daily.

Technology Companies Are Leaving Silicon Valley in Droves: Here's Where They're Going. (September 2018). Inc.

Software Engineer Salary Infographic. (February 2015). Adioma.

I Know the Salaries of Thousands of Tech Employees. (October 2018). Medium.

Cost of Living: How Far Will My Salary Go in Another City? CNN Money.