date icon December 27, 2023
Time icon 7 MIN READ

Decoding the Numbers: Understanding the Average Software Engineer Salary

CEO & Founder at CodeOp

Are you considering a career in coding, but curious about the economic future of the tech industry? As technology continues to drive innovation and growth and the demand for Software Engineers with solid coding skills is constantly on the up, it’s important for you to understand the average software engineer’s salary.

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Photo by Fotis Fotopoulos on Unsplash

In this article, we’ll decode the numbers and shed light on the factors that influence a software engineer’s salary. From entry-level positions to senior roles, we’ll explore the latest salary trends and delve into the regional and industry-specific variations that shape earning potential. This insight into software engineer salaries will provide valuable perspective when deciding if a career in coding could be right for you. 


Factors influencing software engineer salaries

When it comes to understanding the average software engineer salary, it’s important to remember that there are various factors that influence compensation. Experience level, education, technical skills, industry demand, and location all play significant roles in determining salary levels for software engineers. It’s worth taking into consideration that employers often take these factors into account when structuring compensation packages. Having a good grasp of this will help you to leverage these factors when negotiating salaries.

Software developers with specialist skills such as machine learning, artificial intelligence, or blockchain development tend to command higher salaries due to the ever-growing demand for this expertise in the tech industry. Additionally, the size and financial health of the employer can also impact salary ranges, with larger tech companies typically offering more competitive compensation packages. Understanding these factors can help you navigate the complexities of varying software engineer salaries and make informed decisions about what types of roles and companies you might want to apply for.


Average software engineer salary by location

The average software developer salary can vary significantly based on geographic location. For instance, a software developer salary in tech hubs such as London, Silicon Valley, or New York City is often higher due to the high cost of living and the concentration of tech companies in these areas. According to Glassdoor, the average software developer salary in London is around £72,000. Stateside in New York, according to Indeed the average software engineer salary is about $145,000.

On the other hand, software engineers in smaller cities or rural areas may experience lower salary ranges, but they may benefit from a lower cost of living. If you compare the London average software engineer salary of £72,000 with the UK average of £50,500 you can see how large cities command a much higher salary. 

It’s definitely worthwhile spending some time researching and understanding the average software engineer salary based on where you live and work, so you can set realistic salary expectations. That’s not to say that you shouldn’t negotiate for the highest possible salary, but knowing the average software developer salary can help you to manage your own expectations. 


Average software engineer salary by experience level

Like in many industries, experience level is a significant determinant of software engineer salaries. An average entry-level software engineer salary in London, according to Glassdoor is about £38,000, compared with an overall average of £72,000 and a career trajectory of up to £95,000 for a Senior Software Engineer salary. 

As you can see, as software engineers gain experience and expertise in their roles, they become eligible for higher compensation, often through promotions, performance-based raises, and bonuses.

When you’re evaluating potential companies or even job offers, it’s helpful to consider the specific potential for career growth and salary progression. For example, while larger companies often offer higher-than-average salaries, promotions and salary increases may be more restrictive. On the other hand, smaller companies and startups might offer initially smaller salaries, but you may get more opportunities to expand your skills and take on more demanding projects. In turn, this may enable you to ‘grow with the company’ and get pay rises and promotions quicker. 


Average software engineer salary by industry

The industry in which a software engineer works can significantly impact salary levels. For example, if you take on a software engineer role in finance, healthcare, and technology consulting you’re more likely to command a higher salary due to the specialist nature of the work and the demand for technical expertise in these sectors. On the other hand, if you choose to work as a software engineer in the nonprofit sector or for government agencies, you may experience lower salary ranges, but you may find fulfilment in more mission-driven work.

Again, this all comes down to personal priorities and career motivations. While you may not be in control of your location and you definitely have to start your coding career at ‘entry-level’, if you are motivated by financial wealth and security you should consider becoming a full stack developer (as full stack roles can command an even higher salary) in a larger company in the finance, healthcare or tech industries. Alternatively, if you’re more driven by making a positive impact with your work, then working as a software engineer in the nonprofit sector, with a lower salary could be the right pathway for you. 


Additional factors affecting software engineer salary

As well as experience level, location, and industry, several other factors can influence software engineer salary levels. These factors may include the demand for specific technical skills, the cost of living in the location, and the prevalence of remote work opportunities. And don’t forget – there are other benefits to take into consideration as well as the salary, such as stock options, bonuses, and other perks which can impact your overall compensation package as a software engineer.

Increasingly, employers carefully consider these additional factors when structuring compensation packages to attract and retain top software engineering talent. When negotiating your new or next role as a software engineer, do make sure to find out the full set of benefits available to you. Even if a salary is a little lower than you hope, you might find other benefits to negotiate around for example, health and wellbeing, bonuses, and remote working. 

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Strategies for negotiating a higher software engineer salary

Negotiating your software engineer salary requires a strategic approach and a deep understanding of external market trends as well as the specific value that you can bring. Give yourself the best chance by conducting thorough research on industry-specific salary data, the cost of living in your target locations and the average compensation for your experience level, technical skills and desired company and industry type. Equipped with this data, you’ll be able to remove the emotion and confidently advocate for a fair and competitive salary offer during your negotiation process.

Employers with integrity will be prepared to engage in good faith, transparent and open discussions about compensation with you as a potential hire. They should have considered the market value of your skills, combined with their realistic financial capacity, and your potential for growth and development within the organization. By approaching salary negotiations as a collaborative process, both you and your prospective employer can work towards beneficial outcomes that work for both of you and reflect the true worth of the software engineer’s contributions.


Resources for researching software engineer salaries

Do spend some time with reliable, 3rd party resources to research average software engineer salaries in the locations, companies and industries you’re interested in. Online platforms such as Glassdoor, PayScale, and Indeed provide access to salary data, industry insights, and employer reviews that can inform your salary negotiations. 

By regularly using resources like these, you can gain insights into industry benchmarks and come to conclusions on the fairness of salary offers. 


Arming yourself with a nuanced understanding of average software engineer salaries is an important tool in your toolbox when it comes to navigating the dynamic landscape of the tech industry. By considering factors such as location, experience level, industry, and additional influencers, you can gain valuable insight into software engineer compensation trends and negotiate fair and lucrative salary offers that reflect your true value and potential.




What does a software engineer earn in the UK?

The average salary of a software engineer in the UK is £50,500; in London specifically you you can look to earn upwards of £95,000 for a Senior Software Engineer role.

Is it hard to be a software engineer?

Learning to code can certainly be difficult but by no means, impossible. Contrary to popular belief, you don’t need prior experience or skills in maths or science in order to learn coding and become a software engineer. What you do need, however – is patience, commitment and resilience. Once you’ve learnt the tech fundamentals, learning to code is often about learning to solve problems and knowing the right questions to ask. 

Author: Katrina Walker
CEO & Founder at CodeOp
Originally from the San Francisco Bay Area, I relocated to South Europe in 2016 to explore the growing tech scene from a data science perspective. After working as a data scientist in both the public...
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