Cloud Software Engineer Salary – FAANG (Facebook, Amazon, Apple, Netflix and Google) and Tier 1 technology companies are known for paying high salaries to software engineers.
But how high are the earnings of these companies? How much does technology pay for different positions and companies? How do they compare to the US national average? Why do FAANG companies pay so much? How can one earn this reward?
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If you are curious, we will answer all these questions and more in this article. Here’s what we’re going to talk about:
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Before we go into detail, let’s understand the different parts of the salary. The compensation structure at FAANG and Tier-1 companies typically includes three main components:
The chart below shows a company-wise salary comparison for entry-level software engineers. Let’s look at the difference between FAANG companies like Google, Facebook, Apple and Amazon versus Tier-1 companies Oracle and Microsoft versus Tier-2 companies Cisco and IBM. The compensation figures shown below include salary, stock and bonuses.
As you can see, salaries at FAANG and Tier-1 companies are comparable for entry levels, but salaries at Tier-2 companies are much lower. For example, the average compensation for Oracle and Apple is $176,000 and $172,000, respectively – almost identical. But if you compare the salary of Google (Tier 1) to IBM (Tier 2), the difference is huge – $ 188,000 against $ 98,000.
Although it’s obvious at the entry level, the pay gap between FAANG and non-FAANG companies really starts to show as we move up the ladder by level.
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Here, we see that the average compensation for a Senior Software Engineer at Facebook ($380,000) is twice that of Microsoft ($182,000).
At a high level, we see that there is a big difference between FAANG and Tier-1 companies like Microsoft and Oracle.
The difference in pay scales between FAANG and non-FAANG companies continues to widen at every level. For example, a Senior Engineer at Microsoft earns $500k (above the band), while Google pays about $1.2 million – about 140% more for the same position.
To put things in perspective, here are the average annual salaries of software engineers in various positions working at Google, Facebook, Apple, Amazon and Microsoft.
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The salaries of FAANG companies increase with seniority or status. Read the 10 Highest Paying Tech Jobs at FAANG Companies to learn more about the highest paying jobs and companies for software engineers.
Also, read the Highest Paying Tech Jobs and Skills in 2022 to learn about the hottest areas in tech to earn a good salary.
Google and Facebook are the two companies that pay the highest salaries to software engineers in the US. There is little difference between the two, even at a high level.
For example, Microsoft, which invests heavily in games, can pay higher salaries for game developers than other companies. Similarly, salaries offered by Oracle to engineers with Cloud Computing skills are not only comparable but sometimes higher than those offered by Google and Facebook for the same skills.
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Not all companies use the same technology. Therefore, compensation also depends on the type of talent the company needs and how competitive it wants to be.
According to the US Bureau of Labor Statistics, the average annual salary for Software Developers and Analysts and Software Quality Assurance Analysts in 2019 was $111,620. The 90th percentile’s earnings were $164,590.
At $181,000 and $188,000, Google and Facebook, respectively, offer the highest salaries at more than 90 percent of salaries in the US.
We have noticed that FAANG companies such as Facebook, Apple, Amazon and Google are the companies that pay the most for software engineers. But why do they pay such a high salary?
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Twenty years ago, there was a clear difference between what large companies offered software professionals and what small startups offered.
Large companies, such as GE and Boeing, are known for offering employees job stability. Many people join these companies willing to work there until they retire, despite the system and the slow pace of innovation.
Small companies offer faster innovation, faster job growth, and the opportunity to build wealth quickly enough for early retirement. However, the problem is that there is not much job security, as the survival of these companies themselves is not stable. Beginners are always a risky proposition.
In the US, buying a house is becoming more and more difficult, as an employee of a large company. Many homeowners spend up to 50% of their income to buy a home. Financially, small companies offer faster job growth and higher earning potential.
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As a result, large companies begin to lose top talent to small companies. To balance the situation, large companies have been pressured to grow faster than the market with their boards and provide unlimited returns. However, this is not possible without the right talent. To stay competitive and attract talent, large companies offer higher salaries. This was successful and is still a tactic used today.
With the right talent, large companies can now innovate better and grow faster, making them just as attractive as smaller companies. Faster growth and innovation lead to better products and higher profits, allowing large companies to maintain a competitive wage scale.
Tech startups offer ESOPs (Employee Stock Options) to drive employee ownership. This serves as a great challenge for high-tech talent. However, technology company valuations are increasing rapidly, making the equity portion of a person’s income a fast-growing asset.
High-tech stocks have grown at a CAGR of 20% over the past decade, and have doubled the equity portion of individual compensation in less than four years. Top technology companies are also publicly listed, making these stocks liquid.
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The high growth potential and liquidity of the share of earnings offered by high-tech companies makes the compensation offered by FAANG companies significantly higher than that of startup or Tier 1 companies. -2.
All FAANG and Tier-1 companies operate on a large scale, serving the needs of millions of customers. Building, maintaining and improving these systems requires the brightest engineering minds. Therefore, attracting the right level of talent is critical to the survival and growth of FAANG companies. Another way for FAANG companies is to offer very high compensation.
If Google, Facebook and other high-tech companies and FAANGs don’t attract the best talent, they will probably compete with them. Many talented engineers choose to start their own businesses or create their own products, which can capture a large share of the market.
In this case, FAANG companies will end up paying to gain or destroy the competition. One way to avoid this is to attract and hire skilled engineers.
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The obvious way to do this is to join a FAANG company. But joining this coveted company is no small feat. Take Google, for example – the acceptance rate on Google is around 0.2%. To get an offer from a FAANG company, you need to:
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Some companies, such as Microsoft and Oracle, offer salaries comparable to FAANG companies at the junior level; however, at higher levels, the difference becomes more pronounced. To earn a FAANG level salary in a Tier-2 company, you need to work for a long time and be promoted to a higher position or have special skills required by a particular company.
However, in the same situation, with the same experience, it will not be common to get as much money from non-FAANG companies as from FAANG companies.
Yes, more and more startups can now offer FAANG-level rewards. However, pursuing a startup career can have its pros and cons. Be sure to weigh your options before making a decision. Read WHY vs. Startups: Which is Better for Software Engineers? and How to Get a 500K Job in Tech – Finding the Right Company for more information.Software Engineering Salaries in Europe vs USA (2021) Software engineering salaries can vary greatly depending on the field of work so we have compared average salaries of software in the USA and Europe. (eg London).
Software engineering salaries have exceeded the national average over the past 20 years with the median US engineer earning more than $1,800 per week.
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The average salary for the same role varies greatly depending on various factors, however, including company size and industry but the most important factor is
. Where a software engineer in India can expect to be paid R563,660 / $7,560 per year, the same position in San Francisco would earn at least this per year.
We have compiled a list of average salaries for various software engineering positions in Europe vs the United States. Specifically we break down the average annual compensation you can expect to earn per city (for 4 different cities) in the United States and
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