Comparing Software Engineer Salaries Across Cities

Methodology

To construct this analysis, cost of living was estimated by taking the sum of the rent for a 1 bedroom apartment in the city centre and the cost of living for 1 person excluding rent off of Numbeo . This sum was then converted from whatever currency it was in to USD and taxes were determined using the website Neuvoo while average base salaries were taken from Glassdoor.

Cities Chosen

The cities chosen for comparison were Montreal, Toronto, Ottawa, Edmonton, Calgary, Kitchener, Vancouver, Seattle, San Francisco, New York City, Boston, Portland, Austin, Washington DC, Denver, Chicago, Zurich, London, Paris, Amsterdam, Stockholm, Barcelona, Copenhagen, Dublin, and Berlin. To determine this list, I created an initial list of cities from hearsay, the 2019 Scoring Tech Talent in North America report, as well as The European Talent Landscape report. I then filtered the list by cities that I would be interested in living in order to obtain the list you see before you.

Average Base Salaries

To start my analysis, I went through Glassdoor and obtained the average base salary for "Software Engineer" in each city. This is not a perfect means of capturing the average salary of software developers as it is possible that folks are posting their salaries under titles such as Back-end Developer or something else but doing it this way offers a reasonable proxy.  

Comparing salaries across all mentioned cities

From the chart above, we see that the usual hearsay about software developer salaries seem to be validated as American salaries tend to be higher than Canadian and European salaries with San Francisco exceeding everyone else. The only surprising result (at least to me) from this chart would be that the average salary in Zurich seems to be comparable to San Francisco.

Cost of Living

Cost of Living 

When considering cost of living, nothing surprising pops out. San Francisco and New York City top the list with other well-known cities such as Toronto, Vancouver, and Seattle trailing them. However, considering the absolute cost of living isn't particularly useful as the income one makes within that city might make living there worth the cost. Hence, it is useful to take a look at the percentage of one's salary that cost of living can take up.

From these percentages, we can see that Toronto and Vancouver have a cost of living that is surprisingly similar to San Francisco and New York City once we adjust for incomes which explains much of the dissatisfaction surrounding Canadian tech salaries that I personally have seen.

Taxes

City tax rates in %

From taking a look at the average tax rates across all of the jurisdictions, we obtain the surprising result that tax rates tend to be fairly even across all of them for the average software engineer with the notable outliers being Amsterdam and Copenhagen.

Net Income

The cornerstone of this analysis is net incomes. From deducting taxes and cost of living, we can see how much money in USD the average software developer is likely to have. From this, we see that Zurich and Seattle are clearly the top performers in this analysis.

Conclusion

This analysis is not perfect as it does not account for how the hiring market differs for different levels of seniority. It also calculates cost of living based on the cost of living downtown so it ignores that one could save money by living further out. It also does not account for culture, equity compensation, bonuses, the availability of jobs within the city itself, and the difficulty of immigration. So, it's clearly not perfect. That being said, I did find conducting this analysis to be a interesting means of understanding the geographic characteristics of the hiring market.

from Hacker News https://ift.tt/3dd5UYB