Software Engineer Salary: What You Actually Take Home

Give us the full breakdown.

Base salary: $185,000. RSUs: I was granted a package worth $380,000 at the stock price when I was hired, vesting over four years. So on paper, that's $95,000 a year in stock. Annual bonus target is 15% of base, which would be $27,750 at target. Last year it came in at 12.8%, so $23,680. Total comp on paper: about $303,000. That's the number I'd put on Levels.fyi. That's the number I told my parents.

Now here's the reality. The stock has dropped about 18% since I was hired. My RSUs vest quarterly, and each quarter's vesting is calculated at the current stock price, not the grant price. So instead of $95,000 a year in stock, I'm getting closer to $78,000. My actual total comp last year was about $286,000. After federal taxes, Washington has no state income tax, 401k contribution at the max, health insurance, and ESPP deductions, my take-home is about $14,200 a month. My rent in Capitol Hill is $2,400 for a one-bedroom. Car payment is $380. Student loans are paid off, thankfully. So I have about $11,400 a month for everything else. That's a lot of money. I know it's a lot of money. My college friends in Columbus are making $85,000 to $100,000 and they think I'm wealthy.

Are you?

Compared to Ohio, yes. Compared to the L7 on my team who makes about $620,000 in total comp, no. And that comparison is the thing that messes with your head. In any other industry, making $280,000 at 32 would put me in a category where I'd stop thinking about money. In Big Tech, I'm mid-level. There's a guy on my team, Henrik, he's 35, he's an L7. He makes approximately twice what I make. We work on the same codebase. We go to the same meetings. He's better than me, he's been doing this longer, he has more scope. But twice as much? The gap between L5 and L7 is bigger than the gap between my salary and the median household income in America. That's a strange thing to sit with.

My roommate from Ohio State, Jake, is a mechanical engineer at a manufacturing company in Columbus. He makes $92,000. His mortgage is $1,300 a month. He has a house. I rent. He has a yard. I have a building manager who sends passive-aggressive emails about recycling. On paper I make three times what he makes. In terms of life, I don't know. He seems less stressed. He doesn't check a stock ticker every morning. I do.

What's the path from here?

L6 is the next step. At my company, L5 to L6 is supposed to take 2 to 4 years and requires demonstrating "impact beyond your team." L6 comp is roughly $350,000 to $420,000 total. L7, which is Henrik's level, is $500,000 to $650,000. The jump from L5 to L6 is mostly about scope and visibility. You have to own a project that other teams depend on and show measurable business impact. I'm working on that. My manager, Greta, told me I'm "on the right trajectory" which is manager-speak for "not yet."

The thing about the comp ladder here is that base salary barely moves. My base went from $175,000 to $185,000 over four years. The real comp growth is in stock refreshers, which depend on your performance rating, which depends on calibration against your peers. An "exceeds expectations" rating gets you a refresher that might add $40,000 to $60,000 in annual stock vesting. A "meets expectations" rating gets you $15,000 to $25,000. The spread between a good review and an OK review is potentially $35,000 a year. That makes performance review season the most financially significant event in my calendar, more impactful than any coding work I do.

What is it about money?

Golden handcuffs are real and they're not a metaphor. My RSUs vest quarterly. Every three months, a chunk of stock appears in my brokerage account. If I leave, I lose the unvested portion. I have about $190,000 in unvested RSUs right now. If I quit tomorrow to join a startup or take a different job, I'd be walking away from $190,000 that becomes real money over the next two years if I just stay. Every quarter that I vest, the remaining unvested amount gets replenished by a new refresher grant. So the golden handcuffs never actually come off. There's always another $150,000 to $200,000 sitting on the table that I'll lose if I leave.

I think about leaving sometimes. Not because I'm unhappy. I'm fine. But "fine" is what the handcuffs buy. I'm not doing the most interesting work of my career. I'm not learning as fast as I was in years one and two. But leaving costs $190,000, and no startup equity package is going to match that with any certainty. So I stay. And every quarter I vest, and every quarter a new grant replenishes the unvested balance, and the departure cost stays constant. It's not a prison. Nobody's forcing me. But the door has a price tag on it, and the price tag is always just high enough to make me think twice. My friend Kyle left a year ago for a Series B startup. He's happier. He also forfeited about $160,000 in unvested stock. He says it was worth it. I believe him. I'm still here.

Let's start with the numbers.

Base salary: $165,000. That's my cash comp. That's what hits my bank account twice a month. Equity: I was granted 8,000 shares at a $2.1 billion valuation. The company's last 409A valuation, which is the IRS-determined fair market value, pegged the price at $42 per share. So my total equity grant is technically worth $336,000 over four years. That's $84,000 a year. Add that to my salary and my "total comp" is $249,000. That's the number on Levels.fyi. That's the number recruiters cite when they're competing with Big Tech offers.

But I can't spend equity. You can't buy groceries with shares in a private company. There is no liquidity event on the horizon. The company hasn't been profitable. The last funding round was 14 months ago and the CEO has been talking about an IPO "in the next 18 to 24 months" since before I joined. A colleague named Inga left six months ago with 12,000 vested shares. She tried to sell them on a secondary market. There were no buyers at the 409A price. She eventually found a buyer willing to pay about 60 cents on the dollar. Her $504,000 in equity was actually worth about $302,000, pre-tax, if she could close the deal. Last I heard, the transaction was still pending because the company has a right of first refusal clause that they're taking their time exercising.

So your actual compensation is...

$165,000. That's my salary. Everything else is, I don't want to say imaginary, but it's contingent. Contingent on an IPO happening, or a secondary sale being approved, or an acquisition at a favorable price. Any of those could happen. None of them are guaranteed. I live in San Francisco. My rent is $3,100 a month for a one-bedroom in the Mission. After rent, taxes, student loans ($340 a month, thanks ASU), and basic living expenses, I save about $1,200 a month. That's not bad. But it's also not what you'd expect from someone whose "total comp" is a quarter million dollars.

The disconnect between reported comp and real comp is the thing that drove me crazy when I was job searching. I got an offer from a Big Tech company for $195,000 base plus $80,000 a year in RSUs. Those RSUs are in a publicly traded stock. I can sell them the day they vest. Real money. But I chose the startup because the "total comp" number was higher and I believed in the product and I wanted the upside of pre-IPO equity. Two and a half years later, the upside is still theoretical and the Big Tech offer would have paid me about $50,000 more in actual liquid money by now. I don't regret it exactly. But I think about it.

What would make the equity worth it?

An IPO at or above the last funding round valuation would make my shares worth $336,000 over four years. If the company IPOs at twice the valuation, which is what the CEO hints at in all-hands meetings, my shares would be worth $672,000. That's life-changing money. A house down payment. Student loans paid off. A cushion that lets me take risks for the next decade. That possibility is real and it's why I stay.

But I also know the base rate. Most Series C startups don't IPO. Many that do IPO at a lower valuation than their last private round. The employees who joined at Series A and have the most shares are the ones most likely to make money. By Series C, the dilution means my 8,000 shares are a smaller piece of a bigger pie, and the pie might not taste as good as the pitch deck suggested. My friend Arturo works at a startup that went through a down round last year. His shares were repriced. His "equity" went from being worth $180,000 to about $70,000 overnight. He didn't do anything wrong. The market shifted. His options are to stay and hope it recovers or leave and write off two years of vesting. He's staying. But the energy is different now.

Money-wise, what is it?

How much of my financial planning is based on something I can't control, can't predict, and can't sell. I have a spreadsheet where I model scenarios. IPO at current valuation: I net about $240,000 after taxes on my vested shares. IPO at double: $480,000. Down round: $80,000. No IPO, company runs out of runway, acqui-hire: probably $10,000 to $20,000. I've spent more time on that spreadsheet than on my 401k. The spreadsheet is the most exciting financial document I own. It's also the most fictional. None of those numbers are real yet. My 401k has $47,000 in it. That's real. The spreadsheet has $336,000 in it. That's a story. I'm 29 years old and a meaningful portion of my financial future depends on whether a company I don't control decides to go public at a price I can't influence. That's not a complaint. I chose this. But it's a different relationship with money than my friends at Big Tech have, and nobody talks about it because admitting your equity might be worthless feels like admitting you made the wrong bet.

Give us your numbers.

Base salary: $128,000. Bonus target is 8%, but it usually comes in around 6 to 7% because the bank's performance metrics are conservative. Last year's bonus was $8,300. Total cash comp: about $136,300. No equity. The bank is publicly traded but software engineers don't get stock grants. We get a pension, which almost nobody in tech has anymore, a 6% 401k match, 4 weeks PTO, and health insurance that costs me $220 a month for the family plan. Benefits are genuinely good. The pension alone is worth, I calculated this once, roughly $15,000 to $18,000 a year in equivalent contribution.

Monica makes $97,000 as a principal at an elementary school. Combined household income: about $233,000. Our mortgage is $1,650 a month for a four-bedroom house in a neighborhood with good schools. We have a 529 plan for each kid, we max both our retirement accounts, and we take two vacations a year. Last summer we did a week in Hilton Head. We're not rich. We're comfortable. And "comfortable" in Charlotte costs a lot less than "comfortable" in Seattle.

You know you could make more in tech.

I know exactly what I could make. I check Levels.fyi like everybody else. A senior engineer at my experience level at a Big Tech company in Seattle would make $250,000 to $300,000 in total comp. That's roughly double my cash comp. But Seattle rent for a three-bedroom that would fit my family is $3,200 to $3,800 a month. My mortgage is $1,650. Washington has no state income tax, which helps, but North Carolina's isn't terrible either. I ran the numbers once. If I moved to Seattle and took a Big Tech job at $280,000 total comp, after adjusting for housing, the loss of my pension, the higher cost of groceries and childcare, and the fact that Monica would have to find a new job in a new state, our net financial position would be roughly equivalent. Maybe $15,000 to $20,000 better on paper. For a family disruption that I can't put a dollar amount on.

My friend Terrence worked at this bank for three years. He left for a startup in Raleigh two years ago. Made about $40,000 more for 14 months. Good for him. Then the startup did layoffs and Terrence was in the second round. He's back at a bank now, different one, making slightly less than he made before he left. The startup experience on his resume is worth something. The 14 months of higher pay minus the 3 months of unemployment roughly netted out. He said "at least I tried." I respect that. I also like my pension.

What's the ceiling here?

At this bank, the individual contributor ceiling is about $145,000 to $155,000 for a principal engineer. Above that, you go into management. A director of engineering here makes about $180,000 to $200,000 plus a bigger bonus. The VP of technology, my skip-level, probably makes $250,000 to $280,000. Those are good numbers for Charlotte. But compared to Big Tech, the ceiling is dramatically lower. A staff engineer at a Big Tech company makes more than the VP of technology at my bank. That's a real thing. I know it. I've made peace with it. Mostly.

What I haven't made peace with is the perception. When I go to tech meetups or conferences, and I say I work at a bank, there's this, I don't know, this slight downward adjustment in how people look at me. Like I'm not a real software engineer because I'm not at a real tech company. We process 2 million transactions a day. Our mobile app has 400,000 active users. I architected the API gateway that every mobile request goes through. But because there's a bank logo on the building instead of a tech logo, there's a status hierarchy that puts me below people who do less interesting work at companies with better branding. It's dumb. I know it's dumb. It still gets to me at conferences.

What's yours about money?

How much the comp gap affects your sense of professional identity, even when you've optimized for different things. I chose this life deliberately. I chose the pension, the 7-minute commute, the $1,650 mortgage, the backyard where my kids play. I am not suffering. But every time I open a Blind thread or a Levels.fyi post where someone my age is making $400,000, there's a voice that says "you left money on the table." And I know the counter-arguments. Cost of living. Quality of life. Time with my family. I've made those arguments to myself a hundred times and I believe them. But the number comparison is a thing that doesn't turn off. Monica doesn't understand it because in education, pay scales are transparent and everyone makes roughly the same. In tech, the spread between what I make and what someone with similar skills makes at a different company is $150,000 a year. Knowing that is a specific kind of weight that doesn't show up in job satisfaction surveys.