How much do software engineers earn? It depends on the state, and these places are the most lucrative

But software engineers remain instrumental to the tech sector, and despite the hiccup in compensation, aren’t going away, as they play an important role in the tech ecosystem. Software engineers’ “responsibilities include code development, testing, architecture, systems design and more standardized processes,” says Inbal Shani the Chief Product Officer at Twilio Communications. 

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And tech companies employ armies of them, experts say.

“Generally, large tech companies will have thousands of software engineers,” says Zuahyeer Musa, co-founder of Levels.fyi. Software engineers, in the tech space, are “almost seen like an investment,” he says. “For large tech companies working on a large swath of products, engineering is an investment they make in building out those products.”

How much do software engineers make? 

The average software engineer in the U.S. commands a healthy salary, too. “The median compensation for a software engineer in the U.S., for base salary, is $155,000, according to our data on Levels.fyi,” says Musa. Furthermore, other internal data, sourced from ZipRecruiter and provided to Fortune, shows that the average base salary for software engineers is roughly $116,800. 

But there are other things to take into consideration beyond base salaries for software engineers—who are often compensated in a variety of ways, including stock options and bonuses. “The most important thing is total compensation package, not just base salary,” says Musa. 

Additionally, salaries and compensation for software engineers can vary based on where you live. States where tech companies may be clustered (e.g., California, Washington, and Massachusetts) may have tighter labor pools, where workers have a bit more leverage. Conversely, states with weaker labor markets (including many states in the South and Midwest) may see the typical software engineer earn less.

Senior software engineer salary

In the software engineering field, it’s also important to note that you can “level” up, and earn much more than your base salary indicates. 

“In the industry, there’s a concept of leveling—it’s a median value across the whole industry that gives you a sense of what the compensation looks like overall,” says Musa, who named his company, Levels.fyi, after the concept. In effect, a higher “level” means you’re a more senior engineer, and generally earn more money.

“Leveling allows you to look at what each group or level pays,” he says. “The pay drastically goes up as you go up in level. At the highest levels, you’re seeing more than 50% of your total compensation in stocks and bonuses—it’s always important to think of that,” he says, when considering your options on the market. 

Cost of living

If you’re thinking about a career in software engineering, and want to get the most bang for your buck in terms of purchasing power (pairing a high salary with low costs), you’ll also want to consider the cost of living in a given state when or if you accept a position. A high-paying job in Massachusetts will also come with higher living costs, while a high salary in Mississippi will likely coincide with lower living costs.

There’s a lot to consider when thinking about salaries and costs, but the overall cost of living from state to state is, broadly, important.

Software engineer salaries by state

The table below includes a ranking of the states where software engineers command the highest salaries on average. As noted, the salary data was provided by ZipRecruiter, and it is reflective of the labor market between January 1, 2024, and late May 2024. Additionally, the cost of living (COL) index for each state, as seen below, is calculated by the Missouri Economic Research and Information Center (MERIC), which averages indexes from metro areas and cities, and incorporates costs for groceries, housing, utilities, and transportation.

Here are the states where software engineers make the most, in descending order:

The takeaway 

Software engineers play an important role in the tech space, and large companies may have thousands of them on staff. They’re distinct from other positions in some ways—like developers—but are likewise versatile. Going forward, experts think that versatility will become even more important and prominent, too.

Both developers and software engineers “will spend more time from the get-go understanding and making decisions based upon the full-system, whether that’s the environment or the product they’re building,” says Shani, explaining that tech workers will see their overall roles broaden in scope to tackle large-scale problems.

Again: Compensation will differ from state to state, and company to company. As Musa notes, it’s important to think beyond mere salaries, and also consider stock considerations and bonuses, too, to make sure you’re getting as much as possible when shopping around your skills to employers.