Why Do Software Engineers Make So Much?

The general difficulty of software engineers’ role in businesses across the board and the enormous demand for their skillset make them incredibly valuable in today’s world. Almost every practice needs a qualified software engineer to streamline operations and stay relevant in a fast-paced digital environment. That’s why these software developers and engineers earn relatively more than other professionals. Their salary expectations have been significantly increasing in the last decade. Software engineers who live near tech hubs where the cost of living is exorbitant even earn higher.

Why Are Software Engineer Salaries In The US So High?

In general, there are not enough developers available to meet the huge demand for software developers, so those who are good are paid an extremely high salary. Software engineers are paid a premium because the industry is constantly changing, and it requires enormous effort to keep up with it. In 2000, the average software developer or engineer’s earnings of about $49,000 were slightly higher than the national average of around $42,148. However, the tech boom of the last 20 years has meant that salaries have increased dramatically.

According to a recent Indeed (the job-search site) study, software engineers now earn $114,576 annually with a $4000 annual cash bonus. That is equivalent to about a 131% increase on the 2000 figure. There has been an enormous difference between software engineers’ salaries and those of the general public. Average Americans now get about $56,310 per year, an increase of 34%. Software engineers are earning much more than most Americans and are, therefore, able to retire earlier than most Americans. If these statistics provide no reason for why software developers are so incredibly rich, let’s take a deeper look at the reasons for their incredible salaries.

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The Large US Market

US workers are constantly putting their efforts in the tech industry to become the most valuable in the world. Technology was expected to be worth about $5 trillion by 2020. The US makes up 32% of the technology industry, which is worth around $1 trillion. Europe is the closest competitor to the US industry, with 20% of the market, while China only has about 14%, even though it has experienced rapid growth. 

The US having the largest technology market in the world is not surprising because the country is always eager to innovate. Tech employees of tech teams are valuable in the country’s economy, which is why they are paid well. As the tech industry continues to grow, tech worker salaries will increase too.


Learning how to code is not very hard, but becoming a skilled developer involves much more than just writing code. Good software engineers understand complex problems and solve them efficiently. They know how to easily identify ways to improve existing systems, processes, and codes. Moreover, they can easily collaborate and work well with other departments within your company by employing automation. 

However, that may require working long hours to ensure they beat deadlines and avoid costly downtimes. Even though the career may sound so fantastic to budding software engineers, the complexity of solving problems all day can be so demanding and difficult. Since the journey of becoming an experienced software engineer is grueling, those who succeed in making it in this industry make so much money.

Supply and demand

Software engineers are extremely expensive because companies desperately try to find competent developers to help them automate their processes. Unfortunately, there is not enough supply to meet the demand. Even though many people decide to go to college to study computer science, the demand for such people is still far outstripping the supply. Therefore, these software engineers have the wiggle room to negotiate decent wages with companies, especially in big cities. 

If companies or potential employers aren’t willing to pay a decent enough salary, finding a job in another company is easy. Demand for software engineers is only set to grow as more companies try to become more differentiated online. In other words, people are always trying to automate repetitive work processes, so those (developers) who can do this efficiently are always in high demand.

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Changing technology

Most trades or careers provide you with certain skills you will use daily for the rest of your life. But software development requires a completely different set of skills that keep evolving. But software development is very different. You constantly learn new things to achieve your goals. Learning how to code in different programming languages is just the beginning of a long journey. You never stop learning anything!

To stay relevant, software engineers constantly need to improve their skills and learn new technologies. A talent for being highly adaptable and willing to continue learning is a big reason programmers and software engineers make so much money. While developers take many career paths, you must continue to learn and grow professionally and achieve your goals. However, when technology changes, it is like programming is being taken to a new level. That is why some people believe there is a time limit to being a software engineer.

Business needs 

IT departments are fast becoming the most important team in many companies. They often streamline operations and prevent expensive issues from happening. Businesses know that if things go down or don’t work properly, it can cost a company a small fortune. Facebook lost $60 million due to a hardware failure that caused a downtime that lasted for around 6 hours. That’s a lot of money if you consider that they will generate around $85.97 billion from their business. 

Software engineers make a lot of money because they try to prevent things like that from happening. They try to allow services to work as expected. Many people hear about things happening through social media before they even read the news. These outages can damage a company’s brand, so they should be avoided at all costs. So paying software engineers handsomely is one way companies can get them to work more efficiently.


You don’t need several software engineers to provide unmatchable value to your company. When Facebook bought Instagram for $1 billion, they only had 13 developers working for the company.

You don’t need a big team of developers to provide an insane amount of value to a business. When Facebook acquired Instagram for $1 billion, they only had a team of 13 tech experts at the company. The output-to-value ratio for software engineers is incredible. 

What software engineers do is worth thousands of dollars. It is hard to understand why, but software engineers are incredibly valuable. Developers can create hugely profitable apps and platforms when they start small, and when they scale up quickly, their contributions to a company are as valuable as the product that they build.

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Are Software Engineers The Highest Paid?

Today, almost every business, regardless of its model, needs the services of a software engineer. Zippia reports that over 329 500 software engineers are working in different fields across the US, and 10 percent of the highest-paid tech workers earn around $114 000 or more. Glassdoor estimates the median salary of these professionals to be around $100,000. 

The estimates also show that this is the second-highest-paying entry-level position for freelancers. That is way high compared to the entry-level remunerations that other professionals earn across the United States. This class of tech workers is the jack-of-all-trades who use their coding knowledge to create software solutions and applications that most brands rely on to execute their daily operations seamlessly.

Salary Range For Various Categories Of Software Engineers

Software developers and engineers are often positioned together because they depend heavily on one another to function properly. Some companies call both software engineers, while others call them software developers. We break down the salary ranges for various categories of software engineers to help you make an informed decision.

Full-Stack Engineer

A full-stack engineer is someone who knows all the skills and functions necessary to develop, test, and maintain web applications. These professionals are skilled at developing fully functional web applications, from designing the UI to developing the complex algorithms that power them. Full-stack engineer earns an average of $100,504 per year.

Video Game Designer

Video game developer. The position varies by company, but most are paid based on the ability to design and program games that engage and challenge users to do what they want to do. Designers use creative skills like storytelling and world-building to create environments that allow games to occur. 

Game designers create all the things that influence how people experience a game, from the environment to the characters to the props, from the way the game plays to the environment to the way characters move and talk, and from the way the music plays to the characters who interact with users. The pay for a video game designer is about $90,000 per year, depending on experience.

Quality Assurance Engineer

QA engineers test, review, and implement software to validate the quality of an application. They create automated tools and methods to catch errors and work out the best solution for those errors. They create automated tests and tools to ensure systems work as expected and fix errors. They also look at how software is implemented to understand how it works. These engineers earn about $67,361 on average per year.

CRM Project Manager

Project managers and developers create programs that gather user and consumer data and then analyze the gathered data in order to determine what needs to be done for businesses to meet those specific needs. They are expected to help businesses improve customer satisfaction or increase sales by optimizing customer support and sales representatives’ tools to do their jobs. They earn about $85,500 on average per year.

Security Engineer

Security engineers are generally considered to be a white hat or ethical hackers. They work to develop systems and procedures that verify the security of a given application or software. Their primary objective is to exploit potential security flaws and discover vulnerabilities in a software package to fix them and make the system more secure. If they succeed, the system will be able to provide an optimal user experience. They earn about $75,500 on average per year.

Software Integration Engineer

Software integration engineers are responsible for creating coding languages that allow them to program devices that are smart or that communicate via the internet. They earn about $108,300 on average per year.

3D Graphics Developer

3D Graphics developers (GRD) use their knowledge to create software that allows for realistic visual effects, like ray tracing, edging, and recording images. They work closely with game developers to develop gaming and video production graphics assets. Their skills are extremely useful when developing interfaces for other applications and websites. They can create interactive and attractive user interfaces. They earn about $100,000 on average per year.

Data Scientists 

Data scientists or engineers create software solutions that analyze information using deep learning, machine learning, and statistical techniques. Data scientists work on programs that analyze statistical data, data visualization, and predictive modeling, which help organizations determine how their products will grow to meet the needs of their customers. They earn about $102,140 on average per year.

Mobile Developers

Developers write applications that can run on smartphones and other handheld devices. They’re supposed to have Java, Swift, Objective-C, iOS, and Android development skills. They earn about $93,900on average per year.

Final Thoughts

Software engineers earn good salaries because they offer exceptional value to businesses, are in high demand, and their job requirements are tough. The ever-changing technological trends have led to an increasing need for software engineers, and there isn’t enough supply of these professionals on the market to fill all these gaps. Moreover, as technology seems to advance even more into the future, the adaptability of these trends will also keep evolving. A new generation of software engineers who better understand the newer technological inventions has to be trained and highly compensated.

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