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Why Do Software Engineers Make So Much? (5 Reasons Why)

In today’s job market, it’s no secret that programmers are in high demand. But why do software engineers make so much money? Here are five reasons why software engineers are some of the highest-paid professionals in the world.

How Much Do Software Engineers Make?

Before we dive into the question of “why do software engineers make so much?”, let’s take a look at the actual numbers and find out exactly how much software engineers are making.

According to U.S. Bureau of Labors Statistics, software engineers make upwards of $109,020 annually. This is more than twice the amount that an average American earns in any given year.

Is that a good measure of how much do software engineers make though? Let’s dig a little deeper and look at the salaries offered by the largest tech firms in the US.


PositionTotal compensation
L3 (SWE II)$182,675
L4 (SWE III)$258,791
L5 (Senior SWE)$345,515
L6 (Staff SWE)$475,631
L7 (Senior Staff SWE)$708,420
L8 (Principal Engineer)$1,125,818
Google Total Compensation Sheet



PositionTotal compensation
Meta Total Compensation Sheet

As you can see, compensation provided by the tech giants is many time higher than the average salary of software engineers in the United States. In fact, senior engineers earn a salary that could easily make them millionaires.

Why Are Software Engineers Paid So Much?

Okay, so why do software engineers make so much? You could argue that their salaries can be compared to those earned by medical doctors and lawyers.

It turns out that high salaries earned by software engineers have very specific reasons and are very well deserved.

1. Software Engineers Are in Demand

Software engineering is one of the most valuable skillsets on the job market right now.

It’s no surprise; software engineering plays an increasingly important role in nearly every business and industry. From creating new systems to maintaining existing ones, software engineers are needed everywhere from banking to healthcare, from retail to government operations.

Companies are willing to pay top dollar for professionals who know how to build and maintain their applications. As the demand for software engineers increases, so does the salary they can charge for their services.

Understanding how software works and how it can be used to increase efficiency, save time, and provide better customer service can give companies a huge competitive advantage.

A U.S. labor statistics report showed an alarming shortage of talented software engineers, with only 400,000 graduates yearly against 1.4 million job openings in 2020.

The demand for experienced software engineers is projected to only grow over the coming years, making it an excellent career choice for anyone with an aptitude for programming languages.

2. Software Engineers Provide High Value

Big tech firms and smaller startups alike make big money from automating processes and encoding their processes. The fraction they pay for the software engineering talent is actually only a tiny part of what they are able to earn in revenue in return.

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Software engineers can be thought of as the people who build the engines that power successful companies. The value they bring to a business is immense and often vastly underestimated.

With the help of experienced software engineers, companies are able to reduce costs, increase efficiency and provide better customer service. All these benefits result in increased revenue for the company, making it easy to see why software engineering is such a high-paying job.

3. Not Everyone Can Do It

Software engineering is a highly specialized field that requires a lot of training and experience to master. It is not just about coding, but also understanding the underlying systems and algorithms behind software applications.

It takes years of study and practice for someone to become an experienced software engineer, making it a job that not everyone can do. Companies understand this and are willing to pay top dollar for professionals who know how to build and maintain their applications.

A Slack survey with over 80,000 responses revealed that 65% of working professionals in this field have a Bachelor’s degree. On average, it takes four years to earn a Bachelors degree. Alternatively, some engineers choose to go through a highly intensive coding bootcamp education to get the required skills faster.

Besides education, software engineers need to possess a high IQ, which is not very common among general population. The average IQ of a software engineer ranges from 115 to 132, while general population possess IQ in the ranges of between 85 and 115.

Software engineering requires creativity and is mentally draining, making a high salary for this job more than justified.

4. Specialists Need to Constantly Learn New Tech

Software engineering is a highly competitive field that requires professionals to continuously learn new technologies and maintain their skills up-to-date.

This is unlike many occupations, where you learn most of the required knowledge at once in college and use it throughout your career.

As such, companies are paying extra to the software engineers as they are expected to constantly continue learning new tech that is being released every year.

This obviously requires extra effort on the side of engineers, which demands a higher paygrade from their respective employers.

5. Tech Industry Is Rich

The tech industry is one of the most profitable industries in the world, and its success has created a demand for experienced software engineers.

Tech firms are among the highest revenue-generating companies, and so they are willing to and able to pay high salaries to the right people for their services in order to get an edge over their competitors.

For them, spending extra on employee salaries is easily justified by the many-times larger return on the investment, which is why software engineer salaries are so high in the tech industry.

In conclusion, software engineers make so much money because their work is highly valued, it requires a great deal of education and expertise to become proficient and the tech industry is highly competitive. By understanding why they are paid such high salaries, you can better appreciate why they are worth the investment.

Software engineers in a meeting discussing app development
Photo by Mapbox @ Unsplash

What Do Software Engineers Do Anyway?

A software engineer is a tech expert who specializes in programming, coding, and works to develop software solutions.

Software engineers analyze code, pinpoint weak areas of a program before it goes live, and continually work to improve existing solutions.

They also create software systems according to user needs and specifications, troubleshoot existing systems, and collaborate with other professionals to develop better solutions.

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In short, software engineers are responsible for designing, building, and maintaining software systems that solve real-world problems.

What Skills Make Software Engineers So Valuable?

Software engineers are a unique breed. They possess technical qualities that are not available to many other people, which makes them so valuable and worthy of an excellent salary. Particularly, software developers have the abilities to:

1. Diagnose problems

Software engineers are highly skilled at diagnosing problems with existing software systems. They can identify why a certain system isn’t working properly and come up with creative solutions to solve the issues.

2. Investigate and research new technologies

Software engineers have the ability to quickly learn and understand new technologies, allowing them to stay up-to-date with the latest innovations. This is why why do software engineers make so much money – they are able to take advantage of the latest trends and apply them to their work.

3. Create efficient solutions

Software engineers are able to identify areas of improvement in existing software systems, and create efficient solutions that make these systems better.

4. Experiment and intervene

Software engineers are not afraid to experiment with new ideas, and intervene when there is an issue with a system. They can develop temporary solutions to fix problems until a permanent solution can be implemented.

5. Optimize

Software engineers are also able to optimize designs, ensuring that the system runs smoothly and efficiently. This requires a great deal of skill and knowledge, which is why software engineers are so highly valued.

6. Estimate complexity

Software engineers are able to accurately estimate the complexity of a project, helping to ensure that it is completed on time and within budget. This helps to ensure that a project doesn’t get bogged down in unnecessary complexity.

In short, software engineers are invaluable to any tech company because of their specialized skills and knowledge. By understanding why software engineers make so much money, you can better appreciate why they are worth the investment.

By paying software engineers higher salaries, tech companies are able to gain a competitive advantage and access the best talent in the industry.

Software Engineer using Laptop
Photo by Christina Morillo @ Pexels

Why Are Software Engineers Paid More than Other Engineers?

Software engineers have become some of the most highly paid professions in the world, commanding significantly higher salaries than other engineers.

This is because software engineering requires a complex mix of technical and creative aptitude that makes it incredibly difficult to master. As such, software engineers typically possess both coding skills and ‘big-picture’ thinking, which allows them to devise and execute revolutionary ideas related to software development.

The demand for these kinds of professionals is also on the rise as businesses depend more and more on technology for their operations. This has lead to an increased salary cap for software engineering positions as companies compete for top talent.

Do Software Engineers Make More than Doctors?

While software engineers make a significant amount of money due to their valuable expertise, salaries of most developers still fall below the earnings of physicians.

According to Medscape Physician Compensation Report 2022, doctors make a whooping annual $339,000 on average, which is close to 3 times as much as software engineers earn on average.

However, experienced senior developers at large tech firms often have compensations on par or even exceeding those of some doctors.

Both medicine and computer science are clearly lucrative careers that have their own advantages and disadvantages. At the end of the day, it all comes down to what kind of profession you want to pursue and why.

Where Do Software Engineers Get Paid the Most?

Salaries of software engineers largely depend on location. Best countries for software engineers with highest-paying salaries and their respective compensation rates include:

  1. United States – $109,020 average annual salary
  2. Switzerland – $101,600 average annual salary
  3. Australia – $95,400 average annual salary
  4. Canada – $84,000 average annual salary
  5. Denmark – $83,600 average annual salary
  6. United Kingdom – $67,000 average annual salary
  7. Germany – $60,900 average annual salary
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Software engineers in the United States tend to make the most money, followed closely by those in Switzerland. Companies in these countries often pay higher salaries to attract the best and brightest software engineers.

With that said, it’s important to remember that factors such as experience and the size of the company can have a significant impact on a software engineer’s salary.

How much software engineers make in different countries
Photo by Louis Hansel @ Unsplash

What Are the Highest Paying Software Engineering Specialties?

Not all software engineering jobs pay the same. So which ones pay the most?

According to Indeed, the highest paying software engineering specialties are:

  1. Software Architect – $139,099 per year
  2. DevOps Engineer – $121,996 per year
  3. Data Scientist –  $121,897 per year
  4. Mobile Developer – $115,817 per year
  5. Network Security Engineer – $115,197 per year
  6. Software Engineer – $106,496 per year
  7. Java Developer – $103,461 per year
  8. Front-End Developer – $102,697 per year

As you can see, some of the highest paid software engineering specialties involve working with data (Data Scientist, DevOps Engineer) or developing mobile applications (Mobile Developer). Software Engineers who specialize in security (Network Security Engineer) also tend to be well-compensated.

Is Software Engineering a Good Career?

Software engineering is an excellent career choice for those who are passionate about programming and working with technology. There are a number of reasons why software engineering is a favorable profession to pursue.

1. Software engineering is a well-paid profession

According to the Bureau of Labor Statistics, the median annual salary for a software engineers is $109,020. And if you have experience or specialize in a particular areas that we mentioned above, you can earn even more.

2. SWE offers plenty of opportunities for advancement

With technology becoming more commonplace in society, the need for software engineers will continue to grow. Consequently, there will be many chances for those already working as engineers to progress in their careers. Furthermore, with additional experience comes increased pay.

3. SWE is an intellectually stimulating profession

People who like working with numbers and problem-solving would most likely enjoy a career in software engineering because they get to use their skills to develop solutions to complex problems daily. In addition, they can stay up-to-date on the latest trends by working with cutting-edge technologies.

4. SWE offers a good work-life balance

Among the advantages of being a software engineer is that good work-life balance opportunities abound in the profession. Software engineering, on the most part, is not particularly stressful and not a boring profession. Sure, some engineers may have to put in extra hours during busy periods, but many jobs offer flexible schedules that making taking time off possible when needed. Plus, plenty of engineers are able to take their work with them wherever they go by working remotely, adding even more freedom into already flexible schedules.

5. SWE is a stable profession

Although no occupation is entirely secure, a software engineering career is one of the most dependable options. This demand for qualified software engineers will always exist. Given that you remain current with your skills and adaptive to industry changes, employment in this field should be available to you for years down the road.


Overall, why do software engineers make so much? Because software engineering is an in-demand field and the demand for skilled professionals continues to increase. As such, more employers are willing to offer higher salaries for these positions.

Additionally, there are a number of other perks that come with being an software engineer such as great flexibility, career advancement opportunities and job security.

For those seeking a financially AND emotionally rewarding career should definitely consider becoming a Software Engineer! Good luck!