If you’re dreaming of working in Silicon Valley, you might want to know how much you can earn to be able to sell yourself in an effective way and to negotiate salary during job interviews.
This article covers the compensation structure in Silicon Valley and includes numerous examples of salaries for various kinds of IT specialists depending on their role, skills, and level.
Average IT salaries in Silicon Valley
IT salaries can depend on role, experience, skills, level, a specific company, and other factors.
IT salaries by role
According to Angel.co, the average annual salary in Silicon Valley’s startups ranges from $59,000 for sales development representatives to $99,000 for engineering managers.
Apart from engineering managers, other roles with the highest salaries include software architects ($96,000), product managers ($96,000), and DevOps engineers ($95,000).
Silicon Valley startup base salaries by role
IT salaries by experience
Base salaries for software engineers in Silicon Valley are ranging between $95,190 (for entry-level workers) and $128,160 (for specialists with 10+ years of work experience), according to Indeed.
Salaries by years of experience in Silicon Valley
- Less than 1 year: $95,194
- 1 to 2 years: $97,803
- 6 to 9 years: $111,867
- More than 10 years: $128,161
According to Motion Recruitment, base salaries for senior-level specialists (5+ years) are 35% higher on average than salaries of mid-level specialists (2–5 years). Here are a few examples.
Silicon Valley base salaries by role and experience
Source: Motion Recruitment
- Back-end developer. Mid level: $118,440 – 169,920; senior level: $166,890 – 218,850
- Data specialist. Mid level: $117,300 – 172,300; senior level: $164,660 – 212,560
- Embedded software engineer. Mid level: $118,670 – 161,020; senior level: $167,020 – 225,570
- Front-end developer/designer. Mid level: $113,370 – 156,400; senior level: $162,340 – 205,960
- Infrastructure engineer. Mid level: $116,040 – 157,500; senior level: $164,400 – $210,310
- Mobile developer. Mid level: $118,720 – 175,890; senior level: $168,190 – 215,710
- QA engineer. Mid level: $109,360 – 147,950; senior level: $152,340 – 198,800
- Support engineer. Mid level: $102,310 – 132,035; senior level: $138,960 – $172,250
IT salaries by skills
Salaries also depend on technical skills. According to Angel.co, the highest salaries are offered to those who have skills in system integration ($115,000), Ruby ($112,000), Jira ($111,000), and Maven ($102,000).
Silicon Valley startup salaries by skills
However, according to Indeed, Scala is the best-paying skill for software engineers in Silicon Valley. Software engineers with this skill earn 24% more than the average base salary, which is $101,876 per year.
→ Top 35 programming languages and frameworks sought after by employers in the US
Salaries in cities of Silicon Valley
Salaries can also vary across different cities within Silicon Valley. According to Indeed, the highest-paying cities for software engineers are Redwood City ($171,713), Sunnyvale ($167,623), and Palo Alto ($164,081).
These cities are headquarters to many global technology companies including Apple, Box, Electronic Arts, Evernote, Facebook, Google, Informatica, Logitech, Oracle, PayPal, and more.
Highest-paying cities near Silicon Valley for software engineers
Companies offering the highest salaries
In addition, salaries can vary across different technology companies. According to Indeed, Twitter, Proofpoint, and Capital One are among the highest-paying companies in Silicon Valley for software engineers, with annual salaries close to $200,000.
Top companies for software engineers in Silicon Valley
1. Twitter: $210,218
2. Proofpoint: $197,891
3. Capital One: $197,389
4. New Relic: $193,705
5. Snap: $193,223
6. Dropbox: $189,582
7. Citi: $188,537
8. Walmart eCommerce: $188,348
9. Intuit: $188,088
10. Facebook: $187,626
→ Top 100 employers for IT workers in the U.S.
→ Top tech skills and IT hiring trends 2020
However, base salaries are often only a tip of an iceberg: apart from base salaries, compensation packages for IT specialists in Silicon Valley may also include cash bonuses, stock options, and other benefits.
According to Indeed, the average base salary for software engineers in Silicon Valley is $101,876. On top of that, employees get an average of $5,000 in annual cash bonuses as well as other benefits such as stock options, commuter assistance, and more.
In fact, IT workers can get anywhere from 40–50% to 200% on top of their base salaries, according to Levels.fyi. The higher the employee’s level is, the higher the bonuses.
For example, L3 (entry-level) workers at Google can earn $128,054 as their base salary plus $39,425 and $20,747 per year as stock options and bonuses, correspondingly — a total of $188,226. L-8 (higher level) workers, meanwhile, can get as much as $1.35M per year, of which 76% are stock units and bonuses.
Total compensations depending on employee’s level in tech majors
Each tech company uses its own system of levels. For example, at Google, entry-level engineers start at Level 3. And Microsoft’s system starts at 59 for a software development engineer and goes up to 80 for a Technical Fellow.
Read more about the level system at tech companies:
→ How much Apple, Facebook, Google, and other tech giants pay their workers
The total compensation normally includes 3 main components:
1. Base salary is the employee’s monthly payment that is usually fixed and is often quoted yearly. This amount is subject to annual indexation by 4–5% based on market growth. See examples of base salaries in the first part of this article.
2. Cash bonuses may be paid quarterly or yearly. They are often a percentage of salary (10–30%) and usually depend on personal performance in the period.
3. Long-term incentives are restricted stock units, stock options, or other similar payments that may only be convertible into cash at a future date.
Various benefits (such as health insurance, commuter assistance, etc.) make an additional component. The total compensation with benefits is known as the compensation package.
Let’s now focus on each of these components in more detail, starting with cash bonuses.
Cash bonuses can include performance bonuses and sign-up bonuses.
Performance bonuses are usually paid twice a year to employees who achieved some goals or showed exceptional results. The amount of performance bonuses depends on your position, company performance, and your performance assessed by your manager. On average, employees receive an additional 10–30% in bonuses each year.
According to Levels.fyi, bonuses at Google can vary between $20,747 and $122,500 depending on the level, or 16% to 40% of the base salary. At Facebook, bonuses are ranging between $15,638 and $238,250 per year, or 13% to 80% of the base salary. At Microsoft, bonuses can vary between $20,214 and $76,867, and make 18% to 34% of the base salary.
Note that bonuses are not always a stable thing, especially if you work at a startup company. Cash bonuses can even be nonexistent if the company doesn’t hit growth targets or — worse — your bonus can be tied to things you have no direct control over (e.g. the second round of investor financing falling through or slacker employees that you don’t supervise).
Sign-up bonuses are cash bonuses for those who recently joined the company. Companies often offer lower base salaries while attracting job seekers with higher sign-up bonuses as sign-up bonuses are paid immediately after the hired person starts working. Be careful, though: when you sign a contract of employment, you usually agree to return the sign-up bonus if you decide to leave the company within a period specified in the contract.
Tech corporations often offer their employees remuneration in the form of corporate equities or stock options/units. It increases the level of employees’ loyalty and motivates them to stay with the company longer and work better. Depending on the company, these incentives can be a lucrative part of the total pay package, and some tech workers even choose a lower base salary in exchange for more equity.
There are several kinds of stock options.
ESPP (Employee Stock Purchase Plan) is a company-run program in which employees can purchase company stock at a discounted price that can be as much as 15% in some cases. Employees contribute to the plan through payroll deductions (e.g. 10% of base salary) which build up between the offering date and the purchase date. At the purchase date, the company uses the employee’s accumulated funds to purchase stock in the company on behalf of the participating employees.
Let’s say your company’s ESPP has a 15% discount with a six-month lookback, the stock price is $10 per share on the offering date and $12 per share on the purchase date. With the lookback, your purchase price for stock worth $12 is only $8.50 ($10 minus 15% of $10). This would give you a gain of more than 40%.
RSU (Restricted Stock Units) is stock of a company that is not fully transferable until certain conditions have been met, e.g. after the employee achieves required performance milestones or remains with their employer for a particular length of time (vesting period).
For example, if you’re offered 200 RSUs and your vesting period for the first 100 RSUs is one year, you will be able to sell these 100 RSUs only after you have worked for the company for a year. And the remaining 100 shares will be issued to you according to the vesting schedule, e.g. 25 shares per quarter. As a result, you will receive all 200 shares only after working in the company for 2 years. If your base salary is $100,000, you can get about $30,000 annually in the form of shares.
RSA (Restricted Stock Award) is similar to RSU in many ways. They can also have restrictions in the form of vesting period and vesting schedule. Restricted stock awards come with voting rights immediately as the employee owns the stock the moment the award is granted. Also, RSAs cannot be redeemed for cash, as some RSUs can be.
RSAs are usually distributed almost for free by startups at the initial stage when they still don’t have much cash and it is easier for them to pay employees with shares.
PSU (Performance Share Units) and PSA (Performance Stock Award) are similar to RSU and RSA, correspondingly, only the number of shares can be changed according to the performance of the employee.
Equity in Silicon Valley
According to Levels.fyi, stock options at Google can vary between $39,425 and $907,500 depending on the level, or 31% to 185% of the base salary. At Facebook, stock options are ranging between $43,010 and $738,500 per year, or 36% to 148% of the base salary. At Microsoft, stock options can vary between $29,972 and $189,600, and make 27% to 84% of the base salary.
Benefits don’t make part of cash compensation. However, these are the employer’s indirect expenses related to employees. These expenses include health insurance, paid annual leave, paid sick leave, parental leave, retirement plans, commuter benefits, learning and development opportunities, daily snacks and drinks, and more.
- Health insurance. It can cost anywhere from $450/month for a single person with no particular health problems to $3,000/month for a family. If you’re a single person, your employer can cover the full health care insurance which would more likely include only basic services and would tie you to a specific clinic. If you have a spouse and children, your employer would cover only part of health insurance costs (up to 88%).
- Vacation pay. Many tech companies in Silicon Valley offer their employees unlimited paid time off (PTO). It means workers can go on vacation as often as they wish as long as it doesn’t impact their performance. If the company has no unlimited PTO policy, an employee can accumulate 160 hours or 20 vacation days per year. This translates to roughly $5,000 a year if the employee’s salary is $100,000. Some companies also offer unlimited sick days.
- Parental leave. Parental leave of a maximum of 13 weeks is offered to a new parent, either to mother or father.
- Retirement plans (401(k) company match). Most companies match 401(k) contributions. This is a U.S. private pension plan that allows employees to deposit a portion of their pre-tax salary into their personal savings accounts and distribute it among funds as they wish. Matching means that your employer contributes a certain amount (10% to 100% of the employee’s contribution) to your retirement savings plan based on the amount of your annual contribution.
- Commuter assistance. Some companies compensate for commuter expenses. For example, a monthly Caltrain pass allowing to travel within Silicon Valley costs $100–200 per month (depending on the transport zone). Some companies also offer free charging of electric transport or offer internal systems of free transportation.
- Learning and development opportunities. Many companies pay for training events and conferences for their employees. The average price the companies pay is $1,500 per event, which means that you can save up to $6,000 per year as the number of events is usually limited to four per year. Some companies purchase for their employees a Lynda, Pluralsight, or Code School subscription instead. This translates to about $150 a year per employee. Such tech giants as Google, Apple, or Facebook help their employees with obtaining an MBA, conduct regular consultations, and can compensate up to $10,000 a year for training.
- Snacks and drinks. Many companies provide daily hot meals. Some offer meals three times a week, others offer a daily meal. Food is either delivered from restaurants, or the company employs chefs, as it’s arranged in Google. For a year with 261 working days, you can save around $3,900, given that the average check for lunch is $15.
How much do you need to earn to live in Silicon Valley?
With a base salary of $100,000, the total compensation package often exceeds $200,000. The higher the level, the higher the base salary, as well as cash and stock bonuses. With a base salary of $100,000, you can receive $30,000 – 50,000 in bonuses, and your benefits package may cost your employer up to another $50,000. This must be enough to live a comfortable life in Silicon Valley.
According to ITShifting.com research, a single person needs to have a minimum income of around $60,000 per year to live in Silicon Valley, and a family with children needs at least $130,000 – 140,000 or $140,000 – 200,000 for better living.
Learn more about the cost of living in Silicon Valley:
→ Guide to cost of living in Silicon Valley: Part 1