There are many tech hubs in the United States (which this article will cover exclusively, sorry) but which ones are able to maintain low costs of living while also having high average salary for software developers? This post will address that question using a few calculations and data sourced from publicly available websites (see bottom of post for references).

Cities being evaluated:

San Jose (Bay Area), CA

Seattle, WA

Portland, OR

Austin, TX

New York City, NY

Raleigh, NC

Chicago, IL

Denver, CO

Las Vegas, NV

The first chart below represents all salary data-points collected and the second shows a computed average salary. This average salary will be used as the city’s average salary figure going forward.

Salary Data for Software Engineers & Developers Salaries by City

City Engineer (Glassdoor.com) Developer (Glassdoor.com) Engineer (Indeed.com) Developer (Indeed.com) National $90,374 $86,226 $102,000 $93,000 San Jose $108,387 $91,815 $145,000 $133,000 Seattle $92,451 $88,486 $111,000 $101,000 Portland $88,776 $75,542 $100,000 $92,000 Austin $76,552 $80,938 $97,000 $89,000 New York City $80,433 $94,206 $140,000 $128,000 Raleigh $76,387 $77,800 $99,000 $90,000 Chicago $74,426 $74,426 $123,000 $113,000 Denver $80,938 $77,379 $98,000 $90,000 Las Vegas $82,200 $68,284 $83,000 $76,000

Average Software Engineer & Developer Salaries by City

City Average Salary National $92,900 San Jose $119,551 New York City $110,660 Seattle $98,234 Chicago $96,213 Portland $89,080 Denver $86,579 Austin $85,873 Raleigh $85,797 Las Vegas $77,371

Average Salary

No real surprises here. As we can see from the charts, San Jose (aka the Bay Area and Silicon Valley) is the area with the highest average salary at $119,551 with New York City following closely behind. It is important to note that both of these cities have much higher than average COL (cost of living). We’ll see that start to become a factor later on.

Before we get too enthused by our fancy new salaries, we should first take a sobering look at what taxes are going to do to our paychecks in these cities. Some state’s taxes will be very different than others. For example: Nevada, Texas, and Washington do not have state income taxes.

Note: Taxes were calculated filing as “Single” and having 0 federal exemptions.

Before vs After Tax – Software Engineer/Developer Salary

City Before Tax Salary After Tax Salary San Jose $119,551 $74,548 New York City $110,660 $72,303 Seattle $98,234 $70,786 Chicago $96,213 $65,878 Austin $85,873 $62,617 Denver $86,579 $59,190 Raleigh $85,797 $58,064 Portland $89,080 $57,735 Las Vegas $77,371 $56,891

After Tax Salary

After taxes, San Jose barely secures the top spot with $74,548.11. It is important to remember that your own tax situation may be different from those calculated here and that may affect your personal outcome.

Moving on, we now need to accommodate for cost of living differences between cities. In order to normalize/adjust the salary averages, we need to choose a good base-line city to compare other cities to. I’ve chosen to use Las Vegas, NV for this. This is because Las Vegas’s COL is very close to the national average but also because I live there myself (which makes the resulting numbers easier for me to understand). Regardless, the salaries in the chart below could be adjusted to any city and still apply. All that matters here is that bigger numbers are better.

Salaries Adjusted to Las Vegas Cost of Living (After Taxes)COL Adjusted Salary (After Taxes)

City COL Adjusted Salary (After Taxes) Austin $70,179 Raleigh $65,984 Chicago $59,879 Seattle $59,203 Denver $58,417 Las Vegas $56,891 San Jose $52,582 Portland $48,945 New York City $45,184

COL Adjusted Salary (After Taxes)

Things just got interesting! In a come-from-behind victory, Austin, TX has the highest adjusted income at $70,179 followed closely by Raleigh, NC! It would seem that for those wanting to have a large COL-adjusted salary might want to look at places other than Silicon Valley after all.

But wait! There are other considerations to look at. If you are the type of person to spend a large percentage of their income, then you can safely stop reading here. Otherwise, there are some additional calculations to be done. We need to see what the numbers look like if we optimize for net “leftover” income instead of adjusted “total” income. For this calculation, let’s assume that we live in Las Vegas (our base-line city) on $35,000 per year. We can adjust that number based on cost of living and mark the leftover as “extra” discretionary income. Let’s see what that looks like. Hint: bigger red bars are better.

Note: “Adjusted Essential Spending” represents the $35,000 per year from Las Vegas, adjusted to each individual city’s COL. “Extra Discretionary” represents the money you would have left over unadjusted (this is what we care about). The two bars for each city add up to the average unadjusted salary (after taxes) that we saw earlier.

Adjusted Essential Spending vs “Extra” Discretionary Income

City Adjusted Essential Spending Extra Discretionary Austin $31,228 $31,388 Seattle $41,848 $28,939 Chicago $38,506 $27,372 Raleigh $30,799 $27,265 San Jose $49,622 $24,927 Denver $35,463 $23,727 Las Vegas $35,000 $21,891 Portland $41,285 $16,449 New York City $56,006 $16,297

Extra Discretionary

Wow. Looks like software developers in Austin, TX are putting away the most into their savings account with a final discretionary income total of $31,388! Seattle, WA is also close behind with a not-unimpressive $28,938. The biggest losers are Portland, OR and New York City, NY with $16,449 and $16,296 leftover discretionary income, respectively.

Hopefully this has been as informative for you as it has been eye-opening for me. Sorry if your favorite city was left out, I tried to evaluate large tech hubs but also threw in a few cities I was personally evaluating. If you have any questions/comments about the methods of calculations, please post them below.

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Notes about data in this blog post: Salary data from Glassdoor.com and Indeed.com is used in order to get a good approximation for the going-rate for software engineers and software developers. Both titles have been used (engineer AND developer) in order to account for differences salary ranges and to hopefully give a better overall approximation of what an average “software worker” might be earning in various cities. Cost of living calculations were completed using CNN.com’s COL calculator. Tax calculations were done using ADP’s paycheck tax calculator.