Can engineers make $500k? You bet, but it’s pretty rare. Also, that $500k is a total compensation package, not just a base salary.
The $500,000 is a mix of like:
- Restricted Stock Units (RSUs)
- Healthcare, dental, and vision
- Retirement (401k)
- Bonuses
- Overtime
I’m going to dive into 4 engineering gigs that offer this sweet pay. Just remember, we’re talking about engineer roles, not founders or managers.
- Government
- FAANG / high tech
- Consulting
- Fintech
Important Note: I’m focusing on California since that’s where I live.
Keep in mind, though, $500k in California doesn’t go as far as you’d think. With the high cost of living, a typical home in San Jose sets you back $1.27 million, according to Zillow.
#1 Government engineering positions
High-paying government engineering jobs are usually in traditional fields like civil, structural, mechanical, and power engineering.
These engineers keep our cities running smoothly, working on things like water treatment plants or road maintenance.
Check out the table below for total compensation packages of California state engineers, taken from Transparent California. The “other pay” column includes stuff like stipends, car allowances, bonus pay, etc.
Worth noting, these aren’t purely technical engineering roles. They’ve got some managerial aspects too, which you can’t escape at this pay level in the state.
| Job Title | Base Salary | Other Pay | Total Pay | Benefits | Total Pay & Benefits |
|---|---|---|---|---|---|
| Senior Transportation Engineer | $432,833.51 | $32,913.75 | $465,747.26 | $129,533.04 | $595,280.30 |
| Managing Water Utility Engineer | $295,425.60 | $39,584.27 | $335,009.87 | $159,458.62 | $494,468.49 |
| Departmental Engineer | $186,594.00 | $235,007.77 | $421,601.77 | $69,071.08 | $490,672.85 |
| Managing Water Utility Engineer | $295,425.60 | $39,432.74 | $334,858.34 | $155,623.62 | $490,481.96 |
As you can see, you can score big as a state worker if you play your cards right. But remember, it’s the exception, not the rule. Plus, these big earners usually have 30+ years of experience.
Feeling the government job vibe? If so, explore what government jobs for engineers are like.
#2 High-tech engineering positions
When you think big bucks in tech, FAANG companies come to mind. That’s the powerhouse group of:
- Apple
- Amazon
- Netflix
These insanely profitable companies shower their engineers with cash. With sky-high margins, they’ve got money to burn.
The table below shows the top compensation packages from FAANG companies, verified by Levels.fyi, who checked W2s, offer letters, and personal identities.
Remember, though, most of these eye-popping salaries are reserved for 10x engineers – those rare individuals who bring in a whopping $10 million annually for their company. No wonder they’re paid over a million bucks!
| Date | Location | Position Level | Total Compensation | Total Experience |
|---|---|---|---|---|
| July 2nd, 2019 | Menlo Park, CA | Security (E8) | $1,800,000 | 31 years |
| March 12th, 2021 | Menlo Park, CA | Software Engineer (E9) | $2,990,000 | 12 years |
| March 15th, 2021 | Menlo Park, CA | Software Engineer (E9) | $3,900,000 | 21 years |
| APPLE | ||||
| March 25th, 2021 | Cupertino, CA | Staff Engineer (ICT5) | $628,000 | 14 years |
| January 20th, 2020 | San Jose, CA | iOS (ICT6) | $776,000 | 30 years |
| February 2nd, 2020 | Cupertino, CA | Software Engineer (ICT6) | $828,000 | 17 years |
| AMAZON | ||||
| October 8th, 2020 | San Francisco, CA | Distributed Systems (L7) | $747,000 | 12 years |
| September 6th, 2020 | San Francisco, CA | Distributed Systems (L7) | $761,000 | 15 years |
| January 22nd, 2021 | Sunnyvale, CA | Distributed Systems (L7) | $835,000 | 12 years |
| NETFLIX | ||||
| March 9th, 2021 | Los Gatos, CA | Senior Software Engineer | $641,000 | 9 years |
| March 21st, 2021 | Los Gatos, CA | Senior Software Engineer | $693,000 | 18 years |
| January 29th, 2021 | Los Angeles, CA | Web Development | $715,000 | 9 years |
| March 2nd, 2021 | San Francisco, CA | Distributed Systems (L9) | $1,000,000 | 15 years |
| February 3rd, 2021 | Mountain View, CA | ML/AI (L8) | $1,218,000 | 14 years |
| February 27th, 2019 | Mountain View, CA | Security (L9) | $1,750,000 | 22 years |
But wait, there’s more! These payouts aren’t just for FAANG folks. The next table shows compensation packages from other internet companies:
| Date | Location | Position level | Total Compensation | Total Experience |
|---|---|---|---|---|
| UBER | ||||
| March 11th, 2021 | San Francisco, CA | Staff Software Engineer | $613,000 | 15 years |
| March 8th, 2021 | San Francisco, CA | Staff Software Engineer | $900,000 | 10 years |
| March 16th, 2020 | San Francisco, CA | Distributed Systems | $955,000 | 12 years |
| February 15th, 2020 | Sunnyvale, CA | Distributed Systems | $735,000 | 20 years |
| March 2nd, 2021 | Sunnyvale, CA | Distributed Systems | $780,000 | 28 years |
| December 3rd, 2020 | Sunnyvale, CA | Principal Staff Engineer | $1,445,000 | 22 years |
| LYFT | ||||
| August 13th, 2020 | San Francisco, CA | Distributed Systems (L6) | $540,000 | 10 years |
| March 1st, 2021 | San Francisco, CA | Data (L6) | $720,000 | 8 years |
| January 2nd, 2021 | San Francisco, CA | Full Stack (T6) | $775,000 | 10 years |
| DROPBOX | ||||
| October 31st, 2019 | San Francisco, CA | Full Stack (IC5) | $580,000 | 10 years |
| November 26th, 2018 | San Francisco, CA | ML/AI (IC5) | $620,000 | 10 years |
| February 17th, 2020 | San Francisco, CA | ML/AI (Staff SWE) | $775,000 | 9 years |
| February 9th, 2021 | San Francisco, CA | ML/AI (Staff SWE) | $604,000 | 9 years |
| March 12th, 2021 | San Francisco, CA | Distributed Systems (Staff SWE) | $670,000 | 10 years |
| March 23rd, 2021 | San Francisco, CA | ML/AI (Staff SWE) | $700,000 | 6 years |
Important Note: Most of these packages are heavy on RSUs. FAANG stocks have been valuable in the past, but remember, companies like Facebook and Google can take a hit with a slow ad market or strict privacy regulations. So, that $1,000,000 might shrink to $300k in a flash.
Also, don’t forget that stock options vest over time in chunks. Say you’re granted 1000 shares, and your options vest 25% per year over four years. In the first year, you can buy 250 shares (25%).
Techie outliers
Aside from your typical FAANG software engineers, there are other wild outliers. In Silicon Valley, AI experts can command mind-boggling salaries too – sometimes over $1 million!
There just aren’t many engineers with this level of AI expertise. Plus, these engineers bring a lot more to the table than just their unworldly skills. As Mr. Nicholson from the startup Skymind said,
“When you hire a star, you are not just hiring a star. You are hiring everyone they attract. And you are paying for all the publicity they will attract.”
When you’re this good and influential, companies will bend over backwards to keep you. After all, getting paid more isn’t about doing more – it’s about making a bigger impact.
Important Note: Compensation packages can skyrocket for engineers at unicorn startups. Many engineers jump in early with a company, hoping for a successful IPO.
One Facebook engineer claimed they had the right to sell around 325,000 shares post-IPO. Considering a $40 share price at the time, that’s a cool $13 million.
#3 Consulting agency engineers in specialized niches
If you’ve got a highly sought-after skill in a niche with low supply, you can make some serious bank.
It’s all about having a unique skill in a hot technology or something so advanced that few engineers possess it.
Take power engineering, for example. Many people can handle low-voltage commercial lighting design, but not many can do high-voltage substation design from scratch.
I’ve written an article on the construction staging I designed for retrofitting an existing high-voltage substation. Give it a read to get a sense of what a niche within power engineering looks like.
The brilliant Principal Engineer
In some coastal California cities, I’ve stumbled upon the jaw-dropping billing rates of Principal Engineers, with the highest being a whopping $655/hour! These engineering maestros spearhead groundbreaking, attention-grabbing projects – the ones that make headlines and TV appearances.
The $655/hour Principal Engineer I met is a renewable energy expert with a treasure trove of hands-on experience. He’s part of a small firm that’s always inundated with business.
Time for some number crunching! Based on a 40-hour workweek and 52 weeks a year, a full-time employee works 2,080 hours. So, that’s 2,080 hours x $655 = $1,362,400.
In consulting, engineers usually take home anywhere from 33% to 50% of their billing rate. That means this engineer’s annual earnings from his firm would be between $449,592 and $681,200!
If you run your own one-person consulting engineering firm, you could pocket an even bigger chunk of that sum. Let’s have some fun with numbers, shall we? Pretend you’re a workaholic with an overflowing workload, clocking in 80 hours per week while crushing it. Your gross earnings would be $1,362,400 x 2 = $2,724,800!
#4 Financial technology engineering positions
Financial technology (FinTech) is the innovative fusion of technology and the finance sector. While some FinTech companies are banks, not all banks are FinTechs. Mainly, FinTech includes hedge funds, HFT firms, and prop shops, although overlaps do exist.
These firms typically hire quants and algorithm-focused software engineers. Below are the total compensation packages from Levels.fyi for Citadel:
| Date | Location | Position Level | Total Compensation | Total Experience |
|---|---|---|---|---|
| CITADEL | ||||
| March 30th, 2020 | New York, NY | Distributed Systems | $750,000 | 7 |
| December 20th, 2019 | Chicago, IL | Distributed Systems | $725,000 | 11 |
| December 18th, 2020 | New York, NY | Distributed Systems | $600,000 | 14 |
| January 3rd, 2021 | Chicago, IL | Distributed Systems | $510,000 | 16 |
I’ve heard of highly skilled quants raking in over $1 million, but unfortunately, I don’t have a solid data source to back that up. So, allow me to paint you a picture with a hypothetical scenario.
Assuming market liquidity and leverage, a single trading tactic might have a cap of $500 million. We’ll use Tiger Global’s impressive return rate of 22.4% in a year for our example. That means $500,000,000 x 0.224 = $112,000,000 profit for a single trading tactic.
Hedge funds typically take a 20% cut of the profits as their fee. So, $112,000,000 x 0.20 = $22,400,000. Sure, there are plenty of overhead costs like data and infrastructure, but it’s easy to see how a superstar quant in this scenario could make over $1 million annually.
“Can Engineers Make $500k?” wrap up
The financial success showcased in this article represents only a select few within the engineering world. These high-earning engineers possess a unique blend of attributes, including:
- Unstoppable determination
- Years of priceless experience
- Highly specialized and honed skillsets
- An innovative and creative mindset
Moreover, they seize opportunities to work on crucial projects that allow them to truly showcase their talents. And, let’s not forget that a dash of good fortune plays its part as well. I like to draw parallels between these engineers and professional athletes.
Think about it – how many people stand 6’8″ tall, have a 40″ vertical leap, and boast lightning-fast speed? Not many. That’s why superstars like LeBron James command jaw-dropping salaries in the millions.
But fear not! Even if you don’t possess a natural-born genius, you can still climb the ranks and boost your earnings. To help you do that, check out my following articles designed to help you level up:
- 12 engineering writing tips you need to know
- Engineering writing style guide – 6 things to know
- 12 ways to improve public speaking skills for engineers
- 10 ways on how to improve as an engineer
- 10 Easy tips on how to work like a machine
- 7 Steps on how to be a creative engineer
How many engineers do you know earning a whopping $500k a year? What do you think is a solid engineering salary in your neck of the woods?
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Author Bio: Koosha started Engineer Calcs in 2019 to help people better understand the engineering and construction industry, and to discuss various science and engineering-related topics to make people think. He has been working in the engineering and tech industry in California for well over 15 years now and is a licensed professional electrical engineer, and also has various entrepreneurial pursuits.
Koosha has an extensive background in the design and specification of electrical systems with areas of expertise including power generation, transmission, distribution, instrumentation and controls, and water distribution and pumping as well as alternative energy (wind, solar, geothermal, and storage).
Koosha is most interested in engineering innovations, the cosmos, sports, fitness, and our history and future.