Can Engineers Make $500k in a Technical Role?

Can engineers make $500k? Absolutely, but it’s uncommon. Also, the $500k is a total compensation package and not a base salary.

I’m going to go over engineering positions that pay this illustrious $500,000 and beyond. The keyword is “engineer,” NOT business founders or managers.

To point out, engineers in this pay grade often lead other engineers. Also, they directly work with higher management. Their core work is still complex engineering though.

Also to reiterate, the $500,000 is almost never a base salary. It includes a mix of the following:

  • Restricted Stock Units (RSUs)
  • Healthcare, dental, and vision
  • Retirement (401k)
  • Bonuses
  • Overtime

Our stage is now set. I’m going to go over the following employment opportunities that offer these positions:

  • Government
  • FAANG / high tech
  • Consulting
  • Fintech

Important Note: my main focus is on employment in the state of California. That’s where I currently live and I’m most familiar with. 

Surprising to some, $500k in California doesn’t stretch as far as it would in other corners of the globe. The typical home costs $1.15 million in San Jose according to Zillow. This is a very small and run-down home too.  

Government engineering positions

can engineers make 500k

High paying government engineering positions are often for traditional engineering fields. This includes civil, structural, power, and so on.

These engineers maintain city infrastructures. Think of a water treatment plant or the maintenance of roads.

Below is a list of several total compensation packages of California state engineers. The data is from Transparent California.

To point out, these aren’t pure engineering positions. They have some managerial components too. It’s unavoidable in the state at such a high pay grade.

Also, the “other pay” column includes stipends, car allowances, bonus pay, and so on.

Job Title Base Salary Other PayTotal PayBenefitsTotal 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

Clearly, you can make boatloads of money as a state worker if you play your cards right. But it’s the exception, not the rule. Also, these high-paid engineers typically have 30 plus years of experience.

Does this make you interested in government jobs? Check out what government jobs are like for engineers.

High tech engineering positions

When you think of high-paying tech salaries, you first think of FAANG companies.

The acronym FAANG refers to the following technology companies:

  • Facebook
  • Apple
  • Amazon
  • Netflix
  • Google

These companies can and do pay their engineers A LOT of money. They have exceptionally high margins as internet-based companies. This makes them highly profitable.

So they can afford to throw extra money at rockstar engineers. All without putting a dent in their bank accounts.

The below table lists top compensation packages from FAANG companies. Levels.fyi verified the figures through reviewing W2s, offer letters, and personal identities.

Just keep in mind these salaries are outliers. They’re a subset of Silicon Valley companies.

In other words, these salaries go to 10X engineers. To make this level of moola, you need to be slightly more than brilliant.

To put it another way, these engineers turn impossibles into possibles. When you generate $10 million for your company, a company will bend over backwards to pay you $1 million-plus.

DateLocationPosition LevelTotal CompensationTotal Experience
FACEBOOK
July 2nd, 2019Menlo Park, CASecurity (E8)$1,800,00031 years
March 12th, 2021Menlo Park, CASoftware Engineer (E9)$2,990,00012 years
March 15th, 2021Menlo Park, CASoftware Engineer (E9)$3,900,00021 years
APPLE
March 25th, 2021Cupertino, CAStaff Engineer (ICT5)$628,00014 years
January 20th, 2020San Jose, CAiOS (ICT6)$776,00030 years
February 2nd, 2020Cupertino, CASoftware Engineer (ICT6)$828,00017 years
AMAZON
October 8th, 2020San Francisco, CADistributed Systems (L7)$747,00012 years
September 6th, 2020San Francisco, CADistributed Systems (L7)$761,00015 years
January 22nd, 2021Sunnyvale, CADistributed Systems (L7)$835,00012 years
NETFLIX
March 9th, 2021Los Gatos, CASenior Software Engineer$641,0009 years
March 21st, 2021Los Gatos, CASenior Software Engineer$693,00018 years
January 29th, 2021Los Angeles, CAWeb Development$715,0009 years
GOOGLE
March 2nd, 2021San Francisco, CADistributed Systems (L9)$1,000,00015 years
February 3rd, 2021Mountain View, CAML/AI (L8)$1,218,00014 years
February 27th, 2019Mountain View, CASecurity (L9)$1,750,00022 years

What’s more, employee wealth isn’t only shared through FAANG companies. Let’s take a look at some other companies that you may recognize. The total compensation packages are still monstrous.

Date LocationPosition levelTotal CompensationTotal Experience
UBER
March 11th, 2021San Francisco, CAStaff Software Engineer$613,00015 years
March 8th, 2021San Francisco, CAStaff Software Engineer$900,00010 years
March 16th, 2020San Francisco, CADistributed Systems$955,00012 years
LINKEDIN
February 15th, 2020Sunnyvale, CADistributed Systems$735,00020 years
March 2nd, 2021Sunnyvale, CADistributed Systems$780,00028 years
December 3rd, 2020Sunnyvale, CAPrincipal Staff Engineer$1,445,00022 years
LYFT
August 13th, 2020San Francisco, CADistributed Systems (L6)$540,00010 years
March 1st, 2021San Francisco, CAData (L6)$720,0008 years
January 2nd, 2021San Francisco, CAFull Stack (T6)$775,00010 years
DROPBOX
October 31st, 2019San Francisco, CAFull Stack (IC5) $580,00010 years
November 26th, 2018San Francisco, CAML/AI (IC5)$620,00010 years
February 17th, 2020San Francisco, CAML/AI (Staff SWE)$775,0009 years
TWITTER
February 9th, 2021San Francisco, CAML/AI (Staff SWE)$604,0009 years
March 12th, 2021San Francisco, CADistributed Systems (Staff SWE)$670,00010 years
March 23rd, 2021San Francisco, CAML/AI (Staff SWE)$700,0006 years

Important Note: the bulk of these compensation packages are RSUs. FAANG stocks historically have been valuable. 

But for companies like Facebook and Google, their stock can tank with a cooling ad market or strong privacy regulations. Thus, compensations can quickly shrink from $1,000,000 to $300k. 

Also, stock options vest over time in blocks. For example, let’s say you’re granted 1000 shares, and your options vest 25% per year over four years.

So, within the first year of the stock issuing date, you can buy 250 shares (25%). While noting, a four-year vesting schedule is very common. 

Tech outliers

Beyond typical FAANG software engineers, there are other crazy outliers.

In Silicon Valley, experts in Artificial Intelligence (AI) demand absurd salaries as well. These engineers can make an excess of $1 million.

It’s because the supply of these engineers with their level of expertise in AI is extremely low.

Plus, these engineers bring more to the table than just their skills. On hiring superstar engineers, 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 do anything to retain you. Because getting paid more isn’t for doing more. It’s for doing work that has greater impact.

Important Note: the compensation packages can grow exponentially for unicorn startups. Many engineers get in early with a company and hope for a successful IPO.

According to a Facebook engineer, he had the right to sell around 325,000 shares post-IPO. Figuring a $40 share price at the time, that’d yield $13 million. 

Consulting agency engineers in specialized niches

white cyborg finger about touch human finger

If you find yourself in a high in demand yet low supply consulting agency niche, you can rake in money.

The key is having a rare sought-after specialty skill. Your skill may be with a new sexy technology or just an advanced skill few engineers have.

Like in power engineering, many people can do low voltage commercial lighting design. But few power engineers can do high-voltage substation design from the ground up.

I’ve written an article on the construction staging for the retrofit of an existing high-voltage substation. Check it out, to get an idea for a deeply woven niche in power engineering.

Profits aren’t insanely high though. Because you don’t find many substation retrofit projects sitting around. Also, the supply of power engineers who do this work isn’t super low.

The brilliant Principal Engineer

In coastal California cities, I’ve seen the billing rates of some Principal Engineers. The highest billing rate being $655/hour!

A lot of the time, these engineers lead the way on mega and cutting-edge engineering projects. Projects you read about and see on TV.

This $655/hour Principal Engineer has a very specialized skill in renewable energy. He also has mountains of hands-on experience. Then throw in the small firm he worked for was wildly busy.

Now, based on a 40-hour workweek and 52 weeks in a year, a full-time employee will work 2,080 hours a year.

Doing simple math, this calculates to 2,080 hours x $655 = $1,362,400.

In consulting, an engineer typically pockets anywhere from 33% to 50% of their billing rate. So, this engineer would net the following from his firm $449,592 to $681,200.

If you’re a one-person show engineer though, you could pocket a much larger percentage of the $1,289,000. Starting your own consulting engineering firm is an option, but easier said than done.

Let’s have some fun though, and crunch some numbers for a one-person show engineer.

Say you’re a workaholic and your workload is swelling. So you work 80 hours per week like you’re possessed while kicking ass.

That’ll gross you $1,362,400 x 2 = $2,724,800!

Financial technology engineering positions

Financial technology, Fintech, is new technology and innovation in the finance sector.

Some fintech companies are banks, but not all banks are Fintechs. Mainly, fintech includes hedge funds, HFT firms, and prop shops. Overlaps do exist in the work these firms do though.

Now, these firms typically employ quants and algorithm trading focused software engineers.

Below are total compensation packages from Levels.fyi for Citadel.

DateLocation Position LevelTotal CompensationTotal Experience
CITADEL
March 30th, 2020New York, NYDistributed Systems$750,0007
December 20th, 2019Chicago, ILDistributed Systems$725,00011
December 18th, 2020New York, NYDistributed Systems$600,00014
January 3rd, 2021Chicago, ILDistributed Systems$510,00016

What’s more, I’ve heard about some highly skilled quants who pull in $1 million-plus. But unfortunately, I don’t have a data source to hang my hat on.

So let me piece together a case scenario myself.

Given market liquidity and leverage, a single trading tactic may have a cap of $500 million.

In our example, we’ll use Tiger Global’s exceptional return rate of 22.4% in a year. Thus, $500,000,000 x 0.224 = $112,000,000 profit for a single trading tactic.

Hedge funds will then take a percentage cut of the profits as their fee. Industry-standard is 20%.

So, $112,000,000 x 0.20 = $22,400,000. Also, there’s also a lot of overhead costs like data and infrastructure. But you can see how a superstar quant in this case scenario can easily make over $1 million.

“Can Engineers Make $500k?” wrap up

The financial success outlined in this article is only a small handful of the engineering workforce. These engineers have a combination of the following attributes:

  • Insane drive
  • Many years of valuable experience
  • A deeply specialized and sharpened skillset

BUT, also, they have the opportunity to work on important projects to flex their skills. So, there’s definitely a good sprinkle of luck involved too.

I compare all this to athletes in professional sports.

How many 6’8″ people exist who have a 40″ vertical with lightning-quick speed? Very very few. So these athletes like Lebron James demand tens of millions of dollars in salary.

So, engineers can certainly make $500,000 plus by strategizing and leveling up. Just don’t settle when you still have juice in the tank to level yourself up.

How many engineers do you know who make $500k annually? What do you consider a good engineering salary to be in your zip code?

SUBSCRIBE TO ENGINEER CALCS NEWSLETTER

Get daily articles and news delivered to your email inbox

Leave a Comment