According to Stackoverflow’s survey, salary is the one thing most developers say they care about when evaluating a new job opportunity. For 62.7% of developers, salary is one of their priorities. Salaries vary by experience, industry, and… location. Very much by location actually.

In the US, average salaries for developers with a minimum 5+ years experience are found in between $79,000 to $150,000 a year. In the UK, between $53,000 to $96,000.

But does that difference mean that being a developer in the UK is by nature less paid than being a developer in the US?

Actually, the difference in salaries needs to be assessed by the purchasing power those salaries will grant you in that country.

Take the price of the Big Mac as a good way to compare the purchasing power for people living in different countries. Here below, we put the average salary and the median salary for each country, and compare it to the price for a local BigMac, and take it further by comparing how many Big Macs you could buy with that annual salary. 

        Country                      Salary

(average)

Salary

(median)

Local Big Mac Price Big Macs per Year (avg)
South Africa $45,383 $35,000 $1.77 25,713
United States $106,120 $105,000 $4.93 21,530
Australia $80,093 $75,000 $3.74 21,426
Ireland $76,747 $75,000 $4.25 18,058
United Kingdom $75,654 $65,000 $4.22 17,925

*Number of Big Mac per years in decreasing order. Based on The Economist’s Jan 2016 Big Mac Index.

This does not provide an exact idea of the Pucharsing Power for other goods – but as the Econonmist (which created this Big Mac Index) suggests:

“Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible”

This means that we can try to quantify the purchasing power of someone on average with that salary, and this is very telling of truth we just know by intuition:

The average salary in South Africa might be the lowest… but South Africa tops the list of the greatest purchasing power for developers because average goods and services are cheaper.

And this comes at no surprise: you rarely move from a country to another just for a higher salary – non quantifiable elements like air pollution, prices of renting or the existence of a thriving technology industry with events play a strong role in that decision.

A study by Teleport offers a real good insight on which cities tops software developers’ preferences:

  1. Toronto
  2. Berlin
  3. London
  4. New York City
  5. Melbourne

San Francisco is definitely out of this list – surprisingly – as astronomical rents have for long kept a lot of people away from desiring to move to the technology capital of the world.

But yet, SF is not the most expensive: the average developer in Moscow would have to spend more than 50% of their income on rent if they lived in the city centre.

You’d be better off living in Montréal, Berlin, and Bangalore as a software developer where you will have to spend only 13% to 16% of your salary on rent.

Cities like Bucharest, Kiev and Portland have yet to prove that they are worth it: rents on average represent 18% of a person’s income which is not that high. However, let’s keep in mind that the average salary for a developer in Bucharest and Kiev is around $25,000, and in Portland it jumps to $95,000.

So in short, salaries vary across locations a lot but a lot of contextual information comes into play to judge if high salaries are really worth it.

While the tech talent around this world is lucky enough to enjoy having the upper hand on the market and able to be choosing from where to work more than any type of employee nowadays, most of it is still not flocking to San Francisco. For one good reason: salaries are said to be the top priority but actually the salary won’t be decisive in the final choice.

Sources:

Stack Overflow – Developer Survey 2016

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