Tripolar Nature of Software Engineering Salaries in the Netherlands and Europe
blog.pragmaticengineer.com
blog.pragmaticengineer.com
After a couple of years, I left to go there too, with a ~60% raise(!). I learnt from my manager, who left a month after me to the same fintech, that HR only benchmarked against "comparable companies in the same area", meaning west London suburbs, and ignored the pull of Central London finance, despite literally dozens of people leaving to go there. You gotta be realistic against who you're competing against, and thanks to how mobile tech professionals are, European companies are competing against not just their area or city, but often against Silicon Valley.
Came to London with my existing (traditional) engineering company.
After about 9 months (During COVID) got a series of offers from VC financed startups around London for a 90-100% raise,
so after that happening for about 2 months I interviewed at a few places, got offered a role and then buggered off to somewhere willing to pay me properly.
Exit interview with the old company
Them: "What can we do to keep staff",
Me: "Pay people closer to the market rates outside comparable companies...",
Them: "Oh we can't afford to do that".
To their credit, not long after I left basically the whole engineering department got a 30%+ raise, it's just a pity they didn't address the issue sooner.
If Europeans want to get better salary there's one option. Vote with their feet and simply work in SV.
If you don't already have family in the US, getting in is a real arse.
You'll sleep weird hours, but such is life on the global internet.
I know our company is looking for people "globally" now and what it really means is that it has to be within reasonable time differences to existing offices. But if you're off by a few too many hours but willing to work the time zones closer to the offices, then we are OK with that.
It does make sense to me as long as it's not too far off. It has to be livable. What that means I guess depends on your life situation and whether you are a night owl or an early bird for example and what covid opening hours are in stores etc.
However, if the money can increase here, and we can stay here, then yes please!
Minimum wage is ~1/2-1/3 of my salary so I know that everyone is doing OK.
Any space that has few homeless in the Netherlands doesn't have them because the police removes them (that is to say, they dump them elsewhere or otherwise force them to leave).
Even if the trade off is worth it considering only first order effects (i.e. $/hr) will those work/life attitudes end up influencing the US workers as well?
Not making a value statement here at all, just laying out the consideration.
If I could work remotely from the mountains in Colorado again, I would consider it for a 3x increase. Less than that, and it's just not worth it. The quality of life here is that much better imo.
> They can't fathom that hours in seat don't equal output.
Or at least not the implication.
Of course those things aren’t strictly equal but it seems like wishful thinking to believe that all those Americans working hard are not accomplishing any more than their European colleagues taking 30 day vacations and leaving at five o’clock. Diminishing returns, sure, but zero returns I don’t buy. On the contrary it’s pretty clear the returns are meaningful.
Life is about trade-offs. It doesn’t do anyone any good to pretend there’s such a thing as a free lunch.
I never felt bad about leaving at 3 in Germany though. I did/do in Canada. _Every_time_.
It has been a measured fact that productivity per hour curves in the negative direction after about 7 hours per day (in sum, not necessarily contiguous).
Canada has out of control immigrations quotas. It's no wonder their own government are bragging that their devs are worth 50K less than in America [0].
[0] https://globalnews.ca/news/4178326/amazon-vancouver-tech-wor...
https://www.ft.com/content/3dad4ef3-59e8-437e-8f63-f629a5b7d...
I was already aware of at least two big trading firms opening significant offices here, and now I expect there to be more. For those interested in fintec, Amsterdam is going to offer a lot of good options soon.
Likewise for Catawiki. Their listed salaries were significantly higher than what I think is typical here, but I never saw anything over 100k.
The #1 challenge is that most salary ranges for advertised positions are not listed. If you are talking to a recruiter, the recruiter can usually give a range, but still I've never heard these numbers. I get approached weekly for "senior" positions that are in the 50-60 range.
Frankly, I don't believe the high salaries he talks about are numerous. There may be a few, but it would be shocking to find out that 150+k is typical in the examples he mentions.
In the US, particularly west coast and NYC (finance), 200+k is not surprising. 600k? I seriously doubt that is common, unless you're working in a hedge fund and getting 300k bonuses based on company performance.
Generally speaking, the Dutch workplace doesn't seem to hold developers in the esteem that they hold managers. Maybe that's reasonable, but it certainly puts the Netherlands at a competitive disadvantage. The company I work for would like to hire 5 Rails devs, but they cannot find anyone with the desired experience at the offered pay.
Note: 'comp packages'. Their salary won't always be over 150k, but when including stock and bonus, total comp will be. That's many thousands of SWEs.
If you look at advertised salaries, you won't see those numbers, because it won't include bonus/stock as those are considered 'at risk'. But considering that to not get bonus/stock you need to be on a verge of getting fired, it's not exactly a large risk.
Re 600k: It's not that uncommon. In excess of 5% of Big Tech SWEs make that sort of money.
Nitpick: of those three, only Dublin is in the EU.
1) It's factually wrong.
2) These 3 countries are paying in 3 different currencies so you might want to clarify 150k of WHAT. With an exchange rate of 1.4 in some directions it's actually quite important ^^
3) No matter the currency, it's still factually wrong :D
If you want to be more specific, you really want to clarify the currency and the location because there is a massive disparity.
The highest paying by far is Zurich, in CHF, that also happens to have the lowest exchange rate (though it's been climbing steadily over the past decade).
1. 'salary' != 'total comp'. The bonus + stock components are substantial.
2. 'The majority' does not mean 'everyone'. There are def SWEs that have less than EUR150K as total comp, they are just the minority of all SWEs employed.
3. 'total comp' is very strongly affected by performance. High performing engineers at the same level can see a total comp twice what their lesser performing peers get. Looking at only 1 or 2 people can give a very skewed picture versus the real overall data.
4. Recruiter invitations will NOT be for total comp, only salary, because BigTech are careful to avoid any sort of implied contract or commitment for the bonus/stock portion of the comp. This creates a slightly odd dynamic where the recruiters can't talk about the real comp for the position. Given that bonus/stock is such a large fraction of comp it means that people will turn down recruiters in the mistaken belief that the comp is too low (as you apparently did?)
5. Zurich does pay a bit higher but on an absolute scale, it's nothing to do with the exchange rate. (ZRH total comp converted from francs to pounds is still likely to be a bit higher than the equiv London SWE total comp).
2. If you consider L5 (senior) and above to be the majority then that might be true, but I wouldn't call that the majority.
We can agree that it's meaningless to discuss comp online with no context. ;)
P.S. Zurich pays more on the lower levels.
It’s primarily either senior engineers who consistently have outsized business impact (for instance identifying and building systems that generate tens of millions of new recurring revenue for the company each year), or are significantly beyond senior, such that they’re having a similar business impact as would be expected of the C-suite of a 10-100 million/year company.
When you have a tech company with 10 billion/yr revenue, you need hundreds of people that fit into the above scopes. It’s definitely not most employees, but a career path into those positions becomes possible. Whereas in a smaller or less tech focused business there wouldn’t be enough scope for those people to justify their outsized pay.
In those cases, if the numbers add up (600k dev generates +3+MM revenue per year because of what and how they do), then it makes sense.
Perhaps the biggest shift in EU developer salaries will come from a shift in what types of businesses operate here. If that begins with US tech companies expanding here, then great. But I would like to see EU founded and grown tech companies to compete. I'm afraid what probably happens is the good ideas get built here and bought up by the US giants.
[0] M2 is an engineering manager with quite a bit of scope, possibly with some M1s as reports. Imagine a group of 20-50 people total. Exact headcount can vary because "scope" is a bit of an abstract concept that is correlated with -- but not perfectly matched to -- headcount.
I feel that very often when Europe compares itself to the US on this, they only look at the super HCOL areas like SV, Seattle, NYC.
I feel like we are underpaid still, compared to SV and NYC devs.
For another comparison my coworker was recently promoted to senior dev and he is starting in the mid 90s.
Also there is no fancy comp, we have employee health insurance(that we still have to pay for both monthly and when we use any medical service -- for non Americans this is very standard), we have a 401k(retirement portfolio) that our employer matches the first 5% of everything that goes into it. We also have a few other niche benefits, but no fancy comp.
I just wanted to give a more realistic portrayal of the usual American dev.
Germany still puts a lot of emphasis on the state pension system. They also acknowledged quite some time ago now that they need a private system next to it. But in true German fashion it's very bureaucratic and puts all of your money in some insurance companies hands.
Instead of giving you tax free accumulation in whatever financial vehicle you choose, everything has to go through funds that scrape off most of your profits. Well actually they give you ~800EUR of interest/dividend/capital gains tax free.
Just so you understand, in Canada I can pay ~$CAD5500 (it changes from year to year) into a tax free savings account with after tax money. None of the gains or dividends from this will ever be taxed. And an RRSP I can contribute 18% of last year's income to (max ~$27.000CAD right now) and the capital gains and dividends from this can grow tax free and I only pay taxes on it once I'm retired and in a lower bracket and contributions lower my current tax burden.
And Germany allows me 800EUR of tax free dividends/gains. Laughable. Truly abysmal.
(at least instead of paying your regular tax rate on capital gains/dividends beyond those 800EUR, which at max is 45%, you just pay 25% regardless of your income - haha).
Part of the problem is lack of awareness, and prior to more recently, lack of remote options. There are countless job boards and recruiting firms, and millions of "candidates" (many of whom fail FizzBuzz, but that is not visible in a simple resume).
If the qualified supply and the demand had awareness of each other, and if remote were an option, it would be better for most people. The companies would be able to acquire the talent they needed, and the talent would have better options.
On the other hand, the current system works enough... there may be some low quality developers working at some companies, but they just may be getting enough done that the companies can function. And the more skilled, more motivated people will obviously seek and possibly move for the better jobs and pay.
literal evidence, I can see cars advertised for sale that are essentially the same price point as they were in the 1990s (working person's market), yet the Dow Jones market average went from "breaking ten thousand" to what, thirty thousand plus now?
Something is very, very suspect with the high-end money game in the last thirty years. People who do actual work? see George Carlin, he will tell you
EDIT: I had written 70,000 per month but meant 7,000... which is 84,000 per year, or just below 100,000 USD.
Edit I should add I'm also earning well above that as snr engineer in Amsterdam at a startup.
This is what the "general contractor" is paid by the huge corporation. Not sure how much of that goes to the individual contractor and will depend on negotiation. Also there were some people that were billed at higher rates but obviously they would try and keep the number of those low.
Also keep in mind that from that you would have to pay all of the health and employment insurance premiums yourself. If your employer pays you 65kEUR they pay quite a bit on top of that in employment insurance health insurance etc.
Also, your 75€/h gives about 125-130k€/year, not 156k. So those guys would probably get paid 50-60k€ before taxes.
I guess it depends on how you calculate as well:
My calculation was a simple 75EUR per hour * 40 hours per week * 52 weeks a year to arrive at 156k.
We could also go with 75EUR per hour * 8 hours a day * 255 business days in 2021 (I chose Hesse as the state as that's where Frankfurt is located, home to lots of banks and such, i.e. lots of contracting). That's 153k.
Since you're a contractor, choose how many weeks of vacation you wanna give yourself and subtract.
If you as a contractor get only 30k before taxes, then something is seriously wrong. I worked for a contracting company back when and that's what the rates are based on. I was an internal employee for them and I got paid more than the 30k you quote. I doubt an actual external contractor that we just placed would get less or just on par of what us employees got. That would not make any financial sense, as they would have to pay their own taxes, insurance etc. from it, while we don't.
I counted around 215-220 days of work per year for an employee. When counting holidays and so on that's about what you get in my experience in several European countries (mainly France and Spain, but also Germany where rates are higher it's true).
And yes, those employees get paid less than the internal employees of their customer. That's why they're often young.
Concerning freelance contractors, they get the full 100k€+ a year, but they then about half is going away in taxes. Still it's significantly more than employees, which compensates for the instability.
And I can definitely corroborate the "young" part as well. We had some external contractors that we placed with our clients that made less than the 75EUR (IIRC maybe 60EUR or something) but they were young and/or from Eastern Europe.
$200k is about 168k EUR, and that would give you a really nice life in Amsterdam (which is one of the more expensive EU cities). Assuming you like the character of the city, and pre-covid could tolerate the tourists (big challenge there!), it is a pretty great place.
Add some stock options, and bank those for retirement, and you have a heck of a great life just about anywhere in EU.
I feel Europeans looking in on the US from the outside consistently have a misleading view on healthcare. I'm saying this as a European in the US working in big tech.
My plan's maximum out-of-pocket in a year is ~$3k, which I can pay pre-tax thanks to an HSA. It is less than 2% of my total comp in the worst case (in 2020 I spent less than $300 on healthcare). In return I get coverage that is generally better than the free public healthcare back in Europe.
I think CoL is similar, but not as clear cut. One thing CoL discussions often miss is that many expenses are independent of the local CoL; for example, a Macbook Pro costs the same in every US city. If your salary adjusts exactly for CoL, you're actually doing better because of this.
What I'd like to know is how much NHS-level healthcare would cost me in the US. Given a monthly payment, I want 100% of everything covered all the time. No out-of-pocket, no out-of-network, everything with no exceptions. I'm happy with generics, a bit of a wait and a non-private room, but I want 0 unexpected bills.
Maybe companies like Kaiser do things like that?
If you're employed by a tech company, the out-of-pocket costs to you will be $0, and your standard of care will probably go up.
Yes, you will occasionally have a $10 or $20 co-pay, but on a tech salary costs are negligible unless you're on a ton of meds.
The problem with care in the US is how it's impacting the lower-middle class and the poor. The professional class generally have great care and don't pay much for it.
US healthcare sucks in general, but for the wealthy (and most of the people reading this site falls into this category) it is actually pretty good.
Health care cost, or the predictability of it, is not an issue to not move to the US IMHO.
What if your partner gets in that car crash, or your kid has an expensive birth defect? Expensive care is a matter of time, not a matter of luck. It really makes me uncomfortable as well that timing or location (or employment) seem to matter.
The main issue is if you have no job, when you live you are offered what is called I think Cobra that will keep you on a similar plan. I’ve heard from coworkers that left, sometimes not voluntarily, that it is not cheap at all. California also has decent options for private insurance.
My wife was covered before we were married as well, being in a stable relationship was enough.
And yes agree I would like healthcare to be not tied to employment.
Yeah, I mean no shit. It's like that all over the world.
What is really important is how healthcare is for the 99% rest of population, who needs help more than you who are wealthy. That's the problem.
Wealthy people in the US are over-tested, which leads to over-diagnosis and over-treatment, and these things cause harm.
Six months later, I get a letter from a collections agency saying I owed $700. Confused, I call Kaiser to find out that not only was the $200 not the entire amount, they also apparently had no way of quoting accurately ahead of time (even though they knew exactly what she was coming in for), and as the icing on the cake, they forgot to mail us the bill, which is how it ended up going to collections.
I had to then press them to get an actual bill with itemized numbers, but it doesn't matter because the numbers make no sense anyways: none of the numbers match up to the amounts we paid, the insurance quoted price or the collections amounts. When pressed they all basically shrugged and said they don't understand how any of it works, and that's just how it is.
And the reason for this whole ordeal? We changed health insurance plans and Kaiser said they couldn't renew a prescription because it was a 2-in-1 and insurance only covered the two drugs if they came in separate vials.
I went home. The doctor billed me. I paid. The X-ray tech billed me (a surprisingly small amount). I paid. The hospital never billed me. Then the collections calls started.
(I would expect the cost of the tech to be included in the hospital billing)
(Not saying this feeling is necessarily wrong. Humans may have evolved a feeling that their community should take care of the sick and injured. Demanding more for this act, I think makes a lot of people feel tawdry and icky, in a similar way to paying for sex. Still this is a psychological, not an economic argument.)
Imagine, that you insisted on car insurance that covered every oil change and car wash starting at dollar zero. It'd probably be astronomically expensive.
Maybe. All I know is that if I get sick or any other health emergency, I go to the hospital, they patch me up and I go home or stay there until I'm better. I literally have to do nothing else.
Even knowing what HSA or anything else is, is too much for 90% of the people, including me. Some of us view healthcare as something that should be there for everyone and with as little complications as possible, even if it is more expensive overall. When you're dealing with healthcare, you're most likely in a situation where you want to deal with as little as possible, so free public healthcare really help then.
But as a software engineer in the US it is not a worry. Like not at all.
Cool. What about the rest of you, the majority of people who are not in tech? I get the feeling that many Americans don't worry about services as long as they themselves are covered, while many go without.
But that is beside the issue in this thread. All software engineers can safely move to the US and not worry about healthcare.
Personally I would not move now as I think democracy is dying, but that is a different concern I guess.
~half of the humans don't even have internet access.
In general, the West does not work like the US when it comes to healthcare. And when you compare globally, the US still has the highest "Health Expenditure per capita", far higher than any other country really.
There is no way to spin it, healthcare is absolutely terrible in the US and gets worse every year.
One just needs look at the vaccine distribution situation to see this writ large.
"San Francisco’s only level 1 trauma center does not take private insurance, so if you are taken there, expect an absolutely massive bill despite how good your employer-provided health insurance is."
Sounds like this would be a worry for anyone in the city, software engineer or not.
There is a fundamental difference though. The startups actually use insurance so you have to deal with the insurance company, while Google/Amazon/others self insure and just use the network etc. So if you have Google insurance you call a specific Google number and they will help you. At least that have been my experience.
I still pay a portion of my paycheck for insurance too, and the amount varies depending on which insurance you want. I think the highest I have seen is still less than $500/month for whole family coverage.
Having lived in London, NYC and SF and broken bones in all locations I can say if I could choose to have a big issue I would probably do it in SF but they all gave good treatment and I am thankful and think the healthcare is good enough in all places that I would not even take that into account when choosing where to live of those places.
Maybe you can elaborate a bit more on this.
This is true for all of Google and Amazon (note that this is all Amazon workers including those that work in delivery centers).
On a country wide look we are super privileged, and of course if I could choose I would pay a bit more tax and cover everyone. But that is not an option. I am just saying if you are software engineer, you will most likely be fine.
Edit: Also these big companies don't really have insurance, but insure themselves and just use the network and negotiating capabilities from the insurance companies.
Does that usually apply for out-of-network treatment? Or long-term medication/care?
I’ve had several surgeries, one was over $100k just for the surgery (a broken arm that was healing wrong and had to be reset, all the tendons were turn off from the bone) and insurance paid without any questions.
A stated many times it is not my preferred system, but as a software engineer you and your family will be taken care of and healthcare is not a worry.
Spread out over time, in the places I lived outside of the US that was not really a concern. Same with most other "social care" situations. In the US, it all felt a lot more tenuous which was a source of constant low-key anxiety.
It’s certainly not perfect, and in my citizen hat I think it’s quite flawed, by as experienced by most software engineers it is not a huge concern.
Also when I go to coveredca.org I find that the maximum cost for healthcare this year if I were unemployed and 64 years old would be 76k.
Sadly, each of these figures is substantially more than 2% of my total comp. Sure, my wages as a Bay Area FANG engineer are high compared to European counterparts at less prestigious employers, but the elevated costs of healthcare are still material to me and in fact it is by far the largest expense in my retirement budget (savings for retirement being by far the largest sink for my present income).
You make it sound like Bay Area FANG is more prestigious while in reality they just pay more. There is a difference between admiration and salaries.
For anyone that will listen I will tell them not to answer to the lure of prestige and 'benefits' of FAANGs but a lot won't. It's just too prestigious for them. Who doesn't want to work for Google?
Who wouldn't have wanted to work for IBM back in the day?
(a friend of mine worked for IBM precisely because it would look good on a CV even today and is now at Google ;))
It's a good place to be if you're in the upper middle class and above, but people working in the service industry have worse healthcare outcomes in the US than in Europe.
1) Numbers are total compensation, the base salary is a LARGE amount below that. Few of the figures are hinting to bonus/shares being 50% of the base, if not more.
That's not to say it's bad but that's something to bear in mind. Some of the quoted companies are worthless because non public, other companies might go either way (Uber is not Facebook/Apple/Microsoft when it comes to stock). You certainly want to see how the shares are allocated, on what schedules, how's the taxation is working (US equity in US dollar can be big pain in Europe). Bonus are for those who believe in them (Uber is not known for having nice and stable management layer).
2) These are staff engineer positions, which are incredibly rare and selective.
- Not sure if Uber Staff is like L6 or L7, either way you're probably not going to achieve that in your lifetime. The later is like the head of a department with 100+ people below them them, basically a whole small company (if you want to talk about individual contributors it's even rarer than that). For the former, we're talking about a person with two decades of experience in tech and probably a chunk in the web industry (better have competing offers from Facebook London or Google Zurich).
That's really the counterpart to the $600k developers from SV/NYC, a very far cry from the average developer, even a far cry from the usual good performer.
edit: Uber only IPO'ed in 2019. The article is talking about offers going as far as 2016. These offers were basically imaginary money. Employees didn't see a penny of it unless they were still in 2020 (after lockup period), and if they were, the realized number was certainly very different than the initial promise (note: Uber went down after IPO).
Unfortunatelly EU has no means of cross-border employment yet other than establishing local subsidiary company. It is unlikely to happen if they "employ" a couple of people in various foreign countries. Company setup procedures and employment laws vary by country, salaries may vary by currency. It is just too complex at small scale.
Then the simpler solution is to use intermediary local contractors agency or just directly pay Euro invoices of long term freelancers.
It is legal but e.g. German companies prefer not to keep such contracts longer than 2 years. Why? That is another story...
An example would be Velocity Global - https://velocityglobal.com/
In Canada (at least where I am) you basically earn employee status. I think it's the same in Germany ("Scheinselbststaendigkeit"). So you have to basically ping pong between two places or earn enough to just take a prolonged vacation until they can hire you back coz they like your work ;)
I am glad to hear the market is moving towards devs in Europe
Traditional businesses hiring devs tend to pay the local rate for "engineers".
Software businesses hiring devs tend to the pay the local rate for "software developers".
Big tech companies with a local branch or remote position pay something way higher than the other two but usually expect much more too.
[1] https://www.ft.com/content/5778f3d0-1b3c-11ea-97df-cc63de1d7...
https://www.notoptional.eu/en/country-ranking
No good stock options, not many getting rich after successful exits. Hence not many to fund the next good venture. A handful of VCs and some banks who had traditional money.
Most of the successful European companies look for an acquisition by a US company as an exit path. Silicon valley has an eco system of people who had successful exits funding the next startup. It is quite rare in Europe.
During the years, I have worked for 3 German companies and none of them offered any stock options.
On the other hand, while working for an Israeli company and for an US company, I have gained about the same amount from selling the vested stock options of those companies as from the salary, i.e., due to the stock options, the total compensation was eventually about double compared to the salary.
I think this will be the most important legacy of COVID.
Although I know for a fact this is true, in the case of Stripe at least, I haven't been able to fit any role that fits myself (frontend/junior) so I guess they're looking only for more senior positions in this remote-covid post-era...
PS: If anyone at Stripe is hiring for more junior/middle frontend sofware engineer or fullstack node/ts/js/graphql/jamstack/serverless positions do let me know! mail on the profile
Currently i am doing consulting, building up the organization to be more modern, creating videos, system architecture positions for customers, golang courses and development, some frontend stuff. Is this something similiar to these top paying companies?
And do all of these require the leetcode interviews you always read about? Sure would like to double my salary in germany haha
They should add, [but not that much more expensive].
It seems like in a lot of the tech hubs in the US you need to make ~120k+ for a middle-class family lifestyle whereas in almost all European cities with 50-70k you're probably good.
the point of the article mentioning the "but cost of living" rebuttal was specifically to point this out, they just didn't finish the sentence to drive the point home.
So the 300k guy is in that last segment of the 'tripolar' camp the author talks about, but that is a small one.