Cost of Living vs Salary – Best Cities for Software Developers and Engineers

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.

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.

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.

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.

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.

Notes about data in this blog post: Salary data from and 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’s COL calculator. Tax calculations were done using ADP’s paycheck tax calculator.

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41 thoughts on “Cost of Living vs Salary – Best Cities for Software Developers and Engineers

  1. E. Martin

    As an European, I’m very surprised by your high taxes. We always hear the taxes in the USA are very low and that’s the reason your public services are stripped so much. But you pay about one third of your income in taxes, just like we do in Europe? To stay on topic: if you’re (only) interested in raw income (also after taxes), you better stay in (or go to) the USA. But most Europeans think there’s more than raw income 😉

    1. Jeebedeebe

      Wars are expensive. But actually the US has more services than anyone gives it credit for.

      Anyway taxes are lower. In the US we report salaries pre-tax whereas in Europe (at least S. EU countries) you’re usually quoted after tax, or your take home. In a sense the “salary” figure quoted in the US is closer (but not quite) what the employer is willing to pay for you, whereas in the EU the quoted figure is closer to what you receive.

      Taxes are really low wrt to EU when you consider that there is no federal sales tax and most state’s sales tax is lower (considerably in most cases) than 10%. Compare that to the EU’s VAT. Since sales tax are regressive, if you’re middle class, low sales tax really helps.

      1. walter stucco

        In the States you pay every penny you owe, not like that in Europe, excluding loopholes, there are many legal ways to reduce to amount of taxes you have to pay, take for example EU’s VAT, if you are a VAT owner, what you pay in VAT when you buy can be deducted from what you have to pay when you sell.
        Example: if I get paid by a client 5.000 € + VAT (that’s 1.150€ at least in Italy) and you buy a new laptop for work paying 1.000€ + VAT (230€ of tax) you now owe the government 1.150€-230€. So you spent your taxes for something useful for your business.
        Plus, Europe is not really a single country, living in Norway is fucking expensive, I couldn’t afford to live there with my current Italian salary, but I have a pretty good life here.
        I think Public schools and health systems alone, in many european countries, are worth the higher tax rate.
        Said that, it’s true that in countries like mine (Italy) tax rates are too high.

    2. Owen

      The US only has low taxes for low income earners (and maybe the super rich). People making 100 – 250k have comparable tax rates to other countries.

    3. Greg Pederson

      @E. Martin I don’t have exact comparison numbers, but I’ve always suspected the cost of living in the US is on par even with high tax countries like Norway, Sweden and Denmark. I was discussing with a family member about how expensive going to university has become in the US and that some European countries provide that education for free or cheap. He of course pointed out high taxes. I replied that I suspect when you total all of the costs up we’re paying as much or more than if it were covered by our taxes. ie the amount of money left over is probably similar for Americans as it is for Norwegians/Swedes/Danes.

      Another huge difference in my mind is that if you or someone in your immediate family (wife, kids) has a major medical event you could very well end up financially devastated in the US, even with insurance. Insurance may not cover all, may have limits on what they cover or may just deny coverage. These things happen enough that they contribute to a significant number of bankruptcies. Of course no country has the perfect health care system for all of their citizens.

      I also agree that there is more to life than raw income, or extra discretionary income, which is why I personally wouldn’t consider places like Austin and Raleigh. To me, these places don’t have much culture, much activities and are in states run by conservative/religious folks that I don’t agree with. Beyond that, if you really want to bank money as a software person, get a job that pays San Fran salaries and allows remote work and then move to a cheap/developing country. If you happen to be in a state with no income tax you’ll only have to pay federal (IRS) taxes.

      1. Joel

        Greg, I don’t think I’d call Austin “low culture” or low activity. Perhaps you’ve never heard of the Austin City Limits music festival, which is one of the main hubs of the Blues/R&B scene, just one example…

        Anyway, I agree on the remote work idea, but the only fly in your ointment is that your taxed based on the state your income comes from, not where you live. Therefore with your hypothetical San Fran job, you’d have to pay CA income tax regardless of where you actually reside.

        1. Mark

          Actually, that’s not true. Living in NV and telecommuting for a company based in the silicon valley area, I am taxed at NV rates (that is to say, I don’t pay state taxes)

      2. Cory

        This reply is perfect 🙂 Please don’t move to Austin and tell all your friends the same…especially the Californians… 😉 Austin is nothing like the rest of Texas, does not lack for culture, activities, things to do or tacos.

        1. JB

          Agreed! Austin is a great place to visit, but no need to move here. It’s a different pace of life from the “big & fancy” cities. I have a life outside of work, I spend time with friends, and I don’t always know where they work. People say please and thank you, talk to strangers, and are generally nice folks.

    4. EP

      I’m sure you, being an European, know how tax differs greatly per country, even in the European Union.
      For the Netherlands, you will owe the government 52.0% income tax when raking in over €57.585 yearly. Other taxes (like VAT; 21.0% here) also drive up our COL immensely.
      Just wanted to put this out there… paying one third of our income in taxes? Yes please!

  2. Andrew

    I would love to see the information on Madison, WI. Epic employs a large number of developers nearby, and pay a decent amount to get people to live there.


    I’m interested to know how Atlanta, GA fits into this analysis. I would expect that final discretionary amounts in Atlanta are very competitive.

  4. Jeff

    Super interesting concept, thanks for sharing!

    Although the process is a fun number game, there’s a lot more to tech salaries, especially for mid-career engineers, that might skew the data extremely in a different direction: stock-based award compensation, overlapping multi-year vests, regional differences in bonus range expectations, etc. In some cities, top engineers can see disposable income exceed their salaries – hopefully they save, invest or are smart with that!

    There’s no easy way to get those numbers, but in some of the larger tech centers (Seattle, San Jose), it’s common to see mid-career bonus expectations for top engineers exceed 40% of base salary, plus often 60-120% of base salary in long-term stock awards, within a pay-for-performance scale.

    Those very strong compensation trends have not been present in some cities, i.e. Chicago, outside of the temporary excitement of Groupon, but lead to disposable income spikes. If only Glassdoor or other services better matched some of those situations to help with projects like this.

  5. Levi

    Utah Valley also ought to be included in this, there’s a lot going on between Salt Lake City and places like Lehi (Adobe for example) to Provo.

  6. Dan

    Ann Arbor, MI is colloquially known inside the state of Michigan as having an off-the-charts salary:cost-of-living ratio for software developers. Sure, it’s not a huge city, but the numbers are pretty wild.

  7. Christopher A. Petro

    I can’t comment about the other cities, but I can tell you that COL calculator data for NYC is way off. The COL numbers are based on “equal” living arrangements. This means having a large home, a car, car insurance, parking, etc. None of these are things that normal NYC residents do. Life in NYC is very different, and while it is more expensive, it’s not *that* much more expensive unless you try to live a midwest life in the middle of Manhattan. I’ve considered jobs in several of the other cities listed above. By the time I factored in all of the major factors (the huge drop in salary; the huge drop in housing costs; the big cost of buying, fueling, insuring, and maintaining a car; the small savings on food; and the moderate drop in taxes) I ended up with a *loss* of disposable income. Now for some people, the difference in lifestyle might still constitute a major improvement in quality of life, but that’s a matter of taste. I know a lot of people who would rather be broke in a walkable city than rich in a suburb.

  8. Mike

    Interesting results for a high level but I think you need a deeper-dive into COL and may want to try to account for some other factors that may affect some real world realities. For example, any human being is going to be able to put more than $3K into their savings account in Raleigh than in Silicon Valley so they look a little too close in that final graph.
    Also if you’re serious about possibly moving to the PacWest you may want to look at some other comparative analysis between Seattle and Portland. I think the above results are under-representing some of Seattle’s expensiveness and is not accurately representing a cheaper COL in Portland given the lack of sales tax there largely accounting for the differences in income tax rates btw WA and OR. Also Silicon Valley is a clusterfuck of SF, SJ and the actual valley so just using San Jose is not accurately representational of the entire market.

    1. Dave Berkson

      +1 looking at CNN’s COL calculator’s comparison of Seattle and Portland, it appears they do not consider sales tax differences.

      Seattle sales tax: 9.5%
      Portland sales tax: 0

  9. Ryan

    Great analysis. We’ve recently moved between Portland, San Francisco, and Germany — 3 places with widely different salary & tax/benefit — and it is indeed really hard to estimate what constitutes a good pay check. At the end of the day (or year, or career …) the best metric is, how much extra cash do you have for non-essentials, as you’ve captured. But within the category of essential spending, or extra spending, what do you get for your money, subjectively speaking? You can put food on the table, but *good* food is completely subjective. Also, how hard do you have to work for that income? In Europe certainly the working hours are much lower (and vacations much longer) than the Bay Area. Quality of life.

  10. Chuck

    States without income tax usually make it up via property or sales tax. For example, Las Vegas and Austin are over 8% sales tax while Raleigh is just 6.25%. Is that factored into the cost of living?

    1. JB

      The 8.25% sales tax in Texas (capped by state law) doesn’t apply to food, so I see it as a tax on discretionary spend. The larger tax is the 2% property tax on [current] assessed home value. With the number of folks moving into Austin and increasing housing prices, this is putting a dent on our take home pay.

  11. Chris

    I also question the COL factors. As Christopher Petro noted, these metrics don’t mean much unless there was an interactive version that let you put in your own COL preferences. Or at least, had COL factors based on what’s typical for the chosen income bracket in each city.

    For example, in Austin, we have rapidly increasing commute times and housing prices. If you are like me and don’t want to live in suburbia and more than an hour from work, you’ll be priced out of a home. My forecast COL for Austin would be slightly closer to NYC because of my preference to be in a walk-able area.

  12. Mike S.

    I have a single family home in a good public school district valued at around $250k. Recruiters for Amazon have contacted me a few times over the past few years. Even if I was good enough to pass their interview process – which is far from certain – to get a home in an equivalent school district in the Seattle area would cost $300,000 more. That’s at a minimum. So figure between mortgage and property taxes I need at least $2,000 more per month, after federal income tax, just to break even.

    So I tell the recruiter my minimum salary requirement is my current salary + $40,000. Then I never hear from them again. 🙂

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  14. Danno

    Typo in first sentence, missing a “not”…?

    “There are many tech hubs in the United States (which this article will *NOT* cover exclusively, sorry)…”


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