When many people hear about how much a tech employee in Silicon Valley is making, they might scoff at the high wage. However, an entry level salary for a software engineer in Silicon Valley would still have to put 50% of his or her after-tax income towards housing. That's just the California housing market.
Zillow analyzed tech employees salaries and average living costs in two tech hubs, Silicon Valley and Seattle, to find out if the pay off is any different for either location. What they found is that the median base salary for an entry level engineer is roughly $5,000 to $10,000 higher than it is in Seattle. Yet, that increase doesn't make up for the difference in living costs.
A single, entry-level software engineer in Silicon Valley with no additional income beyond their salary can expect to spend more than over half of their after-tax income on housing costs – either to rent or buy – for the median home in the communities where their colleagues typically live. In the Seattle area, the share of income necessary to rent or buy the typical home where local Google/Microsoft workers live hovers around 30 percent, a prudent standard by historic norms.