Understanding Tech Industry Salaries: Breakdown of a Software Engineer's 2.5 Year Earnings
Unlock the secrets of FAANG companies' high salaries and discover how much software engineers can earn with real-life examples, including Guddu Bhaiyaa's 2.5-year career journey at Cultfit and Google.
- Here are 22 clean bullet points summarizing the video:
- FAANG companies are known for their high salaries.
- The tech industry experienced a boom after Covid-19, leading to strong demand and good salaries.
- There are three components of salary: base salary, bonuses, and equity/ESOPs.
- Base salary is the amount received in the bank account each month.
- Taxes are imposed on it, so the take-home pay is lower than the gross salary.
- Joining bonus, work-from-home bonus, and relocation bonus are types of bonuses.
- Joining bonus: given when joining a company.
- Work-from-home bonus: given during the pandemic to facilitate remote work.
- Relocation bonus: given for moving to a new location for work.
- Year-end bonus: given at the end of each year.
- Equity is allocated to employees in publicly traded companies, while ESOPs are used in startups.
- Both equity and ESOPs are vested over time (typically 3-4 years).
- Public company equity can be sold once vested, but ESOPs cannot.
- ESOPs can be converted into cash under certain circumstances.
- Example: Guddu Bhaiyaa's Salary
- Guddu Bhaiyaa graduated in 2021 and joined Cultfit through campus placement (CTC: 28 LPA).
- Base salary: ₹19.5 lakhs.
- Work-from-home bonus: ₹50,000 (to buy a table chair).
- ESOPs worth ₹7 lakhs, vested over 4 years.
- Guddu Bhaiyaa's Salary Breakdown
- One-year package (excluding 3-year equity): ₹22.75 LPA.
- Guddu Bhaiyaa left Cultfit after 11 months to join Google (dream company).
- Base salary: ₹22.44 LPA.
- Joining bonus: ₹2 lakhs.
- Relocation bonus: ₹1.7 lakhs.
- Year-end bonus: ₹3.36 lakhs.
- Equity: ₹31.8 lakhs, vested over 4 years.
- One-year package (excluding 3-year equity): ₹40 LPA.
- Total salary in 16 months: ₹47.48 lakhs.
- Total Income: ₹18.37 lakhs from Cultfit and ₹47.48 lakhs from Google = ₹65.8 lakhs.
Source: Fraz via YouTube
❓ What do you think? What is the most significant factor that determines a software engineer's total compensation package over the course of their career? Feel free to share your thoughts in the comments!