Tech Salary Comparison by City 2026: What Software Engineers Really Earn (Adjusted for Cost of Living)

If you browse any job board in early 2026, a senior software engineer in San Francisco still commands a raw salary that dwarfs what the same role pays in Austin, Raleigh, or Warsaw. The number on the offer letter looks decisive. Yet the moment you factor in rent, groceries, childcare, and taxes, the rankings flip in ways that surprise even seasoned tech recruiters. This guide breaks down what software engineers actually earn once the cost of living is accounted for, covering twenty domestic cities and six global hubs, plus the emerging reality of location-adjusted remote pay.

Our Methodology: Raw Salary Meets COLI

Salary data without context is misleading. A $210,000 base in Manhattan and a $155,000 base in Raleigh look like different tiers of compensation until you measure what each dollar actually buys. That measurement is what the Cost of Living Index (COLI) provides.

For this analysis we combined three primary data streams. First, we aggregated reported base salaries for mid-level and senior software engineering roles (typically three to eight years of experience) from Levels.fyi, Glassdoor, and the Bureau of Labor Statistics Occupational Employment Survey, capturing postings and self-reports from Q3 2025 through Q1 2026. Second, we applied the Council for Community and Economic Research (C2ER) COLI for domestic cities, which benchmarks a basket of housing, utilities, grocery, transportation, healthcare, and miscellaneous costs against a national average of 100. Third, for international cities we used Numbeo's cost of living index normalized to New York City as the 100-point reference.

The Adjusted Score in our tables is calculated by dividing the raw average salary by the COLI value and multiplying by 100. This normalizes every city's compensation to what it would feel like if you lived in a place with a perfectly average cost of living. A score of $185,000 in Raleigh means that your $155,000 salary stretches as far as $185,000 would in a median-cost U.S. city.

A few important caveats. We are comparing base salary only, excluding equity and bonuses, because stock-based compensation varies enormously by company stage and vesting schedule. We also acknowledge that individual spending patterns differ: someone who never drives will weight transportation costs differently than a car commuter. No single index captures every lifestyle. Still, the COLI is the most widely accepted framework, and it reveals patterns that raw salary alone hides entirely.

Top 20 U.S. Cities Ranked by Purchasing Power

Below are twenty of the largest U.S. tech markets for software engineers, sorted not by raw salary but by adjusted purchasing power. The rank column reflects this adjusted order. Pay close attention to where cities land versus where you might expect them based on headline compensation.

The Biggest Ranking Surprises

The most striking finding is how aggressively the adjustment reshuffles the leaderboard. San Francisco, which leads comfortably in raw salary at $210,000, drops to 19th place once you account for its COLI of 145. New York City, with its $198,000 average, falls to dead last. Meanwhile, Austin vaults to first place and Raleigh-Durham takes second, both beating every coastal tech hub in real purchasing power despite offering raw salaries that are $40,000 to $55,000 lower.

This is not a niche curiosity. It reflects a structural shift that has been accelerating since 2022. The Sun Belt and mid-tier metros have seen sustained tech hiring growth because employers can offer salaries that feel enormous in local context while still saving money compared to Bay Area or New York compensation. For the individual engineer, accepting a Raleigh offer at $155,000 delivers the equivalent buying power of roughly $185,000 in a median-cost city, whereas the seemingly far superior San Francisco offer at $210,000 buys only about $145,000 in equivalent goods and services.

Seattle and Boston, often considered strong alternatives to San Francisco, land in the middle of the pack at 14th and 16th. Their elevated housing costs, state income taxes (in the case of Boston), and general cost inflation erode what look like generous packages on paper. Denver and Atlanta, by contrast, benefit from competitive salaries paired with costs that remain close to the national average.

The Tax Variable

It is worth noting that our COLI-based adjustment does not fully isolate the impact of state income tax. Texas, Florida, and Tennessee levy no state income tax, giving cities like Austin, Tampa, and Nashville an additional edge that is partially but not entirely captured in the cost of living index. An engineer earning $168,000 in Austin avoids roughly $8,000 to $10,000 in state income tax compared to a peer in California. That is effectively a hidden bonus that widens the purchasing power gap even further.

Global Comparison: Six International Tech Hubs

Tech careers are increasingly global, and many engineers weigh offers across borders. Below is a comparison of six major international hubs using the same methodology, with cost of living indexed against New York City as the baseline of 100.

On a global scale, San Francisco still leads because its raw salary is so high that even a COLI of 102 (relative to NYC) leaves a large adjusted number. But the more interesting story is below the top line. Zurich, which attracts engineers with salaries that appear close to American levels, sees its adjusted score drop sharply because the Swiss cost of living is the highest in the world. An engineer in Zurich earning $185,000 has less real purchasing power than one in San Francisco earning $210,000, despite Switzerland's reputation for high salaries.

Bangalore offers a fascinating case. The raw salary of $32,000 looks impossibly low by Western standards, yet the COLI of 28 means that income purchases the equivalent of roughly $114,000 in a median global city. For engineers who plan to stay in India long-term, or who are building savings denominated in local currency, Bangalore offers purchasing power that rivals Berlin and Tokyo. The calculus changes, of course, if the goal is to accumulate dollar-denominated savings or eventually relocate to a higher-cost country.

London and Berlin represent the two ends of the European spectrum. London salaries are higher in absolute terms, but London's cost of living is also significantly steeper, so the two cities converge once adjusted. Berlin remains one of the best value propositions in Western Europe for tech workers, though its cost of living has risen substantially over the past three years as the city's startup ecosystem has matured.

Tokyo and Singapore occupy the Asian middle ground. Singapore's tech salaries have grown rapidly since 2023, driven by Southeast Asian fintech expansion and the relocation of several crypto and Web3 firms. Tokyo's salaries have historically lagged relative to cost of living, but the continued weakness of the yen in 2025 and 2026 has actually made Tokyo more affordable for international comparisons while also pushing some Japanese employers to raise pay in order to retain talent that might otherwise seek remote USD-denominated roles.

Remote Tech Salary Tiers: How Distributed Companies Pay

The rise of permanent remote work has created a parallel compensation system that deserves its own analysis. Three high-profile approaches define the spectrum in 2026.

The Location-Agnostic Model (Basecamp, 37signals)

Basecamp has long paid everyone the same salary regardless of location, benchmarked to the 90th percentile of San Francisco market rates. In 2026, this means a senior developer at Basecamp earns around $205,000 whether they live in Des Moines or Manhattan. The philosophy is simple: pay for the role, not the zip code. For engineers in low-cost cities, this is an extraordinary deal. For those in San Francisco, it is roughly market rate.

The Tiered Discount Model (GitLab)

GitLab uses a transparent location-factor system that adjusts pay based on where an employee lives. The company publishes its compensation calculator publicly, applying a multiplier that can range from roughly 0.45 for low-cost regions to 1.0 for the Bay Area. A role that pays $190,000 in San Francisco might pay $120,000 in a mid-tier U.S. city and $85,000 in parts of Eastern Europe. The system is transparent and predictable, but critics argue it penalizes employees for choosing affordable locations rather than rewarding them for reducing company costs.

The Band-Based Model (Buffer, others)

Buffer groups locations into broad cost-of-living bands rather than applying a precise per-city multiplier. Typically there are three to five tiers: high-cost (San Francisco, New York, London), medium-cost (Denver, Austin, Berlin), low-cost (smaller cities, rural areas, much of Southeast Asia), and sometimes further subdivisions. The salary for a given role and level moves up or down by roughly 10 to 20 percent per tier. This approach is simpler to administer than GitLab's granular model and avoids the perception of paying someone differently because they moved one city over.

For engineers evaluating remote opportunities, the model matters enormously. A Basecamp-style offer is worth far more in Raleigh than in San Francisco. A GitLab-style offer might look lower on paper but could still be competitive in adjusted terms if you live in a moderate-cost location. The key is to run every offer through a purchasing-power adjustment before comparing.

When to Optimize for Raw Salary vs. Purchasing Power

Not everyone should chase the highest adjusted salary. Your optimal strategy depends on your financial goals, career stage, and life plans.

Optimize for Raw Salary When:

• You are saving for a specific dollar-denominated goal. If you plan to save $100,000 for a down payment, invest in index funds, or pay off student loans, the absolute number matters more than local purchasing power. A $210,000 salary in San Francisco, even after high rent, may leave more investable dollars than a $155,000 salary in Raleigh if your savings rate is high enough.
• You are building career capital in a top-tier market. Early-career engineers in San Francisco, New York, or Seattle gain access to a density of networking opportunities, major tech employers, and venture-backed startups that smaller cities cannot replicate. The cost premium is real, but the career acceleration can justify it for two to four years.
• You plan to relocate later. Earning a high raw salary and maintaining minimal expenses (roommates, small apartment) can allow you to accumulate savings that buy significantly more once you move to a lower-cost market. This is the classic "earn in SF, retire in Boise" strategy.

Optimize for Purchasing Power When:

• You are raising a family or value space and stability. The quality of life difference between a two-bedroom apartment in San Francisco and a four-bedroom house in Raleigh is not captured by salary figures alone. If daily comfort, yard space, and school districts drive your decisions, purchasing power is the metric to optimize.
• You are past the early-career networking phase. Mid-career and senior engineers with established reputations, strong remote networks, and proven track records can often access top-tier remote roles from anywhere. At this stage, geographic arbitrage maximizes your overall financial well-being.
• You are an international engineer choosing among global hubs. If your goal is to live well day-to-day rather than to accumulate dollars for a future U.S. relocation, then Berlin at $82,000 with a COLI of 72 provides a better lived experience than London at $108,000 with a COLI of 89.
• You work remotely for a location-agnostic company. If you receive San Francisco-level pay regardless of where you live, then every dollar you save on rent, groceries, and childcare is pure upside. The optimal move is to find a city with strong infrastructure, good internet, and a low cost of living.

Practical Takeaways for 2026

The data tells a clear story: headline salary and financial well-being are often inversely correlated in the tech industry. Here are the actionable conclusions.

First, always run the adjustment. Before accepting or declining any offer, convert the raw salary into an adjusted score using the target city's COLI. The difference can be $40,000 or more in equivalent purchasing power, which is too significant to ignore.

Second, watch the mid-tier cities. Austin, Raleigh, Salt Lake City, Dallas, and Tampa have built critical mass in their tech ecosystems. They are no longer fallback options; they are first-choice destinations for engineers who understand the math. Major employers including Apple, Google, Tesla, Oracle, and Epic Games have significant headcount in these metros, so career growth is not limited.

Third, negotiate with data. When discussing compensation with a recruiter, frame the conversation around purchasing power. If you are comparing a San Francisco offer with an Austin offer, show the adjusted scores. Many recruiters and hiring managers have not done this math themselves, and presenting it clearly can shift the negotiation in your favor.

Fourth, re-evaluate annually. Cost of living indices are not static. A city that is affordable today may become less so as tech workers flock there, driving up housing costs. Austin's COLI has risen meaningfully over the past four years as transplants from the Bay Area have pushed real estate prices higher. The best deal in 2026 may not be the best deal in 2028.

Fifth, consider the complete package. Equity, bonuses, healthcare, 401(k) matching, and remote work flexibility all affect your total compensation. A slightly lower adjusted salary at a company with strong equity upside or exceptional benefits might be the better long-term choice. Use the adjusted base salary as a starting point, then layer in the full picture.

The best salary is not the one with the most zeros. It is the one that buys you the life you actually want to live.