Microsoft Software Engineering Salary: A Guide
“What better way to predict the future than to create it?” That’s the question Microsoft asks of its potential employees. It makes sense because the company has been at the forefront of technical innovation for decades.
Microsoft has built products like Windows, Office 365 and Xbox; and every year, seems to come out with a new idea that changes the way we think about technology. What better place to work as a software engineer than somewhere that is making so much progress?
Compensation is a key factor for any software engineer looking for their next job. You may already know of Microsoft’s stellar working culture and their products, but you may still be wondering: what salary can I expect to earn as a software engineer at Microsoft?
In this guide, we’re going to explore software engineering salaries at Microsoft. We’ll discuss salary information for Microsoft software engineers, what benefits they receive and what levels of compensation are used at Microsoft.
Microsoft Software Engineer Salary Levels
Large-scale companies, such as those in the technology industry, are known for using a level-based system for compensation. This means the salary you’ll earn will be based on your seniority within the business.
It’s true you can negotiate your salary with Microsoft – and there are many cases of this happening. Nonetheless, your salary will likely be near what is offered publicly for the salary tier you qualify for within the company.
So before we talk about how much Microsoft software engineers earn, we need to look through the levels of software engineers at Microsoft. There are nine levels of software engineers with their own job titles, which are as follows:
- Software Development Engineer (SDE) I (59/60)
- Software Development Engineer II (61/62)
- Senior Software Engineer (63/64)
- Principal Software Development Engineer (65/66/67)
- Partner (68/69)
- Distinguished Engineer (70)
- Technical Fellow (90)
It’s worth noting that unlike many big tech companies, Microsoft offers different tiers within each salary level. There are two different salary levels for entry-level software development engineers, which are 59 and 60. This means that there are opportunities for you to earn a higher salary in your job without necessarily having to move up to a more senior position.
Like any big tech company, Microsoft’s tier-based salary structure is quite extensive and the majority of its software engineers work within the lower levels. For example, software development engineers comprise a large majority of the company’s workforce, whereas technical fellows constitute only a small percentage.
How Much Do Microsoft Software Engineers Earn?
The answer to this question is that it depends both on your seniority and your years of experience. Entry-level software engineers will start at the bottom of the salary pyramid and work their way up.
Their salaries are favorable, but not as large as those offered at higher stages in the hierarchy. As you develop more experience as an engineer and earn promotions, your salary prospects will improve commensurately.
Like many technology companies, the salaries offered by Microsoft are competitive. At all levels, engineers are well compensated and when you look at the higher tiers, it’s clear that working hard at Microsoft for a long time can really pay off. Here are the average salaries you can expect to earn based on Microsoft’s salary bands:
|Level Name||Total||Base||Bonus||Stock (/yr)|
Data points on reported salaries sourced from
Microsoft software engineers command impressive salaries, to say the least. For higher levels in the hierarchy, salary estimates were not available. With that said, one trend is clear: higher-up positions within Microsoft offer extremely lucrative salaries.
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In the above table, base compensation is the standard salary you’ll earn. That’s the main source of your compensation. As a software engineer at Microsoft, you’ll also be eligible for a company bonus, which will vary in size depending on your contributions to the company. Stock options are also granted to employees.
Microsoft Software Engineer Stock Options
Like many top technology companies, Microsoft provides its employees stocks in the form of Restricted Stock Units (RSUs). An RSU is a type of compensation where employees can earn shares in the company based on how long they’ve worked at the business. The longer you work at Microsoft, the more stock you’ll be able to earn.
At Microsoft, RSUs are granted using a four-year vesting schedule. Each year, 25 percent of your stock options become available. This means that after working at Microsoft for two years, 50 percent of your initial stock options will be available. However, some RSUs are granted on a five-year vesting schedule at Microsoft.
Benefits of Working at Microsoft
Salaries, bonuses and stock are not all that you should think about when evaluating Microsoft as a prospective employer. You’ll receive a number of additional benefits related to health, well-being, finance and more.
Some benefits of working at Microsoft are unique. For example, Microsoft provides access to an on-site library and reading room where you can go to think, read or work. The company also runs a College Coach program which will help you plan for and navigate your child’s college admissions and financing process.
Other benefits you’ll receive at Microsoft are standard across big technology companies, such as vision and dental insurance. Here are some of the main benefits you can expect to receive as a software engineer at Microsoft:
Insurance and Wellness Benefits
|Health, Dental and Vision Insurance||
|Paid Time Off||15 days for years 0-6, 20 days for 7-12 years of tenure, and 25 days for 13 years of tenure or more.|
|Maternity Leave||20 weeks|
|Health Savings Account||$2,500 per year contributed by Microsoft|
|Free Snacks and Drinks||Free meals if you work in the San Francisco Bay Area|
|Regional Transit System||Stipend to cover travel expenses|
Home, Financial and Other Benefits
|On-Site Car Wash||
|Employee Discount||15 percent off Microsoft products|
|Family Sickness Leave||Four weeks paid leave to care for a seriously ill member of your family|
|Donation Match||Matched donations to charity|
|Employee Stock Purchase Program||Allows a contribution of up to 15 percent of your base salary and gives a 10 percent discount on the purchase of Microsoft stock|
|Roth 401(k) and Mega Backdoor Roth IRA||
|401(k)||50 percent match on contributions up to $19,500.|
Microsoft vs Other Technology Companies
Joining a big technology company is a big decision. It may help you to see the salaries offered by Microsoft in comparison to other companies so you can better evaluate where you’ll earn the best salary. Here’s a table that compares Microsoft’s software engineering salaries with those of Google and Amazon:
|Microsoft vs Amazon Salary||Entry-level||$156,000||$151,000|
|Microsoft vs Amazon Salary||Second level||$170,000||$207,000|
|Microsoft vs Amazon Salary||Third level||$218,000||$305,000|
|Google vs Microsoft Salary||Entry-level||$156,000||$181,000|
|Google vs Microsoft Salary||Second level||$170,000||$258,000|
|Google vs Microsoft Salary||Third level||$218,000||$345,000|
Microsoft is renowned for compensating its employees well for their services. As an entry-level software engineer at Microsoft, you’ll command a salary of at least $156,000 and that number will only increase as you gain more experience and work your way up the salary ladder. What’s more, you may even be able to negotiate a higher salary, which is uncommon in the tech industry.
You’ve also got to consider all of the benefits you would be eligible for as a Microsoft software engineer. You’ll receive a gym and wellness reimbursement, a custom workstation, family sickness leave and more. Between the compensation, the benefits and the innovative technologies you’d be able to work on at Microsoft, it’s clear that there is a lot to love. If you’re thinking about going to work for a big technology company, Microsoft is worth a look.