South African tech salaries vs the world’s tech powerhouse – MyBroadband

South African techies can earn significantly higher salaries in a job in the global centre for high technology and innovation, California’s Silicon Valley, than they would locally.

However, housing and living costs in the area are notoriously high.

The region is the birthplace of groundbreaking technologies like silicon-based integrated circuits, microprocessors, and microcomputers.

Silicon Valley is home to many of the world’s biggest high-tech corporations, including about thirty businesses in the Fortune 1000.

These include tech giants like Apple, Google, Intel, Meta, Cisco, Nvidia, Adobe, and HP.

Cities that form part of Silicon Valley include San Jose, Mountain View, Sunnyvale, Palo Alto, Menlo Park, Santa Clara, Redwood City, and Cupertino.

The region employs around 225,300 workers in high-tech jobs, which increases to nearly 400,000 when including the San Francisco Bay area.

Silicon Valley is an alluring option for talented techies in the US, with the highest salaries of any tech hub in the country.

The US is a popular emigration destination for South Africa, with over 139,000 emigrants living in the country by 2022.

Despite a slump in tech hiring in the past few years, the sector continues to see great demand, and South Africans are generally well-regarded for their high work ethic.

MyBroadband used salary comparison tools from Indeed and Payscale to see how salaries for various tech jobs in South Africa compared with the same positions in Silicon Valley.

Across ten popular tech roles, we found the average salary in Silicon Valley was around five times — or 400% — higher than in South Africa.

It was also interesting to note that the best-paying role differed in each country.

Whereas the DevOps Architect in South Africa would earn the highest salary of the ten roles in South Africa, the Senior Solutions Architect would be the top earner in Silicon Valley.

The table below compares the average salaries for various tech jobs in South Africa and Silicon Valley in California in the US.

Living costs and taxes can bite

While the difference in salaries is enormous, it is important to consider that living costs in Silicon Valley are high.

San Jose, home to Google, is the most expensive city to buy or rent in the country.

The average price of a home in this city recently reached $1.5 million (R27 million), while the median rent was $3,300 (R59,248).

At current exchange rates, the latter works out to R705,276 over a year, making up nearly 30% of the average annual salary across the ten jobs we analysed.

In addition, the salaries above are gross and do not factor in income taxes.

In South Africa, roughly 23% of the average R491,093 tech salary will go towards income taxes.

In the US, you will have to pay both federal and state taxes.

24% of the average salary in the US of $133,749 will go towards federal taxes alone. That works out to about $32,100.

California also has the US’s highest individual income tax rates — ranging from 1% to 12.3%.

On the salary of $133,749, you will have to pay a further $9,092.

Counting that together with the federal taxes works out to about $41,191, which makes up 31% of the gross salary.

The upside is that average sales tax of 8.85% on goods and services is substantially lower than South Africa’s 15% VAT.

The differences between income taxes in South Africa and California are detailed in the tables below.

South African tax brackets

US federal tax brackets — Single filers

California tax brackets — Single filers