Is it true that the price of software sold directly correlates with the salaries of IT employees (Mainly tech and sales)?

  • This is a very broad question. What are you planning to do with this information? If you tell us what your goal is, it's probably easier to get something answerable. – Erik Mar 6 '19 at 8:58
  • goal is job hunting advice – feynman Mar 6 '19 at 8:59
  • 1
    Are you looking to get the highest possible salary as a software engineer? That's a much more answerable question than explaining how salaries are decided, which varies from company to company, and probably won't help you much. – Erik Mar 6 '19 at 9:01
  • not necessarily software engineer. could b salesmen or any tech personnel – feynman Mar 6 '19 at 9:03
  • This is going to vary from company to company. There's no one answer we can give you here. – David K Mar 6 '19 at 12:36

There is no direct correlation between the price of an individual product and the salary of employees.

However, there is a general (weak) correlation between the financial foundation of a company and the general employment situation.

If a company does not have a healthy financial foundation, i.e. does not have a product that makes more money than it costs (and no other source of income), it is likely that payment will be sub-average and/OR employment will be volatile, e.g. they might let you go soon after hiring you, contracts might be time-limited if not in an at-will country anyway etc. Note that this is much harder to assess and the result can be either more risk (with high pay to attract you) or lower pay. Note that the products and how well they sell is not the only aspect, some companies might simply have a benevolent owner that finances the company with other income, e.g. out of strategic interest or personal conviction. Other cases are startups that repeatedly get investor money. And many companies that fall into this category try to counter-balance the high risk/underpayment with potentially high gain in the future, e.g. via stock options in the company.

The only certain way to establish the salary in a company is to apply for a position and see what you can get, but you can roughly gauge the risk for underpayment and employment volatility if you know the financial situation of the company.


Is it true that the more expensive the software is sold, the higher the salaries of sales and tech teams in this software company?

No, it's determined by the human resource market that is available for hire and a host of other factors. Price of the product alone means little. I can have a million dollar product that needs little maintenance and 2 sales a year, or I could have a $100 product with a million sales a year, or any other combination.

On top of this some extremely expensive software is actually fairly easy to develop, a lot of the cost is in legislated compliance and security, hardware, support and even just a big markup because it's a specialised niche or requires secrecy or has no resale value.


Is it true that the more expensive software is sold, the higher the salaries of sales and tech teams

Not necessarily, A lot of people have high priced software that is very basic. For example anyone can make a chat bot based off a template and a guide but they sell for a very high price to the right buyer.

However more likely than not, expensive software requires high skill engineers to develop meaning that salaries will be higher but the level of skill within these companies will also be higher. It's not a direct correlation between salaries and price of software, it all depends on the company and the people higher up.

To answer the title,

What determines salary in a software company?

Depends on the role but most of the times it's ability, experience and demand for what you can offer. Very little to do with the price that the company sells the software for. Potentially loyalty within the company, longer service can allow an employee to climb bands and get pay raises gradually.

  • 1
    Also many companies have salary bands or tie salary into grades. – Justin Mar 6 '19 at 9:27
  • @Justin Absolutely, I added a bit for loyalty and service time – Twyxz Mar 6 '19 at 9:32

Is it true that the price of software sold directly correlates with the salaries of IT employees (Mainly tech and sales)?


Vendors don't price their software based on what they pay employees. And conversely, employers don't set their employee salaries based on the cost of their goods.

There is no direct correlation. That's not how prices and salaries work.

Not the answer you're looking for? Browse other questions tagged .