See the updated version, Developers’ salary level in Finland 2022, here.
In recent years, the main talking points in the IT sector have been both the shortage of experts as well as the salary level for software developers. We at Talented have met thousands of software developers and talked about salary with every single one of them. Most of the developers we meet have worked at Finland’s most attractive workplaces in senior or lead roles. At the same time we have been talking with hundreds of employers, from startups to listed companies. Discussions on both sides of the table keep us informed about the current salary levels and developers’ aspirations.
How is the salary determined?
Salary is a fee for the work done by the person and the value it generates to the company. In other words, salary is always justified.
Some of the most prestigious software consultancies in Finland include Vincit, Reaktor, Gofore and Futurice. They all build digital business for their customers, receiving compensation for the hours spent on projects. Of course, the consultants working on these projects are paid, and when it comes to salary, the consultant’s billing rate plays a central role. The hourly rate for an experienced software consultant falls on both sides of €100. For a specialist it can be close to €200.
For example, for a developer earning €5,000 per month, a salary with expenses would mean a cost of approximately €6,500 to the company (gross salary * 1.3, which roughly includes the costs associated with paying wages). Operational and administrative costs, from premises to sales, will be added to this, which will significantly increase costs. Especially in the above-mentioned companies, where the framework for work is top-notch, this part of the cost is also relatively high. However, as a consultant, you mainly work at you client’s premises, which can be frustrating when you still have to contribute to your employer’s luxuries and amusements at the office, where you rarely spend any time.
Product companies, i.e. companies that build and sell their own products, are in theory the only environment where high pay is possible. Successful product houses include Smartly, Unity Technologies and Supercell. In these developer-built products are distributed and sold throughout the world, so the financial benefits obtained can be really significant in some places. However, software developers’ salaries in these are mostly fixed, rather than tied to the success of the company’s business.
Salary level for software developers in Finland 2021
The gross monthly salary for experienced software developers is between €4,800 and €6,000. At the top of the range tasks often involve responsibility in design, sales or team leading. Developers who make above-average salary can also have niche expertise or their salary can be partially based on commission.
Commission based salary refers to a model in which part of the salary is tied to the work carried out, for example the employee’s personal monthly billing from the customer. Projects sold at a higher hourly rate generate more euros for the company, but also benefit the employee directly in the form of higher monthly salary. If, on the other hand, the employee is on away from work a lot or the client is not willing to pay for their expertise, the commission based salary will be reflected in a lower than average wage.
One can increase their salary level by, for example, learning new skills, pursuing a senior or lead role, or changing jobs.
Examples of different commission based salary models in Finnish IT companies
Fixed €3,500/month + 10% of personal billing
€3,500 + €95/h * 150h * 10% = €4,925
€3,500 + €110/h * 150h * 10% = €5,150
Fixed €3,000/month + 10-20% of personal billing
€3,000 + €95/h * 150h * 10% = €4,425
€3,000 + €110/h * 150h * 20% = €6,300
Here the employee’s experience and competence affect the salary greatly. Customers are usually willing to pay more for experienced software developers, and more experienced employees tend to have a higher share of billing.
Fixed salary levels in Finnish IT companies
When it comes to fixed salaries, the amount of money earned correlates directly with the benefit that the employee generates for the company. More inexperienced software developers make less money and those with design, sales or team lead responsibilities earn clearly more. Roughly speaking, we have noticed the following wage ranges by experience level:
Junior Developer: €3,000 – €3,800
Developer: €3,800 – €4,700
Senior Developer: €4,700 – €5,700
Architect/Lead Developer: €5,800 – €7,000
The salary levels are a few hundred euros lower outside the capital area. However, if your current salary level falls notably below these ranges, it may be wise to discuss the issue with your employer or to switch jobs.
In Finland, high tax rates effectively offset the benefits of higher wages. However, only talking about the money is misleading especially when it comes to the most prestigious employers, as many of these companies offer their employees a large number of different benefits with great monetary value. Consequently, when we discuss with developers, we aim to focus on the person’s dreams and career ambitions instead of salary, and thus find the most fun and suitable job for them.
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