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Tech Career Insights: Developer Salaries Across Tech Hubs in South Africa and the UK

Developer Salaries Across Tech Hubs in South Africa and the UK

By Josh Nel

Software developers are in high demand worldwide, and hiring has gone from being hyperlocal to global. Remote work has made it easier for companies to hire top tech talent from hubs around the world. In this article, we’ll explore average developer salaries in the tech hubs of Cape Town, Johannesburg, Glasgow, Manchester and London.

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Tech innovation is truly global

The UK tech industry has expanded considerably over the past few years:

2022 has been a great year for the UK’s tech scene, and it now ranks second globally for startup investment. So far, UK startups have received $15.6b in total investment, which is double that of any other European market.

England’s capital, London, is leading the way among UK tech hubs with $11.3b in total investment. That makes it the biggest European hub for start-up investment so far in 2022. However, it’s not just London’s tech scene that’s thriving.

Manchester is another hotspot contributing to the UK’s thriving tech scene. In 2021, it was named the fastest growing UK tech hub and is home to six of the 14 digital unicorns in the UK.

Scotland is also home to some of the UK’s fastest-growing tech hubs, and its largest city, Glasgow, is at the heart of this development. In fact, tech vacancies in Glasgow have increased by 25% year on year.

Tech’s rapid growth extends beyond Europe:

South Africa is Africa’s tech powerhouse and continues to gain traction internationally.

Cape Town — one of the country’s three capital cities — is the continent’s tech capital and the new home of Amazon’s African headquarters. Johannesburg is the country’s most populous city and its second-largest tech hub.

Tech’s global reach, and the shift to remote, allow developers to work in any tech hub of their choice.

Remote work means benchmarking salaries across regions:

While remote work has made it easier to compete for top tech talent globally, it also means hiring teams have to benchmark salaries across regions and understand how differences in tax rates, employment costs, and cost of living play into that.

Attracting top developers requires more than just a competitive salary. You must understand what developers are looking for and how your offer compares to local competitors.

With that in mind, let’s look at the average developer salaries across roles and experience levels in each hub and how they compare to one another.

London leads the way for average pre-tax salaries

Average Annual Pre-tax Developer Salaries

City Average Annual Pre-Tax Salary
London £60,344
Glasgow £38,290
Manchester £38,066
Cape Town £32,403
Johannesburg £26,464

Based on pre-tax salaries only, London is the place to be for developers:

The average London developer’s salary is £60 344 per year, giving them the highest pre-tax salary.

This is 57.6% higher than the average Glasgow developer’s salary in second place and 58.5% higher than Manchester’s. Software developers in London earn 86.2% higher than those in Cape Town and a massive 128% higher than developers in Johannesburg.

Employment costs impact what an average salary costs your company

Average Annual Employment Costs

City Average Annual Employment Cost
London £69,728
Glasgow £44,244
Manchester £43,985
Cape Town £32,500
Johannesburg £26,544

A developer’s average salary isn’t the only aspect to consider when benchmarking across regions. You also need to consider what employment costs you’ll need to budget for. Employment cost refers to the total cost of a team member’s salary and benefits, as well as payroll taxes.

We’ve used Deel’s Employee Cost Calculator to give you an estimate of average developer salaries across the cities, including the cost of employing a developer in each location.

Software developers in London continue to lead the way with a total average employment cost of £69 727, which is £9 384 more than just average salaries in the area.

Glasgow remains in second place, with a total average employment cost of £44 244, £35 more than the average for Manchester.

South African developers have the lowest average employment costs at £26 544 for Johannesburg and £32 500 for Cape Town.

Focusing on the pre-tax salary doesn’t tell the whole story. Post-tax salary is a better guide to what developers take home each month.

London still has the highest average post-tax salaries

Average Annual Post-Tax Developer Salaries

City Average Annual Post-Tax Salary
London £43,455
Glasgow £29,636
Manchester £29,590
Cape Town £24,606
Johannesburg £20,805

London remains the best-paying of the tech hubs once the tax has been deducted. Software developers in London earn an average annual post-tax salary of £45 455, 46.6% more than second-placed Glasgow at £29 335.

Less than £46 separates average developer salaries in Glasgow from those in third-placed Manchester.

Developers in London still out-earn their Cape Town counterparts by about 76%, and Johannesburg remains in last place with an average post-tax salary that’s less than half of Londoners’.

However, developers in South Africa benefit from a tax rate and cost of living that’s significantly lower than in the UK.

Johannesburg offers the highest standard of living relative to its average salaries

City Average Post-tax Salaries Adjusted for Cost of Living
Johannesburg £61,554
Cape Town £56,248
Glasgow £45,400
London £43,455
Manchester £42,306

We’ve used Numbeo’s cost of living calculator to give you a clearer picture of the standard of living for developers with each city’s average post-tax salary.

To do this, we looked at what developers in London would need to earn to match the standard of living in each of the other tech hubs.

Glasgow represents the best value for money in the UK: The average developer’s buying power in Glasgow is 4.5% more than in London.

On the other hand, Manchester represents the worst value for money in the list of tech hubs. Developers here have a buying power that’s 2.6% lower than those in London. So, developers in Manchester would need to earn more than those based in London to maintain the same standard of living.

On the other hand, Johannesburg offers the best value for money for software developers, with a buying power that’s approximately 42% higher than in London and ahead of the country’s other tech hub, Cape Town.

That means that an attractive salary by Johannesburg’s standards is more affordable than the average London developer’s salary.

In summary

While remote work has opened up global hiring opportunities, it’s important to do your homework when benchmarking salary ranges. As we’ve seen, a pre-tax salary isn’t the best indicator of a developer’s take-home pay and the quality of living they can expect.

Our advice is to research the tax rate and average salary in that region and identify any other standard deductions developers will have to make. This can help you understand how your offer compares to local competitors. It’s also always important to keep in mind that every individual’s context is different.

Compensation is a personal conversation that should take place between employee and employer and consider the nature of work, perks, and other contextual factors like tech stack or industry.

Keep in mind

There are thousands of factors that influence developer salaries ranging from company size to tech stack.

For the purposes of this article, we’ve only considered average developer salaries in each city. These are averages for all developers and seniority levels. They are used to illustrate how factors like tax and cost of living influence developer salaries in different countries.

South African salary amounts are based on data provided by more than 3200 respondents in OfferZen’s 2022 State of South Africa’s Software Developer Nation Report. European salary averages are taken from Glassdoor.com. All salary figures are based on the latest available data for the year.

We’ve used a £1 to R19.80 exchange rate for our currency conversions shown in this article.

We’ve used local tax calculators to give you a rough estimate of post-tax salaries in each city. For South Africa, we’ve used Old Mutual’s tax calculator. We’ve excluded pension contributions from our calculation.

Post-tax salaries for the UK hubs were calculated using the Gov.uk’s tax calculator.

We compared the cost of living in each city using Numbeo.com. The results showed that Manchester was the most expensive city for the cost of living, followed by London, Glasgow, Cape Town and Johannesburg.

Estimated employment costs were calculated using Deel’s Employee Cost Calculator. All figures were calculated using the average annual salary in Pound Sterling.

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