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Software Engineer vs YouTuber - Who Makes More?

Software Engineer vs YouTuber - Who Makes More?


Who Makes More? 

We are going to be comparing the compensation for your typical software engineer, to someone who actually works on YouTube as a tech influencer or software engineering influencer, or whatever you want to call it. Now, the reason I'm writing this article is because the other day I was looking at kind of the top tech channels or top software engineering channels on YouTube.

And I realized that most of the people that run these channels actually do not work as software engineers. They may have worked as a software engineer previously, maybe they were at Facebook or Amazon or something, and then they quit and they started doing YouTube. But my idea behind this was that they must be making a good amount of money from their YouTube channels.

If they're not actually working as a software engineer, because the salaries for software engineers are so ridiculously high, especially at these big tech companies. Now, as someone that has both worked as a software engineer, as an intern full disclosure there, as well as runs a pretty large YouTube channel, I have a pretty good idea of how much money you make doing both of these things.

And while I want it to compare them here and give you guys kind of a behind-the-scenes and inside scoop into how much YouTubers are really making. So that said, let's go ahead and get started. And I'll talk to you about how much you tubers make vs software engineers.

All right, dive in just one second, I've got a bunch of information to share with you on the computer.

We're going to go to a screencast in just a minute, but I want to quickly state that it's pretty well known how much software engineers make right? You can go to the internet, you can look at videos, you can go and look at specific websites that have listings of all of the different salaries, and well for you guys, you can probably figure out that information pretty easily.

The number that I'm sure you guys are curious about is how much a YouTuber would actually make.

Now, obviously, this is a lot harder to determine.

And when I go through these numbers in just a second, I'm going to be using kind of my personal experience and my understanding of how this, this channel and this business really generates revenue and applying that to kind of a sample channel and we'll pick some numbers and you'll see how that works, but there's a lot of ways in which YouTube has to make money, which people don't realize.



How much does a software engineer earn?


The first thing I'm going to do is share with you the average salaries at large tech companies for software engineers specifically, I'm going to show you how much Google pays their employees and how much Facebook pays their employees. And I want to be really clear here, this information that I'm about to show you is crowdsourced.

So I obviously cannot validate the accuracy of this information. I have never worked at Google or Facebook. I know people that have, and I know the salaries that they've shared with me, but again, this is crowdsourcing. So keep that in mind, this could be wrong. This could be slightly inaccurate, but I know this site to be pretty reliable.

And I know a lot of people in the software engineering industry that have, you know, somewhat validated that what is on this site is, is pretty valid and pretty accurate. So keep that in mind anyways, before I show you this and actually talk more about this website.

I want to quickly mention that the numbers you're about to see here are not representative of the average software engineering salary. In fact, I looked it up before this article to make sure I wasn't misleading anyone in the United States as of 2019, according to indeed.com.

The average, software engineering salary was 107,000 us dollars with an average bonus of 4,000 us dollars. So still a lot of money. You can make a bunch of money working as a software engineer, software engineers are paid very well, but that is nothing compared to what you gonna see here for Google and Facebook.

All right, so let's dive into these numbers. I'm going to be comparing Google and Facebook, and let's start with an entry or new grad engineer.

Software Engineer vs YouTuber - Who Makes More?


So L-3 is a Google's 

Software Engineer vs YouTuber - Who Makes More?

I guess like an entry-level engineer and would be Facebook's entry-level engineer. So at Google has a total compensation, according to this website of $187,826. Again, remember, this is an estimate.

The salary they're stating is supposed to be about 128,000 us dollars a year, and then 38,000 in stock per year. I believe when you work at these companies, you get vested stock over three or four years. So they'll say something like, Hey, we're going to give you $120,000 in stock over three years.

Then you have a targeted bonus of $20,000. That seems about right. Most people I know that work at these companies tell me that they're targeting a bonus of about 15 to 20% per year of their base salary. So anyway, that is what it is for Google. This is a lot of money, right?

This is almost close to double what the average salary is for software engineers in general, in the US.


E-3 Facebook

Software Engineer vs YouTuber - Who Makes More?

This is $179,000. So pretty close to what it was at Google. And while I mean, you guys can read the numbers for yourself.


L-4

Software Engineer vs YouTuber - Who Makes More?

I believe this is usually once you've worked about two years or maybe one and a half, two years, depending on how good you are. You get promoted to an L-4 a and your salary is 155,000 stock is $80,000 a year bonus 27,000 total comp 263, which is a lot of money


E-4
Software Engineer vs YouTuber - Who Makes More?

very similar. So it seems like Facebook is just slightly lower than Google. And while you guys can read the numbers here yourself, yeah, they're pretty much the same.


L- 5

Software Engineer vs YouTuber - Who Makes More?

This is a senior software engineer. I'm not sure how long it would typically take you to get into this position. But if I had to guess, I would say probably 4 or 5, maybe 6 years. but you would definitely have to work at a company for more than, you know, 2 or 3 years to get to this position. Anyways, total compensation of $351,000. The salary didn't really go up a ton, but the stock is significantly higher. And that's kind of the trend as we go through this list.


E-5 Facebook

Software Engineer vs YouTuber - Who Makes More?

377,000 Wow. So that's actually more than at Google. So that's kind of strange considering the other ones. And then we can look at L6 and I'll kind of stop after that because it's not realistic that most people are going to work any higher than this.


L-6

Software Engineer vs YouTuber - Who Makes More?

493,000 us dollars a year. That is a lot of money salary, 225 stock, 21100, and then let's look at Facebook. This is 57200. Wow. So that is actually significantly higher than Google.

Anyways, that is kind of the salaries that you could earn at a big tech company. I'm going to imagine. And we're going to kind of compare it to this salary right here, L5 at Google. So a senior software engineer that is realistic. Most people aren't going to work or be in a position higher than this.

So 351, let's put that down as a kind of like the highest you would make working at a big tech company, at least as an average employee.


How much YouTuber Earns

We're going to start doing the exciting stuff, which is looking at how much the average YouTuber would make. Now, I'm going to be looking at large channels with this specific spreadsheet. I've set up here. As soon as you kind of drop the number of subscribers that we punch into this spreadsheet below a hundred thousand where even, maybe let's say below 150,000 or 200,000, this is probably not going to be very accurate. So keep that in mind.

And the same thing. Once you go over about a million subscribers, this probably is not going to be very accurate as well. It's very difficult to actually estimate how much a YouTuber or content creator really makes because there's so many different ways to make money online. And a lot of the richest content creators do not make a majority of their money from the primary thing that you see them do.

They will make a lot of money from saying selling courses or from doing small things on the side, like merchandise that you wouldn't necessarily kind of know about, or you wouldn't really be able to figure out how much they're really earning from that specific source. So I'm going to try my best to give you the best estimate that I can, but keep that in mind. I'm not perfect.

And I've made a lot of assumptions that are based on how the finance and kind of business side works for my specific company and my specific YouTube channel. Anyways, let's dive in. So here, the way the spreadsheet works is you fill in these values in the YouTube or stats section, and then based on those values, it will populate these tables with the correct numbers.

Software Engineer vs YouTuber - Who Makes More?

So the numbers you see right now are not accurate at all. Some of them are just hardcoded in because it's, it just only makes sense to put them in that way. but just keep that in mind, like negative 18,000 is obviously not, you know, the corporate net income.

So let's get started here and then I'll talk about all the tables as we go through. So if you're confused by any of this, don't worry, but let's pick a channel that has say 800,000 subscribers and try to figure out how much money they would really make. So we'll put 800,000 in there. Now we have to pick the monthly views for this channel.

So if I'm looking at my channel, I get about 2.5 million views per month, and I have 500,000 subscribers. So I'm going to assume that a channel that has 800,000 subscribers if they were doing something similar to me, would probably get about 4 million views a month. So let's put in 4 million looking at average video views.

The reason this is important is to estimate how much you would make from a sponsorship. Let's say if they have 4 million views a month, they're averaging like 75,000 views of video that might be wrong. It could be lower or higher. We'll mess with this number later on.

But anyway, now let's look at monthly videos. So how many videos do we think they post a month? Personally, I post about 12 videos a month, sometimes 10, like, usually overnight a month. Let's just say that they post less frequently and they post eight a month.

How many of those videos are going to be sponsored?
Well, you could say eight. If all videos are sponsored, we could also say something like for, let's go conservative with that. And now let's look at our RPM and sponsor rate. All right? So RPM stands for revenue per mile, and this is pretty much telling you how much money you are making. Oh, by the way, all of this is in us dollars.

If I didn't state that poor per a thousand views on YouTube. So YouTube obviously pays its content creators based on the amount of ads that run on their video. And if they're in the partner program, which means you have to have a thousand subscribers, and at least I think it's like 12,000 watch time hours in the past year, anyways, revenue per mile is after this figure is after YouTube takes it's 45% cut from your gross ad revenue.

So let's say I made 20 grand in ad revenue on YouTube, my gross ad revenue. That's like what I made in total, I would only keep about 11,000 of that because YouTube takes 45% of all of the ad revenue. So this RPM value is telling you how much you are actually going to get to keep pretty much it's after YouTube takes its cut.

Anyways, the average RPM for a tech channel, something in my sector. I can't tell you what mine is, but it's something close to $3.50 to $4. So I'll put three 50 inside of there. All right. So moving on to sponsor rate this number here is how much you charge per a thousand views on a sponsored video.

Now, usually, you negotiate this number beforehand and you actually will charge a flat rate for a sponsored video, regardless of how many views it gets, but you will take this average video views and multiply it by your sponsor rate, then divided by a thousand to figure out what the actual thing is going to be.

And we'll, that will tell you how much you should charge for a sponsored video. So you'll see how it works in one second, but this number is highly dependent on what type of channel you are. So if you are a general entertainment channel, imagine you're like a gaming channel.

Then your sponsorship rate is going to be a lot lower than something like my channel would be or something like makeup or beauty or cars, anything that's more specific.

The reason for this is that the more specific or niche your channel is the easier it is to target as a marketer or as an advertiser, a specific customer, right? Like if I'm advertising something tech on my channel, chances are, you know, 95% of people that watch my video are into tech.

So I have to charge more for that because I'm actually having the advertiser target more people in tech than they would if they say got 75,000 views on some random entertainment channel. Hopefully, that makes sense. But the more niche, the more specific your audiences, which means the more you charge for sponsors because it's easier for an advertiser to target a specific customer. Hopefully, that makes sense.

But anyways, the average sponsorship rate, I, again, I can't tell you what mine is, but for a tech channel would probably be between 40 and $50. So this means you're charging about 50 bucks for a thousand views. And you can break that down, you know, per person watching the video and do the math and all of that. But anyway, I'm going to put $50 here.

So once I put all of this in, we can go over and look at the YouTube revenue. And this will tell you approximately how much a channel with these figures of these statistics would actually make. Of course, you can modify these statistics. I'll leave the sheet down below to do that. But in ad revenue, this isn't going to make about $14,000.

You can take your 4 million monthly views, multiply that by your RPM. So obviously you have to divide by a thousand, then multiply by that number. And while you get 14,000, you can see that's the calculation I'm doing right here. So that gives you a monthly revenue of 14k US and yearly revenue of $168,000.

Then we look at sponsorships, we say, okay, you're doing four sponsored videos for a month. You're averaging 75,000 views on those sponsored videos. And you're charging $50 per estimated, a thousand views.

So if they did that, they would be charging, I guess what's the math there, but $3,500 or yeah, a little bit over $3,500 per sponsored video. which sounds pretty reasonable to me. And that gives them $15,000 a month. If they do four sponsored videos a month making up $180,000 a year, a lot of money.

Software Engineer vs YouTuber - Who Makes More?


Course sales


Software Engineer vs YouTuber - Who Makes More?

So this is a number I just hard-coded that they were going to sell about a thousand dollars of courses a month. Now keep in mind, a lot of people are selling way more than this, right? You might make this number, something like $10,000 a month, or maybe at 800,000 something like $30,000 a month, depending on how much your courses. So I decided to go really conservative and just say that they're selling you a thousand dollars worth of paid courses per month, and that would give them 12 grand. 


Merchandise

I know personally for me, I don't sell very much merchandise. So I just put this at 500 bucks a month that would still give you six grand a year in merchandise sales gain. You can make that higher.

Affiliate sales


Software Engineer vs YouTuber - Who Makes More?

Now we'll leave this zero for right now because I don't really do affiliate links. And well, let's just assume this channel doesn't do it either. And then I have this other section where you could just put in some other amount you're making per month, maybe say something like donations, you know, a hundred bucks a month, right? So there you go.

That gives you $30,600 a month in gross revenue. And then that leads to $367,000 a year. So it's pretty easy when you look at this kind of breakdown and then, of course, other revenue streams you could pursue as well to see how you would make a lot of money on YouTube with a channel of a size of about 800,000.

Now, I would be willing to bet that most people that have a channel size of 800,000, if they know the business well enough, and they're like, you know, doing a lot of sponsors, maybe more than four a month are making a lot more than $367,000 a year.

But that is how much you can make with a channel like this, assuming these kind of figures and all the assumptions that I've made, of course, you could also make a lot less really depends. And this average views per video, you can see really drastically will change how much you're going to generate based on the sponsorship value you're going to get or how much you're gonna charge for a sponsorship.

Expenses


Software Engineer vs YouTuber - Who Makes More?

I don't want to spend too much time on this, but pretty much we have expenses like editing or graphic design, thumbnails, video editing, accounting fees. If you're making this kind of money, you probably paying an accountant to do your books for you. You might not, but either way, I threw that in here.

Just to give you an idea, equipment yearly is expensive about 15 grand. This is somewhat misleading because you wouldn't necessarily expense this entire amount because the equipment is technically an asset to the business.

But anyway, we'll just put that there for simplicity's sake, software subscriptions, 200 bucks a month, Adobe creative cloud stuff like that. Website hosting straightforward phone, we pay ridiculous phone bills. So mine's like a hundred bucks a month. Anyways, that's the expenses.


Corporate net income and net income


Software Engineer vs YouTuber - Who Makes More?

We're looking at corporate net income. your yearly revenue is $367,000. Your yearly expenses are 45,000. That leaves you with a net income before taxes in your corporation. Assuming you're running the business as a corporation of $321,000. Now in Canada, if we come down to net income after tax the corporate tax rate for anyone who makes less than $800,000 a year is 12 and a half percent, I might be slightly wrong on that.

It might be half a million dollars a year, but either way, the corporate tax rate for most small businesses is 12 and a half percent. If they're like very small businesses. So if we have a look at that, you can see that you're going to pay about $40,000 in corporate tax. Now, for anyone that's confused here, there's a lot of debt.


There's a big difference between how much you make in a company and how much you make personally, right?

The company could generate a million dollars, but you might only get paid from that company like 200 grand, right? You might have a ton of expenses. That means that your company at the end of the year, really only netted really only gained like 200 grand or whatever it may be.

So what I'm trying to show here is that the corporation is different from the individual. So my corporation making money is different than me making money because I have to decide as to the CEO of the corporation, how much I'm going to pay myself at the end of the year, I could pay myself the entire net income of the corporation, or I could pay myself portions of that.

Now, this has to do with tax planning and a bunch of more advanced stuff. But anyways, the corporate tax rate is 12 and a half percent. So if you have a look at this, the corporate net income after tax is about $281,000. So that would be in us dollars. I don't know what the corporate tax rate is in us. It's probably lower than it is in Canada.

It's kind of weird cause I'm using US dollars in Canadian tax brackets. But anyway, you get the idea. So corporate tax rate, 12 and a half percent, and then the personal tax rate in Canada, it's extremely high. It's actually probably higher than this. I put it at 41%.

So if you have in your corporation $281,000 and you decide to pay yourself all of that money from the corporation, you're going to pay about $115,000 in tax, at least in Ontario, where I live. And that's going to bring you after tax you about $165,000. So I just included this year for anyone who cares to know kind of how the tax works.

And this is a reason why since this personal tax rate is so high, while you may not actually pay yourself the entire amount or the, yeah, I guess the entire net income that you have in the corporation, you could theoretically pay yourself less.

You could say, invest money in the corporation. And then just over years slowly, pay yourself more money out of the corporation so that you keep your personal tax rate lower because obviously your tax rate is based on how much money you make per year.


Last words

So anyway, that gives you an idea of how much a YouTuber could generate with the channel size of 800,000. And with that, I'm going to conclude this article. So full disclosure, I am not a business expert.

A lot of you probably will think that I'm just an absolute rookie when it comes to doing this kind of stuff. And well, I would probably agree with you. This is simply the knowledge that I have. I wanted to share with you guys and give you an idea of how much money you tubers are really making.

So to draw the conclusion here, YouTubers that are running large channels can definitely make much more than they would be if they were working as a software engineer, especially considering the fact that YouTube channels grow and get larger as time goes on. So keep that in mind, but I hope you found this article insightful and informative.

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