The trimodal nature of tech salaries in Spain: how compensation works in the tech sector

In Spain, a software engineer can earn €35,000… or €130,000. They might work in a small city office for a traditional company or from home for a multinational based in Silicon Valley. They might have a stable, predictable salary or a compensation package with equity whose value depends on whether their startup goes public. This huge disparity isn’t random; it reflects the multifactorial nature of tech salaries.

Gergely Orosz, former Engineering Manager at Uber (previously at Skyscanner and Skype) and author of The Pragmatic Engineer, writes about what he calls the trimodal nature of tech compensation (dividing companies into three tiers or categories). In several of his articles, he documents how salaries in tech cluster into three “leagues” or levels, each with its own characteristics, expectations, and salary caps.

Although his research focuses on markets like the U.S., the U.K., or India, it applies surprisingly well to Spain, because the software market is global.

This article adapts and expands on that framework, focusing on the Spanish tech job market.
I recommend reading the original to better understand the U.S./U.K. market:

This piece draws from public data, reports by Manfred, Glassdoor, Levels.fyi, sueldos.dev, and interviews with professionals in the field. We’ll analyse what defines each tier of company, how much they pay, and how to move between levels,  because understanding where you are (and where you could be) is key to making informed career decisions and understanding the market.

What Is the Trimodal Salary Structure?

The idea behind the trimodal model is simple: there’s no single salary distribution for technical professionals.

Instead of a bell curve clustering all engineers around an average salary, what we see in mature markets (and increasingly in Spain) are three overlapping curves,  corresponding to three groups of companies:

Tier 1: Traditional companies, local SMEs, consultancies, and non-digital corporations.
Examples: Mercadona, Indra, Telefónica, BBVA.

Tier 2: Startups with their own digital products, national and international scaleups in growth phase.
Examples: Cabify, Factorial, Wallapop.

Tier 3: Big Tech, well-funded global scaleups, and tech hedge funds.
Examples: GitHub, Docker, RevenueCat, Amazon, Ryanair.

Each group competes in a different market, has its own salary and compensation philosophy, and looks for profiles with varying degrees of autonomy, specialisation, and projection.

As a result, two people with the same title (“Senior Backend Engineer”) can have radically different working conditions,  with salaries differing by over €100,000.

This phenomenon isn’t unique to Spain, but it’s amplified here due to the coexistence of traditional salary structures (deeply rooted in our corporate fabric) and the growing internationalisation of tech talent.

he Landscape in Spain: Analysis of the Three Levels

Tier 1: Traditional Companies, Consultancies, and Local Firms

This tier includes most Spanish companies that hire tech professionals, but whose core business doesn’t revolve around technology or digital products (understood as SaaS).

We’re talking about banks, telcos, insurance firms, industrial and service companies (many with in-house IT departments). It also includes generalist consultancies, outsourcing firms, and digital SMEs.

This is where most Spanish developers work.

Characteristics:

• Traditional hiring, fixed salaries, and rigid hierarchies. Career paths with many steps (some consultancies have up to 17 levels) or none at all in smaller firms.
  
• Little to no equity or performance-based pay.
  
• Simple hiring processes (often just an HR and a technical interview).
  
• Legacy projects, limited engineering best practices (generally speaking), although there’s been notable progress in recent years.
  

Salary Data (Senior profile):

• Median: €40,000
  
• 75th percentile: €50,000
  
• 90th percentile: €60,000
  

Real examples:

• A senior developer in a mid-sized consultancy in Madrid may earn between €38,000 and €42,000, without bonus or equity. Outliers exist, but few seniors in consulting exceed €50–55K.
  
• In the IT department of a national insurance company, a 7-year profile might reach €50,000.
  

Pros and cons:
✅ Stability, reasonable hours, less stress from funding rounds or feature pressure, lower entry barriers.
❌ No proprietary product or tech-driven mission, outdated tech stack, limited growth, and salary ceilings.

Tier 2: National Scaleups and Growing Startups

Here we find mainly product companies,  often post–Series A or B, with a consolidated tech team, competing for talent nationally or across Europe.

Many focus on SaaS, fintech, healthtech, or marketplaces. You’ve probably heard of some: Glovo, Factorial, Typeform, Eventbrite, Travelperk, Cabify (some are already halfway into Tier 3). But there are thousands more, less famous but equally relevant.

Characteristics:

• Stronger focus on engineering culture, product, and autonomy.
  
• Equity (options or phantom shares) is more common.
  
• Salaries above the national tech average,  VC funding and international business make it possible.
  
• More demanding hiring processes: deep technical interviews, code tests, and culture fit validation.
  

Salary Data (Senior profile):

• Median: €60,000
  
• 75th percentile: €75,000
  
• 90th percentile: €90,000
  

Real examples:

• A backend engineer in a Barcelona-based Series A startup might earn €63,000 gross + phantom shares.
  
• In a SaaS scaleup like Factorial or Genially, a Staff Engineer could reach €80,000–85,000 + equity.
  

Pros and cons:
✅ Autonomy, modern stack, real opportunities for internal growth.
❌ Fast-paced environment, delivery pressure, uncertainty about company's future (funding, IPO, M&A), risky equity.

Tier 3: Big Tech and Global Scaleups

This tier is small in both the number of companies and employees, but offers the highest compensation.

It includes companies like Google, Amazon, Meta, or Microsoft (GitHub included) with a presence in Spain (onsite or remote), as well as scaleups such as Stripe, Datadog, Docker, Snowflake, etc.

Characteristics:

• Complex compensation structures: base salary + bonus + RSUs (Restricted Stock Units).
  
• Global, multicultural engineering teams. You work in English with colleagues from the U.S., India, Switzerland, Turkey, etc.
  
• Intense hiring processes (5–8 rounds, leadership interviews, bar raisers…).
  
• High-performance culture and strong ownership expectations.
  

Salary Data (Senior profile):

• Median: €90,000
  
• 75th percentile: €110,000
  
• 90th percentile: €130,000
  

Base salary. Variable pay and stock vary widely by company.

Real examples:

• A Senior Engineer at Google Madrid might start at ~€95,000 + 15% bonus + RSUs worth €30–40K/year.
  
• A remote engineer at Datadog might earn €100,000 base + bonus and stock options.
  

Pros and cons:
✅ Highly competitive compensation, top technical environment, global talent network.
❌ Mandatory English, complex entry barriers (multi-stage interviews), strong competition to get in.

Where Are You? How to Identify Your Tier

These questions can help you locate yourself, although your salary will usually give you the clearest clue.

• Does your company live off its digital product, provide services (consulting), or use software as support (banking, telecom, insurance, logistics, etc.)?
  
• Are your company’s clients national or international?
  
• Could your company’s senior talent be hired by Google?
  
• Are there annual salary reviews or rigid structures with people stuck for years complaining about raises?
  
• Are there incentives beyond base pay,  performance bonuses and stock options?
  

You can also compare your conditions using benchmarks like Manfred Salary Compass, which includes over 120,000 profiles (note: it doesn’t include bonus or equity data).

Or check the Tech Career Report, with data on salaries by role, tech stack, and experience.

Beyond Salary: Bonus, Equity, and Perks

Total Compensation (TC) includes more than base pay:

• Bonus: More frequent in Tier 3 (international corporations). For example, Amazon usually offers 10–15% annually.
  
• Equity: Common in Tier 2 (startup/scaleup) but often phantom or illiquid until IPO or acquisition. In Tier 3, stock has real value and defined vesting schedules (e.g. first batch after 12 months, second after 18, etc.).
  
• Perks: Health insurance, training budget, free office meals, equipment of choice, team-building trips…
  

If you’re lost with equity, stock, vesting, and all that jargon, here’s a guide to understand compensation plans properly.

Comparative Example:

• Spanish startup: €65K base + phantom equity valued symbolically at €20K.
  
• Google: €95K base + €10K bonus + €35K in liquid RSUs.
  

The Impact of Remote Work and Location

Remote work has redefined access to Tier 3 roles from mid-sized or smaller cities. But it’s also true that many Tier 3 companies have scaled back remote work and returned to offices in the past two years. Still:

• Companies like GitHub, Shopify, or Deel hire remotely from Spain with international-level salaries.
  
• The rise of hubs in Valencia, Málaga, or Galicia allows professionals to enjoy a great quality of life while accessing better-paid opportunities. (This is the secret of a good life, babe! But don’t tell anyone.)
  
• However, many international companies adjust pay to the cost of living (location-based compensation), reducing the real differential if you’re based in Spain. GitHub, for example, does this,  but their salaries in Spain still exceed the 90th percentile of national firms.
  

Culture, Pace, and Emotional Impact

• Tier 1 tends to have a predictable rhythm but limited technical stimulation (often legacy tech, poor engineering culture, high technical debt).
  
• Tier 2 is adrenaline: fast changes, constant decisions, continuous learning. Sometimes you need to pivot; a clear example is the AI boom that absorbed most VC funding. Many startups that weren’t yet profitable in 2024–25 have collapsed or reinvented themselves.
  
• Tier 3 offers resources but demands autonomy and results, with constant pressure.
  

Conclusions

There’s no “better” tier,  only different career paths.

• If you value security and work-life balance, Tier 1 might be ideal.
  If you seek fast growth and high impact, Tiers 2 and 3 are your arena.
  
• Moving up a tier requires strategy: learn English, practice interviews, build your personal brand and learn to negotiate.
  
• In Spain, the number of Tier 2 and 3 roles is smaller than in other countries. The startup and corporate ecosystems are growing, but still limited.
  
• In these higher tiers, work-life balance tends to suffer; they demand dedication, ownership, and energy to stay current with best practices and new technologies.
  
• Transparency is key. Share and check salaries. Talk to peers. Don’t make decisions in the dark.

Unsolicited advice: compare yourself realistically and don’t beat yourself up. Know the market. Choose your path. Go all in. But remember: out there, some people make big sacrifices to be where they are, and others are simply smarter than us. Go all in, but don’t feel lesser just because your salary is smaller.

This isn’t a perfect model; you could subdivide each tier further and add more salary granularity. But it’s a useful framework, wherever you are in your career.

Understanding this is the first step to navigating your career intentionally and making good decisions.

Audentes fortuna iuvat!