For the last twenty years, the advice was pretty straightforward. If you want to make more money, get off the keyboard and start managing people. That suggestion translates to earning less now.
The number that broke the pipeline
Levels.fyi's End of Year Pay Report, which was published in January 2026, based on 2025 data, revealed that the median total compensation for a Staff Software Engineer came in at $457,000. A 7.52% increase from the previous year. How about First-line Engineering Managers? Generally speaking, they make somewhere between $150,000 and $250,000. The median of the Staff IC is higher than the upper limit of the manager band.
This isn't one weird data point
If it was just one report, I wouldn't be concerned. But it's more than one. According to HR Oasis's March 23, 2026 report, engineering managers are now being out-earned by Staff and Principal Engineers in top firms, occasionally by 15 to 25 percent. According to a report by recruiting firm KORE1's Tom Kenaley on June 22, 2026, Staff engineers are paid between $190,000 and $260,000 in base salary and total comp ranges between $350,000 and $700,000 at big tech vendors. The 2026 Algoroq.io Salary Guide shows an increase. Total comp for Staff Engineer at the top tier firms including FAANG, Stripe, OpenAI, Databricks is between $400,000 and $750,000, with a few extraordinaries above $900,000.
Base salary is a trap. Look at the equity.
Here's the part that initially threw me off. An analysis done on August 12, 2026, by Recruiting from Scratch came up with a median base salary of $248,050 for a Staff IC in New York based on 362 active US postings. It was almost the same as $240,000 for an Engineering Manager. So where does the pay gap come from? Statistics provided by Algoroq.io show stock grants representing 40% to 60% of the total compensation of a Staff IC. This is the lever companies pull the hardest on for hard-to-find experts. Basic salary may seem equivalent to tossing a coin. However, total compensation is not similar at all. The equity is what really matters, and it is mainly accumulated on the IC ladder.
Why the market flipped
Managers haven't become weaker. They have had more demands placed on their time and skills. According to SignalFire's analysis on June 22, 2026, every engineering manager at a Tech Major currently oversees about 12 engineers, which is 14% more than in 2019. For startups, it's 15 engineers per manager, 34% more. While management talent is plentiful and relatively inexpensive, technical talent faces shortages and higher costs. SignalFire put it plainly: "top-of-band staff and principal packages at the Tech Majors now rival or beat director pay, reversing the management premium that defined tech careers for two decades."
Two decades of career advice, quietly inverted. Algoroq.io goes as far as mentioning a Senior Staff Engineer is paid more than a Senior Engineering Manager in a few companies.
What this actually means for you
I have seen competent engineers opt for the position of manager, believing that was the only way to get a substantial pay raise. The main differences to consider:
→ Base is a wash, equity is the game. If a role pays comp mostly in stock, that's where the gap opens. Compare total comp, not the number on the offer letter's first line. → Rarity beats headcount. The market pays for skills few people have, not for how many reports you can absorb. → Management is a role, not a promotion. Pick it because you want the work, not because you think it's the raise. This doesn't mean that managing people is negative. It is simply work that is different and some of us have the right mindset for it. However, if you are a strong specialist and only pursuing the manager track for the money, the 2026 data is sending a warning. Steer clear, the deep technical route is now a real destination, not a booby prize.
The takeaway
Many excellent engineers were convinced to take a life-long pay cut by the "go into management for more money" pipeline. It just took a while for the data to become more powerful than the narrative. If you enjoy managing, then go for it. But don't do it for a salary increase because the Individual Contributor (IC) ladder currently pays more, after all. 💰
So, my question to you is this: if we take the money reason off the table for becoming a manager, what's left to motivate you to make that move?
