This article was written on 2017-08-31.

Executive summary

The software engineer average salary is USD 159,000 per year (according to Paysa), which is IDR 54,000,000 per month if adjusted according to OECD 2016 purchasing power parity USD 1 = IDR 4,000. According to Jobstreet, the actual Indonesian software engineer average salary is only 1/6 of that.

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OECD says that Indonesia total purchasing power parity (PPP) in 2016 is 4,091.831 IDR/USD. This roughly means that USD 1 in the USA and IDR 4,000 in Indonesia buy the same thing on average.

Paysa, based on 332,000 profiles, says that the average software engineer salary is USD 159,000 per year. Multiply that by the IDR/USD PPP factor, then divide by 12, and we find out that the Indonesian software engineer average salary, adjusted for purchasing power parity, should be IDR 54,000,000 per month. According to Jobstreet, the actual Indonesian software engineer average salary is only 1/6 of that.

Housing expenses? I can sleep at the office. Actually I did that in 2012, every night, for a year, on the carpet. I still took a bath and ate normal food, everyday, as usual. No big deal.

Taxes? For a USA citizen whose gross annual income is USD 100,000, the effective tax rate is 20%. For an Indonesian citizen whose gross annual income is IDR 650,000,000 (the PPP-adjusted equivalent of USD 100,000), the effective tax rate is 34%. Compared to the Indonesian, the American gets more purchasing power but pays less tax.

What this means is that I can earn several times what I’m earning right now, simply by moving to the USA. I don’t have to work harder. I don’t have to be smarter. I just have to move to the United States of America, and try not to die in a mass shooting or terrorist attack.

A possible reason for the pay gap

It is possible that the average American programmer is much more productive than the average Indonesian programmer. The average American programmer has better education and doesn’t have the language barrier. The average Indonesian programmer doesn’t understand English, which is the de facto language of software documentation.

(But, weren’t we talking about software engineers, not programmers?)

Other resources

Payscale says, “An entry-level Senior Software Engineer with less than 5 years of experience can expect to earn an average total compensation of $103,000 [per year] based on 2,064 salaries provided by anonymous users.”

Myjobstreet Indonesia software engineer salary list average is about 1/6 of the PPP-adjusted figure.

Unrelated notes

Earlier above OECD says that USD 1 in the USA and IDR 4,000 in Indonesia buy the same thing on average, but the exchange rate is about USD 1 = IDR 13,000. This means that American tourists visiting Indonesia, on average, can buy three times as many things in Indonesia as they can buy in the USA, simply by visiting Indonesia and exchanging currencies. This is why American tourists look so rich to Indonesians. Conversely, Indonesian tourists in America are probably very rich people by Indonesian standards, because they have to spend at least three times as much Indonesian rupiahs as the average Indonesian domestic tourist does.