Remote vs. On-site: What Pays More?

Location-Agnostic (Same Pay Everywhere):

- Examples: GitLab, Basecamp, Zapier - ~15% of tech companies - Typically use SF or NYC rates as baseline - Philosophy: Pay for value, not location

Location-Based Tiers:

- Examples: Google, Meta, Stripe - ~60% of tech companies - Multiple pay bands by geographic zone - Typically 10-30% difference between tiers

Fully Location-Adjusted:

- Examples: Buffer (transparent formula) - ~25% of tech companies - Pay adjusted to local cost of living - Can be 40-50% difference between locations

Software Engineers (Senior Level):

ML/AI Engineers (Senior Level):

Key finding:

Remote roles pay ~10-20% less in base salary than equivalent on-site positions at the same company, but the gap in total compensation can be larger due to reduced equity grants.

San Francisco:

- 1-bedroom apartment: $3,200/month - State income tax: 9.3-12.3% - Overall COL index: 180 (vs. 100 national average)

Austin:

- 1-bedroom apartment: $1,800/month - State income tax: 0% - Overall COL index: 105

Remote (median US location):

- 1-bedroom apartment: $1,400/month - State income tax: ~5% average - Overall COL index: 95

On-site SF:

- Total comp: $420,000 - After CA state tax: ~$355,000 - After SF housing ($38k/year): ~$317,000 - Purchasing power index: 176 (= 317k / 1.8)

Remote from Austin (tier 2 pay):

- Total comp: $330,000 - After TX state tax: ~$300,000 (no state tax) - After Austin housing ($22k/year): ~$278,000 - Purchasing power index: 265 (= 278k / 1.05)

Remote from low-cost city (tier 3 pay):

- Total comp: $290,000 - After state tax (5%): ~$266,000 - After housing ($17k/year): ~$249,000 - Purchasing power index: 262 (= 249k / 0.95)

Insight:

Despite earning $130,000 less in total comp, the remote worker in Austin has 50% more purchasing power than the SF on-site worker.

GitLab:

- Same pay regardless of location - Uses SF benchmark for all roles - Transparent compensation calculator - Strong remote-first culture

Basecamp:

- Same pay for all US employees - 10% more for those in certain high-cost cities - Focus on sustainable work-life balance - Smaller total comp but strong benefits

Zapier:

- Location-agnostic for US employees - Uses 75th percentile of SF rates - Generous PTO and benefits - Strong remote culture

Google:

- 3-4 pay tiers based on location - Tier 1: SF, NYC, Seattle - Tier 2: Austin, Denver, DC - Tier 3: Smaller metros - Remote: Based on home location tier

Meta:

- Similar tiered approach to Google - Some roles require occasional office visits - Remote policy evolving

Stripe:

- Historically location-based - Moving toward more remote flexibility - Competitive equity packages

Buffer (transparent formula):

- Base salary varies by role level - Multiplied by cost of living factor - Publicly published salaries - Very transparent approach

Automattic:

- Distributed company (WordPress) - Competitive global salaries - Location factored in - Strong remote culture since founding

Best for on-site:

1. Early career (faster learning, networking) 2. Roles requiring physical presence (hardware, labs) 3. When company culture is strong in-office 4. When equity grants are significantly higher on-site

On-site advantages:

- Faster promotion and visibility - Stronger relationships with leadership - Serendipitous learning opportunities - Sometimes higher equity grants

Best for remote:

1. Living in lower cost-of-living area 2. When family/lifestyle needs flexibility 3. Mid-senior level with established skills 4. Roles at remote-first companies

Remote advantages:

- Geographic arbitrage (high pay, low cost) - Flexibility and work-life balance - No commute time or costs - Broader job market access

How it works:

- Get remote job at company with good remote pay - Live in low-cost area - Maximize purchasing power difference

Best for:

- Those without ties to expensive cities - Workers with established skills (mid-senior) - People prioritizing wealth accumulation

Example:

Remote senior engineer earning $200k living in Nashville (COL 85) vs. SF on-site earning $280k (COL 180) has ~40% more purchasing power despite lower nominal salary.

How it works:

- Move to SF/NYC/Seattle - Maximize total compensation - Build wealth through equity - Potentially relocate later with remote role

Best for:

- Early career professionals - Those seeking fastest career growth - People comfortable with high COL - Those betting on equity upside

How it works:

- Find companies with good hybrid flexibility - Live in commutable but lower-cost area - Get full on-site compensation - Commute only 2-3 days per week

Best for:

- Those wanting best of both worlds - People with families in suburbs - Those valuing in-person collaboration - Mid-level professionals

More standardized remote pay:

- Companies developing clearer remote compensation philosophies - Pressure toward location-agnostic pay - Competition for remote talent increasing pay

Widening on-site premium for some roles:

- AI/ML roles increasingly requiring on-site work - Some companies bringing workers back - Premium may increase for desirable on-site roles

Global remote talent:

- Companies hiring internationally - Significant pay differences by country - More competition from lower-cost regions

For maximizing nominal compensation:

On-site in SF/NYC wins, especially at senior levels where equity is significant.

For maximizing purchasing power:

Remote work in a low-cost area often wins, sometimes dramatically.

For maximizing career growth:

On-site likely wins early career, but matters less as you become senior.

For maximizing life quality:

This is personal—factor in commute time, flexibility, and what matters to you.