Do software engineering students at IITs really get a package of 2 crores ($300,000) from Facebook, Google?
We often read in newspapers that the students from the elite IITs have been offered a job package of Rs.2 crores ($300,000) during campus placement. Is there any truth in that? Through this article, we sift through various sources like Quora, Reddit, etc. to see whether tech behemoths like Facebook, Google, Oracle, etc. really offer such extravagant salary packages to students during campus placement from the elite Indian engineering institutions called IITs.
First of all, not all students are offered such awesome salary package. Those actually offered such $300,000 per year package are the cream of the crop and are in the top 100 students from IIT from a total 30,000 odd who pass out every year. For the rest of the IIT grads, the average on-campus job placement offer is much less. Neha Singh who has passed out of IIT, Roorkee says on Quora that the median salary offered by the tech companies is anywhere between Rs.10 lakhs ($15,000) to Rs.20 Lakhs ($30,000).
Another student from IIT, Madras says that the whole Rs.2.00 crore news is a myth. “I am from IIT Madras and even students at IIT’s are amazed after knowing about 2 crore wala viral news because the number may sum up more than half the IITians packages in that placement season,” he says.
Another Quora user gives a perfect answer to the whole Rs.2 crore placement offer for IIT elite students. Rounak Banik says that given the rate of conversation, the Rs.2 crore package is not a big deal because, after the placement, the IIT student is expected to locate to the United States.
Rounak says that the Rs.2 crore job offer is a mediocre one considering how much western counterparts with similar skill sets earn. He says that considering most of the tech firms are situated in areas like San Fransisco, the Rs.2 crore offer seems puny considering the high cost of living.
Here is Rounak’s justification for the $300,000 per year on-campus placement package given to IIT students :
Entry level software engineers to these companies are usually paid around $100,000 dollars an annum (which is 60 lacs). The ‘2 crore package’ news that you see is nothing but a hyperinflation, taking stock bonuses, joining bonus and relocation bonus all into one.
With $100,000 in a place like San Francisco, you’ll struggle to make ends meet if you go in with a mindset of living the extravagant life. Out of the $100k, around $35–40k will go as taxes. That leaves you with around $60k.
SF Bay Area has one of the highest rent rates in the world. Even to rent a hut, you’ll have to shell out at least $20k a year. A decent house with all basic amenities will cost you around $30k. And forget about getting a new house. The minimum salary that can sustain the mortgage payments for the cheapest of houses in SF is $170,000; which is 70% more than what you earn. It’ll take you at least 5 years to command that kind of salary.
So, you’re left with $30k now. Labor is insanely costly in the United States. You’ll be paying people between $10 and $15 an hour for tasks such as plumbing, carpentering, mowing the lawn etc. There is no way you could afford a maid or a domestic worker with that kind of salary so expect to do all the cooking, cleaning and laundry yourself.
Even if you live on a frugal diet and spend very little on third party labor, the maximum you’ll end up saving is $2–3k. And if you’re the kind of person who likes spending the weekends out partying, then you won’t be left with even that. No wonder the Americans have close to zero lifetime savings.
So, if you think getting a job at one of these MNCs will make you rich beyond imagination, think again. It is only the beginning of your career. Don’t have unrealistic expectations about the kind of wealth you can accumulate at such a young age. Getting into these companies directly after college is, no doubt, a fantastic achievement but it’ll still take years before you can walk into any restaurant and order wine without gasping at the price tag.
Seems like the $300,000 package is indeed a reality for many elite students who pass out with distinction from various IITs in India. If you are an average student, the pay package offered will be somewhere in the range of $30,000 to $50,000 a year. Still, considering the fact that such skill sets command only about $10,000 per year in India, the students are after all right in taking these offers.