Salary Negotiation for Internships

Why students often don’t negotiate

Many students don’t even think about negotiating salary for internships or early career positions. This is understandable for the following reasons:

  • You assume the internship salary is fixed and probably not negotiable

  • You feel that you don’t have much leverage in the negotiation as a student

  • You feel that the internship is itself an extended interview for a later offer

  • You really want the internship and you are worried negotiating will cause them to rescind the offer

For this reason, the vast majority of students never even think to ask if they can negotiate a higher salary once they receive an internship offer.

Negotiating salary can be a great idea in certain cases!

Even though students rarely negotiate, you might be surprised to discover that negotiating is actually a great idea, even as an intern!

Many companies view interns like any other position they are trying to fill; they want the best talent at a reasonable price. Most companies will set an initial salary that is competitive in order to attract the applicants they want. While limited by their overall budget, almost all companies can find additional funding in a pinch to hire students they want, especially if the student already has other internship offers on the table.

If an internship is meant to be a learning opportunity, why not start learning key skills even before you start the job? Negotiating tech salaries will almost certainly be something you encounter in your career, and so getting some early practice by negotiating your internship salary is an important lesson.

What is market salary for software interns?

Generally, software interns make between $3500-9000 a month with the average being $6,800. Where you are for your internship matters. Top tech cities will often pay significantly higher on average.

The average software intern makes $6,800 a month at the median, according to some data sources, which comes out to nearly $82,000 a year on an annualized basis, and that doesn’t include the perks like housing and travel stipends that are standard at many of these companies.

But it’s a different story out in the tech industry’s heartland: Among the top companies in tech hubs, interns can earn up to $9,000 monthly median (at Pinterest). Even Tesla, which is generally at the bottom of the list, came up with a $4,500 median monthly salary for interns.

How do I know how and when to negotiate?

Follow the following five steps to know how and when to negotiate your offer:

  1. Research Tech Salaries for Interns

  2. Outline Your Living Expenses

  3. Decide If You Want to Negotiate

  4. Build and Present a Proposal

  5. Have a Plan if They Say “No”

1. Research Tech Salaries for Interns

Before you can ask for a higher salary, you need data to support how much you should be making in an internship. Researching intern salaries at the company extending the offer and other similar-sized tech companies is a critical first step. You will have much more negotiating power if the salary for your summer internship falls below average.

  1. Visit Paysa.com and run a salary search for interns at the same or similar tech company extending you the offer. For example, let’s say you receive an offer from Airbnb to join as a software engineering intern. Well, according to Paysa data, the average base salary is right around $76,000 per year. So, if an offer comes through that’s lower, you know you’re justified in at least exploring a potential bump.

  2. Do the same for other tech companies – particularly their competitors. Sticking with the Airbnb example: Now, it might be worth exploring intern salaries for other top tech companies. So, maybe you run a search on Paysa for intern tech salaries at Google

Think about what you find here, and compare the salary you were offered to other interns and similar companies in similar locations. And now you have the data you need to justify a bigger increase to your intern salary. But, that’s not the only data you’ll need, you’ll also want to outline your own expenses.

2. Outline Your Living Expenses

You’re going to want to calculate your cost-of-living expenses to demonstrate why you might need more money. Employers often neglect to consider the costs of relocation, rent, food, and other expenses when putting together a pay plan for new interns. It’s your responsibility to demonstrate exactly how much money you need to make to live comfortably in the market where the internship is based.

  1. Use the “Cost of Living” tool on PayScale to get an estimate of exactly how much it costs to cover your basic expenses in any market. For example, the average cost of living in San Francisco means having around $4,500 per month in expenses.

  2. Now compare that against market salaries in the area, let’s go back to the $76,000 per year salary offered by Airbnb example. That ends up being about $6,250 per month before taxes. So, presumably, it could be just enough to pay your bills (but not really enough to enjoy living in San Francisco).

Once you’ve gathered all the relevant data and done your research, you can decide if you want to begin negotiating or not based on the offer given.

3. Decide If You Want to Negotiate

Factor in the following to decide if you want to negotiate:

  1. Cost of living in the area for the internship

  2. How the salary they are offering compares to salaries given to other interns

  3. How the salary offered compares to other similar types of companies in the same general area

If you decide that negotiating does make sense, you should start by asking whether you have any negotiating room and explaining why you are concerned (i.e cost of living or their offer is lower than other similar companies you could work at).

Many companies do have pre-designed summer internship programs that come with a specific rate or stipend, while others may pay by the hour, week or month. Those without a particular salary already fixed to them may give you more room to bargain. However, remember that it almost never hurts to at least ask if there is negotiating room and voice your concerns based on data.

If you do ask and they ask for more information on what you were hoping to make or they want to learn more, it’s time to build and present a proposal!

4. Build and Present a Proposal

As you likely know, there’s a big difference between asking for a raise and demonstrating that you’ve been undervalued in an offer. Asking for a raise comes from a place of feeling like you deserve more. But demonstrating your value stems from facts—relevant data supports your argument and gives you reasonable negotiating power. Your skills and abilities are valuable tools when negotiating a salary. A greater level of experience means the company can spend less time on training, which will save it money and resources.

In order to present that data in an appropriate way, it’s important to build a solid proposal that clearly highlights your value and aligns it to a reasonable bump to your offer. So what should you include in your proposal? Consider including any (or all) of the following:

  • Relevant salary data

  • Relevant cost-of-living data

  • Reference letters from professors who can attest to the quality of your work

  • Reference letters from past or current employers who can attest to your work ethic

  • A portfolio of college projects and extracurricular work

  • Your proposed offer increase

Once you’ve gathered all that information, it’s time to actually present the proposal to the internship manager. This may be done by email or telephone or in person. Practice your arguments before the meeting so you can speak with confidence. Present your research data and calmly explain why you think you deserve a specific salary.

Of course, negotiating an increase can be quite nerve-wracking. But if you follow these tips, you’ll come across as reasonable and professional in your request:

  1. Be confident. If you’ve really done your homework and know you’re deserving of a higher tech salary, then you should have no problem presenting the proposal with conviction. Assume that the manager made a mistake and simply doesn’t realize what the appropriate rate for an internship salary should be, rather than believing he or she intentionally low-balled you. It’s your job to bring that mistake to light and get it corrected.

  2. Practice before presenting. One of the easiest ways to beat nervousness in the interview is to simply rehearse your proposal ahead of time. Sit down with someone you respect (and maybe even fear a bit—a trusted professor works great) and present the proposal as if they were the manager.

  3. Anticipate follow-up questions. Unexpected questions will undoubtedly throw you off during your presentation, so spend some time thinking about every possible question your manager may have for you during the proposal so you can prepare responses ahead of time.

  4. Compromise when necessary. Demanding a specific amount of money for two to three months of work will likely work against you. Be flexible and allow the employer to make a counter-offer and settle on a fair amount of compensation.

5. Have a Plan if They Say “No”

The truth is, you may be fully justified in asking for a higher salary, but your hiring manager may still simply say “no.” In which case, you have a tough decision to make: Do I stick it out for the sake of the opportunity? Or do I reject the offer? There’s no right answer here—it’s totally up to you and dependent on your specific circumstances.

However, remember that if they do say no to the increase, they are very unlikely to rescind your offer for asking! This almost never happens if you ask professionally and respectfully! Even if they do decline, there is no issue with still accepting the offer at the original rate. And they may even throw in a small end of summer bonus to cover living expenses!

On Your Professional Leverage

Don’t undersell yourself here. If you are a competent in technical areas, you have a lot more leverage than you might think. This increases significantly if you can prove it (strong portfolio, previous work experiences, good interviewing skills, good project work, good GPA, etc).

Most highly talented people are on the job market a short while. After they are employed, it’s normally their terms they seek employment. So a company looking to hire them wants to get them into their system as early as possible. Internships are really good for this. If you work to make sure you are a desired candidate, you have a lot more leverage than you may give yourself credit for.

Additional Considerations

Here are a few additional considerations and notes:

  1. Some companies may be highly bureaucratic and not want to “unfairly” compensate interns at different wage levels. In this case, they likely will not hold it against you that you asked for a higher salary but they may not provide one either. This is more likely at larger companies for whom being flexible isn’t worth it.

  2. If you negotiate the right way it will almost never be held against you. In fact a lot of companies will see this as a strength, and so even if they do not have the budget to afford the increase you are asking for they will see you as a more professional and desirable candidate.

  3. Negotiation is usually more effective when done over the phone. However, you should choose email or phone depending on which you are more comfortable with. If you have an offer and you’d like to ask for a higher offer, tell the employer you had some follow-up questions you wanted to go over on a call.

  4. Explain your Reasoning. It helps a ton to have another offer to base your request off of. “You offered me X. I really like your role. Another company I am also interested in offered me Y. I’d really like to work for you all as I think it is a better culture fit, is there any way you could also offer me Y?” Expect to either get Y back, something between X and Y or an apology as to why no increase can be made.

  5. Backfiring is Rare. The odds of this backfiring are very slim but it could happen. There is little reason for a company to not at least allow you to accept their original offer. The only instance where this is not the case, is if the common has a culture built on a high degree of respect, and it was expressed to you that the salary is incredibly high and non-negotiable. In this rare instance, in can be construed as disrespectful not to accept an offer as is. The other outlier scenario is that an employer receives a better candidate or another acceptance in the time from when you are negotiating to when you sign the current offer. In this case they could rescind the offer as well. Both cases are extremely rare but not unheard of.

  6. Startups are highly like to negotiate. They have very few rules and care tremendously about talent. SMBs are also flexible when negotiating but may be more cash strapped then other companies. Big companies are the most likely to have budget and many will be highly concerned that you might accept a role at a competitor, but some do have internal restrictions on intern salary.

  7. Try to enjoy your negotiation! It is a great skill to have and learn early. Don’t negotiate just for the sake of it, but if you feel like you deserve a higher salary than this is always worth doing.

Additional Resources

If you receive a job offer, many engineers choose not to negotiate their offer. It’s up to every individual but for those comfortable with being upfront the vast majority of companies are more than happy to negotiate with candidates during the offer process. Review these articles for more information:

If you’ve done your research on market salaries and equity and the offer comes up short, negotiations are a great way to ensure you receive a compensation package that you feel is fair.

References