Software engineers with AI skills now earn between 13 per cent and 25 per cent more than their peers, marking a significant shift from just a year ago when AI capabilities had little effect on compensation, according to a new industry report.

NodeFlair, a tech career platform based in Singapore, published its Tech Salary Report 2026 this week, drawing on more than 230,000 verified salary data points across roles and markets.

The findings point to a tech labour market in which AI fluency has moved from a desirable attribute to a measurable financial advantage.

“AI fluency is no longer a nice-to-have. It’s now a salary advantage,” said Ethan Ang, founder of NodeFlair. “Just a year ago, coding with large language models still felt more experimental than transformative for many teams. In 2025, that changed quickly.”

The report also reveals a widening salary gap between junior and senior engineers. Salaries for senior, lead and manager-level roles rose 10.8 per cent or more, compared with 5.3 per cent for junior positions and just 1.7 per cent for mid-level engineers.

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The divergence reflects growing demand for experienced engineers who can make architectural decisions, manage ambiguity and deploy AI tools to greater effect.

Ang said engineering leaders described AI as increasingly capable of handling execution tasks traditionally assigned to entry-level staff, e.g writing routine code faster and at lower cost. However, he noted that higher-order skills such as system design, trade-off analysis and navigating complex requirements remain areas where experienced engineers hold a clear edge.

At the top of the market, the highest-earning 10 per cent of engineers saw salary increases of up to 19 per cent, further widening the gap between top performers and the broader workforce.

What changed in 2025

NodeFlair attributed the turnaround to two converging factors: the maturation of AI coding tools into production-grade workflows, and a shift in how employers assess technical talent.

In 2024, many companies were still running pilots, and the productivity case for AI remained unclear. By 2025, tools enabling agentic coding workflows had become widely adopted, making the return on AI investment more tangible and prompting companies to price AI skills accordingly.

For early-career engineers, Ang urged embracing AI rather than treating it as a competitive threat. He noted that, on the ground, younger engineers have been quicker to adopt AI tools than their senior counterparts, and that pairing those skills with strong fundamentals in problem-solving and system design remains the most durable path to career value.

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The next wave

Looking ahead, NodeFlair expects the largest salary premiums to accrue not to those holding AI-specific job titles, but to professionals who combine domain expertise with practical AI execution — product managers who can prototype with AI, data professionals who can move AI models into production, and engineers who can work fluidly alongside AI agents.

“The biggest premiums will go to people who can combine domain expertise with AI execution,” Ang said. “Not just knowing the tools, but knowing how to apply them to create measurable business value.”

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Image Credit: NodeFlair

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