Customer satisfaction and good customer service are at the core of Amazon’s approach to building new products. It’s these principles that help Amazon nurture innovation through its teams of software engineers. You may be wondering what an Amazon software engineer salary might look like. One thing is for sure, a job at Amazon will not let you down in terms of compensation.
In this guide, we’re going to discuss the average Amazon software engineer salary. We’ll provide salary estimates for Amazon engineers and discuss benefit packages as well as pay scales.
Amazon Salary Levels
Big companies, especially in the technology industry, often use a tier-based salary structure. Amazon is no different. This means your compensation will be based more on the seniority of your position rather than on a case-by-case basis.
If you work at Amazon, the level at which you work within the business will determine your compensation.
Before we talk about how much Amazon software engineers earn, let’s discuss the different salary tiers for software engineers at Amazon. There are six main job titles in Amazon’s compensation hierarchy, which are as follows:
- Software Development Engineer I (L4)
- Software Development Engineer II (L5)
- Software Development Engineer (SDE) III (L6)
- Principal SDE (L7)
- Senior Software Engineer (Principal) (L8)
- Distinguished SDE (L10)
As expected, most engineers at Amazon work within the lower levels of this scale, and top team members reach L7 or above. You’ll have to work for the company for a number of years to reach those levels. Let’s explore detailed salary information for positions at Amazon.
Amazon Software Engineer Salary: How Much Can You Earn?
There is no one answer to this question because the average compensation you’ll earn will depend on your tier at Amazon.
When you start, you will earn a lower level of compensation on account of your junior status within the company. It’s only when you start to earn promotions that you’ll be able to unlock salaries on the higher end of the scale. The exception is if you apply for a more senior role within the company. In that case, they will offer you a salary commensurate with your experience.
Amazon is a top technology company in terms of compensation. Even at the lower levels, you’ll still command an impressive salary. When you look further up the chain, you’ll see Amazon employees earn impressive salaries. Here is a table containing the average salaries offered at each Amazon salary tier:
|Level Name||Total||Base||Bonus||Stock (/yr)|
Data points collected from Levels.fyi.
With these average pay statistics in mind, it’s clear software engineers earn impressive salaries at Amazon at any level. Data could not be sourced for the higher levels within Amazon on account of how few people command those positions. But if the above data is anything to go by, you can earn more if you advance to an L8 or higher position.
There are a few terms you’ll need to understand to evaluate this compensation package, which are:
- Base Compensation: The standard annual salary you will earn.
- Bonus: The bonuses awarded to you on an annual basis, which can vary between employees.
- Stock: Stock options that vest over a particular schedule, as we’ll discuss in the next section.
Amazon Software Engineer Stock Options
As a software engineer at Amazon, you are entitled to earn Restricted Stock Units (RSUs). Big companies like Amazon and Google use these to compensate their employees through company shares and offer them in addition to your salary.
RSUs at Amazon are subject to a four-year vesting schedule. This means that you’ll need to wait four years until you earn all the options you are eligible for. In your first year, five percent of your stock will vest. 15 percent of your stock will vest in year two of working at Amazon. And 40 percent will vest in each of the third and fourth years you work at the company.
In other words, you’ll need to work at Amazon for a number of years before your options become stock that you can cash in.
Benefits of Working at Amazon
In your research of big Seattle tech companies, you’ve probably noticed this trend: they don’t typically just offer monetary compensation to their employees. The same is true for Amazon. As a software engineer at Amazon, you’ll receive a number of employee benefits.
One of the unique benefits offered to Amazon employees is the workplace’s culture toward pets. The company is known for being a dog-friendly workplace. So, if you want to bring your dog to work for a day or two, it should be no problem.
There’s also a number of standard benefits you will earn at Amazon, which are similar to that of other companies. These include vision insurance, health insurance and dental insurance. To help you get a better idea of what benefits you’ll be offered at Amazon, let’s break down the main Amazon software engineer benefits.
Insurance and Wellness Benefits
|Vision, Dental and Health Insurance|
|Free Drinks and Snacks||Free bananas and some teams have a snack budget.|
|Maternity Leave||10 weeks. 4 weeks of paid leave is granted before a child is born.|
|Health Savings Account||Amazon contributes $1,000 per year.|
|Paid Time Off||16 days to start. Increases to 21 days after working at Amazon for a year and 26 days after working at Amazon for six years.|
|Paternity Leave||6 weeks. Only awarded to employees with one year of tenure.|
|Life Insurance||2x your base salary up to $500,000|
|Regional Transit System||Amazon will compensate you for the use of your regional transit system.|
Home, Financial and Other Benefits
|Relocation Bonus||$10,000 for relocation|
|Phone Bill Reimbursement|
|Employee Discount||10 percent off up to $1,000 of purchases.|
|Roth 401(k) and Mega Backdoor Roth IRA|
|401(k)||Amazon will match 50 percent on the first 4 percent of your base salary. Match vests only after working for three years at Amazon.|
Evaluating these tables makes one thing clear: there’s a lot of benefit to working at Amazon beyond money. The company is known for its positive work culture. And to fully appreciate your compensation if working for Amazon, you must also consider the above benefits.
Amazon vs Other Technology Companies
Another way to evaluate your potential Amazon compensation package is to compare it with other big technology companies. The below table includes a few comparisons between Amazon and other top tech companies.
|Amazon vs Google Salary||Entry-level||$151,000||$180,000|
|Amazon vs Google Salary||Second level||$207,000||$256,000|
|Amazon vs Google Salary||Third level||$305,000||$343,000|
|Amazon vs Microsoft Salary||Entry-level||$151,000||$162,000|
|Amazon vs Microsoft Salary||Second level||$207,000||$176,000|
|Amazon vs Microsoft Salary||Third level||$305,000||$221,000|
Amazon has one of the most favorable compensation packages among big technology companies. As an entry-level tech employee, you can expect to earn $151,000 per year. This number increases significantly as you work your way up the ranks.
Not all your compensation is issued through a salary. You’ll need to work for the company for a few years to see your stock options convert into stock that you can sell. And there’s more to working at Amazon than just the salary. Amazon software engineers receive benefits like a favorable employee discount, a 401(k) with matching benefits, a Health Savings Account and a transport allowance. If you’re seeking to work at a big tech company, Amazon is definitely one to consider.