Amazon Software Engineer Compensation Guide

May 16, 2022

5 Min Read

Amazon’s strategy for developing new items is based on consumer pleasure and outstanding customer service. These principles enable Amazon to foster innovation via its software engineering teams. You may be wondering how much an Amazon software engineer makes. One thing is sure: a job at Amazon will not disappoint you in terms of compensation.

The typical Amazon software engineer salaries will be discussed in this article. We’ll cover Amazon engineer salary ranges, benefit packages, and pay scales.

Amazon Salary Levels

Tier-based wage structures are common in large companies, particularly in the technology sector. Amazon is no exception. It implies that your compensation will be determined by your position’s seniority rather than a case-by-case basis.

If you work for Amazon, your compensation is determined by your position within the company.

Let’s speak about the various salary categories for Amazon software engineers before discussing how much they make. In Amazon’s compensation system, there are six key job titles:

  • 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)

Most Amazon engineers operate at the lower levels of this scale, with elite team members reaching L7 or above. You’ll need to work for the company for many years to attain such ranks. Let’s take a closer look at Amazon’s salary data.

How Much Can an Amazon Software Engineer Earn?

Because the typical compensation you’ll receive depends on your Amazon tier, there is no one-size-fits-all response to this issue.

Because of your junior rank within the company, you will start with a lesser level of compensation. You won’t be able to access higher-paying positions until you begin earning promotions. If you apply for a more senior job inside the company, this is the exception. They will pay you a wage consistent with your expertise in such a situation.

In terms of compensation, Amazon is a leading technological company. You’ll earn a good living even at the lesser levels. Amazon workers get excellent pay as you go up the food chain. The average salaries for each Amazon pay category are shown in the table below:

Level  Base Yearly Stock Bonus Total
L7 $157,000 $297,000 $35,000 $490,000
L6 $155,000 $137,000 $11,000 $304,000
L5 $140,000 $53,000 $13,000 $207,000
L4 $114,000 $16,000 $20,000 $151,000

Source: Levels.fyi

With these figures, it’s clear that software engineers at Amazon make significant compensation at all levels. Because there are so few individuals in higher positions at Amazon, there is not enough data. However, you can earn more if you rise to an L8 or higher level based on the facts above.

To evaluate this compensation package, you’ll need to know the following terms:

  • Base Salary (your expected annual salary)
  • Bonus (annual bonuses, which vary for every employee)
  • Stocks (stock options that vest over time, as discussed below)

Stock Options for Amazon Software Engineers

As an Amazon software engineer, you can earn Restricted Stock Units (PSUs). Large companies like Amazon and Google utilize these to pay their staff by offering company shares in addition to a wage.

Amazon’s RSUs have a four-year vesting period. This implies you’ll have to wait four years to acquire all of your selections. Five percent of your stock will vest in your first year. In your second year of employment at Amazon, 15% of your store will vest. In addition, 40% of your salary will award in your third and fourth years with the company.

In other words, you’ll need to work at Amazon for many years before your stock options become shares that you can sell.

Work at Amazon Has Its Benefits

You’ve seen this tendency in your analysis of big Seattle tech companies: they don’t usually merely pay their staff with compensation. Amazon is in the same boat. You’ll get a lot of benefits as an Amazon software engineer.

The workplace’s attitude toward dogs is one of the unique bonuses provided to Amazon workers. The workplace is recognized for being dog-friendly. So, bringing your dog to work for a day or two shouldn’t be an issue.

You will also get a variety of regular perks at Amazon, comparable to those other companies offer. These include vision, health, and dental insurance. Let’s break down the primary Amazon software engineer benefits to give you a clearer picture of what you’ll receive.

Insurance and Health Benefits

Benefit Description
Free Drinks and Snacks Some teams have snack budgets and get free bananas.
Maternity Leave Ten weeks. Before the birth of a child, four weeks of paid leave are granted.
Account for Health Savings Amazon makes a yearly contribution of $1,000.
Paid Leave Start in 16 days. Increases to 21 days after a year at Amazon and 26 days after six years.
Leave of Absence Six weeks. Only employees with one year of employment are qualified.
Life Insurance Two times your starting salary up to $500,000
Insurance for vision, dental, and health
Insurance for Pets

Transportation Benefits

Benefit Description
Regional Transit System Amazon will compensate you for using your regional transportation system.
Transport Allowance
Company Shuttle

Other Home and Financial Benefits

Benefit Name Description
Employee Discount Ten percent off up to $1,000 of purchases.
Relocation Bonus $10,000 for relocation
401(k) Amazon will match 50% of the first 4% of your basic pay. After three years at Amazon, We were finally able to check vests.
Roth 401(k) and Mega Backdoor Roth IRA
Phone Bill Reimbursement
Immigration Assistance
Adoption Assistance

Working at Amazon has a lot of benefits beyond money, as these charts demonstrate. The company is noted for its pleasant working environment. You must also include the above benefits when calculating your compensation if you work for Amazon.

Amazon vs. Other Tech companies

Comparing your possible Amazon compensation package to other large technology companies is another method to assess it. Amazon and other leading tech companies are compared in the table below.

Salary Comparison Level Amazon Comparison Company
Amazon vs Microsoft  Entry-level $151,000 $162,000
Amazon vs Microsoft  Second level $207,000 $176,000
Amazon vs Microsoft  Third level $305,000 $221,000
Amazon vs Google  Entry-level $151,000 $180,000
Amazon vs Google  Second level $207,000 $256,000
Amazon vs Google  Third level $305,000 $343,000

Conclusion

Amazon boasts one of the most attractive compensation packages among large technological companies. You can make $151,000 per year in an entry-level Information systems job. As you go through the rankings, this number rises considerably.

A paycheck isn’t the only way you get paid. To convert your stock options into shares that you can sell, you’ll need to work for the company for a few years. Working at Amazon is about more than simply the pay. A favorable employee discount, a 401(k) with matching benefits, a Health Savings Account, and a transportation allowance are all available to Amazon software engineers. If you want to work for a large tech company, Amazon is an incredible option.

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