If you are a software engineer, software developer, or coding engineer looking at a career in software development, you’re probably interested in what the top tech companies are paying. Today we’ll explore the compensation software developers receive at one of the most renowned FAANG companies in the world – Amazon.
Growing from an online bookstore to an “everything” store that puts its customers first, Amazon is constantly evolving and innovating through its teams of software engineers. Additionally, the tech roles at Amazon are also constantly progressing to match new markets and skill requirements.
In this article, we’ll look at the various software developer roles in Amazon and their respective pay averages. These are the topics we’ve covered:
- Amazon Software Development Engineer Levels
- Amazon Senior Software Development Engineer Salary
- Amazon Software Development Engineer Stock Options
- Benefits of Working at Amazon as a Software Development Engineer
- Amazon Software Development Engineer Salaries Based on the Location
- Amazon vs. Other Companies Software Development Engineer Salary Comparison
- How to Negotiate Salary at Amazon
- FAQs on Amazon
- How to Crack a Software Development Interview at Amazon
Amazon Software Development Engineer Levels
Every role in the corporate framework of Amazon is associated with a level. This level is determined based on two parameters:
- Years of Experience
- Performance in the Interview
After taking into consideration both the parameters mentioned above, a level from L4-L7 is allotted to the designation of the candidate. Here are the main job titles in the compensation hierarchy when it comes to software development engineers:
Associate Software Development Engineer 1 (SDE I, Level 4)
An SDE-I is a new hire with around 1-3 years of experience. Most corporate positions at Amazon begin at Level 4.
Software Development Engineer 2 (SDE-II, Level 5)
SDE-II is an individual with 3-10 years of experience; this includes experience with large codebases.
Software Development Engineer 3 (SDE-III, Level 6)
This level is achieved after completing at least 8-10 years of experience in the field of Software Development. The individual at this level should have led at least one important project.
Principle Software Development Engineer (Level 7)
An individual who begins a career at Level 4 at Amazon rarely reaches this position. This level is reserved for people with 10-15 years of experience.
Amazon Senior Software Development Engineer Salary
The salary structure of a software development engineer at Amazon can be divided into three components:
- Base Salary: The base salary is determined based on the function and location of the employee; however, the base salary has an upper limit of $160,000 and rarely exceeds this value.
- Bonus: The bonuses are awarded on an annual basis, and it varies between employees.
- Restricted Stock Units: RSU is a part of Amazon’s compensation package through which some shares of the company are given to the employee. We’ll discuss this further in the next section.
The estimated salaries for each level have been taken from Levels.fyi.
At Amazon, the compensation of an employee is based on their level. For example, a senior software development engineer at Amazon would be at Level 6 and would earn an estimated salary of around e $300K per year.
Amazon Software Development Engineer Stock Options
As a software development engineer at Amazon, you’re entitled to earn Restricted Stock Units (RSUs). Every FAANG company has its own way of compensating its employees through stocks and shares. This is a part of the total compensation that an individual receives.
At Amazon, the RSUs are subject to a four-year vesting schedule, so you’ll have to work at the company for a number of years before you can cash in your stock,
With every passing year, the vest will increase. In the first year, 5% of the stock will vest, whereas, in the second year, 15% will vest. In the third and fourth years, 40% of the stock will vest, respectively.
Benefits of Working at Amazon as a Software Development Engineer
In addition to the senior software development Amazon salary, employees are also eligible for various added benefits that Amazon has to offer. Amazon provides its employees with benefits worth approximately $5,400. These benefits can be broadly classified into three categories:
Amazon has company shuttles, regional transits, and in case the mode of transport provided by the company isn’t sufficient, then Amazon even provides transport allowances to its employees.
Health, Insurance, and Wellness Benefits
Some of the insurance policies provided by Amazon include:
- Accidental death and dismemberment insurance
- Dental and vision insurance
- Health insurance
- Disability insurance
- Life insurance
- Pet insurance
Onsite wellness benefits:
- Gym reimbursement
- Custom workstation for selective employees
- Pet-friendly workplace
Employee leave policy:
- Paternity leave of up to 6 weeks and maternity leave of up to 10 weeks
- 5 days of paid sick time off
- Personal leaves (6 personal days per year)
Amazon also contributes $500 to the employee savings count.
Home and Financial Benefits
Amazon offers a relocation bonus of $700
A thing unique to Amazon is, they offer a Mega Backdoor Roth IRA. The company allows the employee to contribute 10% of their pay towards the after-tax portion of the 401K plan. Employees also get:
- 401K Pension Plan
- Phone bill reimbursement
- Pet assistance
- Fertility assistance
Amazon Software Development Engineer Based on Location
The total compensation earned by a software development engineer varies according to the location and years of experience in the technological field.
This is not an all-inclusive list; Amazon has many more locations all across the United States.
As compared to the average salary earned by a level 6 senior software development engineer in other locations, the annual income of an employee working in the headquarters is substantially higher.
Software Development Engineer Salary at Amazon vs. Other Companies
A great way to decide if the compensation offered by Amazon is the best in the field is by comparing the salary offered by Amazon with two other leading tech companies — Microsoft and Google.
Entry-level Compensation Comparison
The compensation offered by Amazon to an entry-level Software Development Engineer is $151K, whereas, for the same position, Microsoft offers $162K, and Google offers $180K.
Second-level Compensation Comparison
The compensation offered to a Level 2 Amazon Software Development Engineer is $206K, whereas Google offers $256K and Microsoft offers $176K.
Third-level Compensation Comparison
The compensation offered to a Level three Amazon Software Development Engineer is $305K, whereas Google offers $343K and Microsoft offers $221K.
So, if you are looking to join a company for a good pay scale, Google should be your target. However, if growth is what you wish to achieve, Amazon will be a perfect fit for you.
How to Negotiate Salary at Amazon
Whether you are starting a new position or are expecting a promotion, or are relocating, salary negotiation is going to be a crucial aspect of the process. There are few points to keep in mind while politely negotiating for a salary you deserve:
- Know Your Worth! Do not undermine your efforts and years of experience in front of the recruiters.
- Research about the pay scale and compensation benefits offered at other FAANG companies. This will help you derive an estimate for yourself.
- Ask for more than what you expect; this way, you give the recruiters some room for adjustment.
- Negotiate for the salary at the right time. This is an important point to be noted when it comes to seeking a promotion. A bad mood can throw your opportunity of getting a raise out the window.
Signing bonuses offered by Amazon are extremely luring, so if you really think you deserve much more than what is offered, you can politely negotiate.
Feel free to check out our blog on Salary Negotiation Tips to learn about some of the common mistakes made during the process of salary negotiation and how to avoid them. Also, check out Highest Salary earned by a Software Development Engineer at FAANG companies.
FAQs on Amazon
- Does Amazon have a Salary Cap?
Yes, recruiters cannot offer a base salary higher than what is allotted to a given role and location. The base salary might vary according to the function but rarely exceeds $160,000.
- Can I apply to Amazon as a fresher Software Development Engineer?
It is recommended to gain experience from other tech companies before applying for Amazon, as Amazon mostly recruits individuals with a minimum of two years of work experience.
How to Crack the Software Development Interview at Amazon?
The only way to ace any of the FAANG company interviews, be it for the post of software engineer, software developer, or tech lead, is by adopting a smart strategy. The strategy can be devised only after understanding the technical interview process. After that, the following points can be considered:
- Derive a comprehensive and structured technical interview prep plan.
- Practice solving data algorithm problems every day to improve your problem-solving skills.
- Use competitive programming platforms to improve your coding skills.
- Practice mock interviews with Amazon hiring managers and employees.
The only way to successfully follow the mentioned points is to have a well-planned course.
If you are preparing for a tech interview, check out our technical interview checklist, interview questions page, and salary negotiation ebook to get interview-ready! Also, read How hard it is to get a job at Amazon, How to get software engineering Jobs at Amazon, and How to prepare for Amazon On-site Interview for specific insights and guidance on Amazon tech Interviews.
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