by Josh Doody
Amazon salary negotiation is unique because they use a one-of-a-kind structure for their compensation packages, and they are very focused on both attracting and retaining top talent for a long time.
The key question to ask about an Amazon job offer is “How much can this offer be improved through negotiation?” In my experience coaching software developers through Amazon salary negotiations, the answer varies from “somewhat” to “a whole lot”.
The trick is that you have to be willing to consider non-salary options and think deeply about how long you actually want to work at Amazon because their job offers are structured to increase in value over time, specifically after your second year as an employee.
The bottom line is that if you have a job offer from Amazon in a technical role, you likely have room to negotiate, and may have significant opportunities to increase your pay over the next several years if you’re willing to be a little creative.
What a typical Amazon job offer package looks like
Once you actually get through the Amazon interview gauntlet, you may receive a job offer. Let’s look at an example to see what you can expect.
Amazon’s offers are unique, but have three standard components:
- Base salary
- Sign-on bonus
- Equity (RSUs)
They will often roll all these numbers together to describe the offer in terms of “Total Compensation” by year, but that can be tricky to understand thanks to some quirks I’ll describe below.
Here’s an example taken from a modified version of a real Amazon job offer from one of my clients:
| Component | | Year 1 | Year 2 | Year 3 | Year 4 | Total |
|---|
| Base Salary | | $145k | $145k | $145k | $145k | $580k |
| Sign-on | | $30k | $20k | | | $50k |
| Total Cash | | $175k | $165k | $145k | $145k | $630k |
| Equity (RSUs) Vesting | | 5% | 15% | 40% | 40% | 100% |
| Equity (RSUs) | | 2.5 | 7.5 | 20 | 20 | 50 |
| Equity (RSUs) Value* | | $5k | $15k | $40k | $40k | $100k |
| Total | | $180k | $180k | $185k | $185k | $730k |
* Equity (RSUs) Value is computed using a round number of $2,000 per share to make things easy
Notice that the Total is pretty consistent through the first four years, but the sign-on bonus and equity components vary pretty dramatically from year to year.
This is what I was referring to above when I mentioned they incentivize you to stay for a few years. The vast majority of the equity is paid out in years three and four, so there’s a pretty big incentive to stick around.
Let’s look a little closer at the main components of an Amazon job offer.
Base Salary
As with most job offers, this is the stable, predictable component that you can use to pay your mortgage or car payment. You can’t know what company performance might look like in the future, so it’s hard to estimate how much of a bonus you’ll get or what your RSUs will be worth when they vest.
Amazon tends to pay competitive base salaries up to a point (see below). If you’re wondering whether the salary you’re offered is competitive, blind and levels.fyi are good places to start.
The base salary cap
The most unique thing about Amazon job offers is that they typically cap base salary at somewhere around $165–175k depending on division and geographic location.
If you run into the base salary cap, they’ll start adding equity and sign-on bonuses to improve the offer. More senior roles can command very large sign-on bonuses and RSU grants while offering a relatively modest base salary (when compared to some other big tech firms).
How flexible is Amazon on Base Salary?
As long as you’re under the base salary cap, they can be pretty flexible. They don’t typically make large moves on base salary, but they will improve the base salary up to a point.
Sign-on bonus
Sign-on bonuses, like equity, can range from a nice little amount into six figures.
I like to think of the sign-on bonus as a way to help bridge the gap between your first paycheck and your first RSU vesting date, and Amazon does this more or less explicitly to help compensate for the steep vesting schedule they use for equity (RSUs) (see below).
The Year 1 sign-on bonus is typically larger than Year 2’s, partially as an incentive for you to join, and partially because their steep new-hire equity vesting schedule means your total pay in Year 1 would be pretty low without some sort of sign-on bonus.
In Year 2, the sign-on bonus is smaller, but more of your equity will vest.
How flexible is Amazon on Sign-on Bonus?
Pretty flexible! And that’s especially true once you cross the base salary cap since they will begin adding a lot more equity. More equity means a bigger shortfall in Years 1 and 2, which means they offer larger sign-on bonuses to help bridge that gap.
Do you have to pay back your sign-on bonus if you leave before the end of Year 2?
Maybe.
Sometimes, Amazon will pay your Year 1 sign-on bonus out with your first paycheck in a lump sum. In that case, you’ll almost certainly have to pay back some or all of it if you leave before the end of your first year.
Sometimes, Amazon will pay out your sign-on bonus monthly, and you may not need to pay it back if you leave early (since you were only paid a prorated amount based on how long you were there).
It seems like the Year 2 sign-on bonus is often paid out monthly.
As far as I can tell, there’s not a lot of consistency here and it seems like Amazon may pay sign-on bonuses out differently for more-tenured positions than for less-tenured positions.
Bottom line: Ask your recruiter what strings are attached to your sign-on bonus so you don’t encounter any nasty surprises if you leave before the end of Year 2.
Equity (RSUs)
The Equity component of an Amazon job offer can range from “not very much” (as with the example above) to “wowzers, that’s a lot of equity!” depending on the role and whether you bump into the base salary cap.
Amazon is unique because they almost have to offer significant equity grants to compensate for the base salary cap, and your negotiation may end up focused entirely on equity and sign-on bonus.
Amazon’s unique equity vesting schedule
Let’s pause for a moment to talk about Amazon’s unique equity vesting schedule. It’s easiest if we start by looking at a typical equity vesting schedule, then we’ll loop back to Amazon.
How most companies handle equity vesting
Equity is often paid out in equal installments over four years, beginning at the beginning of the second year. So if you got 100 shares of company stock (RSUs, typically) as your equity component at a typical public company, here’s what their vesting schedule might look like:
- Year 1: 25%
- Year 2: 25%
- Year 3: 25%
- Year 4: 25%
There’s typically a one-year cliff, which means nothing is paid out until you’ve been there for a year, then there are regular payouts after that.
In our example above, that might look like this:
- Beginning of Year 2 | 25% payout for Year 1: 25 shares
- Years 2 through 4 | Monthly payouts: About 2.08 shares per month
Sometimes those payments will be quarterly or semi-annually. But the basic idea is that once you’ve been there for a year, you start getting equity payouts at regular intervals. Pretty straightforward!
How Amazon handles equity vesting
Amazon is different.
Here’s their vesting schedule:
- Year 1: 5%
- Year 2: 15%
- Year 3: 40%
- Year 4: 40%
And Years 1 and 2 are each a cliff, followed by semi-annual payouts in Years 3 and 4. So the same 100 shares at Amazon would be paid out like this:
- Beginning of Year 2 | 5% payout for Year 1: 5 shares
- Beginning of Year 3 | 15% payout for Year 2: 15 shares
- Beginning of Month 7 in Year 3 | 20% payout: 20 shares
- Beginning of Year 4 | 20% payout: 20 shares
- Beginning of Month 7 in Year 4 | 20% payout: 20 shares
- Beginning of Year 5 | 20% payout: 20 shares
The optimistic reading on this is that it’s a way to incentivize good employees to stick around longer so they get the bulk of their equity payouts.
The cynical reading of this is that it gives Amazon time to churn poorly-performing employees out of the company before they vest the bulk of their equity.
If you want a better look at what it’s like negotiating an Amazon job offer, including how they use sign-on bonuses to take the sting out of that steep vesting schedule, take a look at my new guide!
One interesting thing about Amazon’s offers is they typically include a number of shares (like “50” in the example above) as opposed to a computed current value (like “$100k” in the example above).
This is the more accurate way to talk about RSUs, but it’s not what most of the other big tech firms do. This way, you have to do more math to figure out the current value of the shares, and you’ll end up discussing a number of shares rather than a dollar amount most of the time.
How flexible is Amazon on Equity (RSUs)?
Moderately flexible to extremely flexible depending on how close you are to the base salary cap.
Like the other big tech firms, Amazon sees equity as a very big carrot to entice top talent to join their team and stick around, so they tend to be pretty flexible on equity.
How to approach your Amazon salary negotiation
The salary negotiation with Amazon will begin earlier than you might expect.
Before you get a job offer
Your Amazon recruiter will often ask for your salary history, or at least your current salary if it’s legal where they are. Do not tell them your current salary.
They will also usually ask for your salary expectations. That request will sound something like this:
So what were you hoping for in terms of compensation if you come aboard here at Amazon?
Do not tell them your salary expectations because you will essentially be guessing what they might pay someone with your skillset and experience to do the job they need done.
While they might have a good idea of the value of that job to Amazon’s business, you would only be guessing. You will practically always guess wrong and cost yourself money later on. So just don’t guess.
Also, because Amazon’s equity vesting schedule is so unusual, and because they include different-sized Year 1 and Year 2 sign-on bonuses, it can be very difficult to even describe a “salary number” in those terms.
You’re much better off seeing what they offer, spending some time with it to understand what your actual pay will look like over the next few years, and negotiating from there.
Learn more For a deep dive on how to avoid sharing your current or expected salary when asked, see this guide:
How to answer the “What’s your current or expected salary?” question
Once you receive your job offer from Amazon
The first thing you should do is look to see if you’re at or near the base salary cap. It’s important to know up front if you can expect a move on base salary or if you’re really just going to negotiate equity and sign-on bonus.
That doesn’t mean you won’t counter on base salary, but it helps to know whether you can expect any movement there so you’re not disappointed if they aren’t flexible on base salary.
Once you counter on base salary, they will often adjust the job offer in multiple dimensions, so it’s important to do the math to figure out what your annual compensation will be if they adjust base salary, sign-on bonus and/or equity.
Be sure that if you ask for and receive more equity that you also try to improve your sign-on bonus to bridge the Year 1 and Year 2 gaps while you wait on the heavy vesting in Years 3 and 4.
Learn more More salary negotiation strategy and tactics...
Salary Negotiation Guide
What to look out for when negotiating an Amazon job offer package
- Amazon caps base salary for most job at around $165–175k, so make sure to see whether you’re near the cap before you negotiate.
- Amazon has a very unique equity vesting schedule that ramps significantly in Years 3 and 4.
- Amazon frequently offers two sign-on bonuses—Year 1 and Year 2—to help bridge the gap during the slow part of the equity vesting ramp.
- Do the math for each year’s compensation based on their offer so you can see how your pay will change as sign-on bonuses are paid out and equity vesting ramps up later on.
FAQs
The bottom line is that if you have a job offer from Amazon in a technical role, you likely have room to negotiate, and may have significant opportunities to increase your pay over the next several years if you're willing to be a little creative.
Can you negotiate salary without losing the offer? ›
Again, most companies expect job seekers to negotiate salary after extending a job offer. And if you prove your worth to the company or have some other leverage like another offer on a table, they can seriously consider granting you higher pay.
Can I negotiate salary after accepting offer? ›
The key here is to make sure that a written offer is already in place before negotiating. One must be sure first that the employer indeed wants them, as evidenced by a written offer. If the approval is only verbal, a salary negotiation should be put on hold.
Is Level 6 high at Amazon? ›
You can work at Amazon level 6 only if you have like 8 to 10 years of experience. This level has a higher salary range. For example, if you are a business development at level 5, you would earn $211K, but if you are at level 6 as a business development you would earn 309K.
What is L5 salary at Amazon? ›
The estimated total pay for a L5 Area Manager at Amazon is $174,602 per year. This number represents the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users. The estimated base pay is $90,923 per year.
Does Amazon increase 2022 pay? ›
Sept. 28, 2022, at 9:41 p.m. NEW YORK (AP) — Amazon said Wednesday it's raising its average starting pay for frontline workers from $18 to $19 a hour, a boost that could help it attract more employees in a tight labor market as the holiday season approaches.
Is negotiating salary risky? ›
You can almost never go wrong by negotiating salary. Many people are concerned that by asking for more money, they might lose the job offer — but that's almost never the case. After all, most job offers don't disclose the salary range upfront, so recruiters expect that you'll have to talk about it at some point.
Should you accept first salary offer? ›
It really depends. Some people feel you should take the first offer if you're happy with it. Never negotiate just for the sake of negotiating. Other people disagree with that position and believe anytime you're given the chance to negotiate, you should.
Can negotiating salary backfire? ›
Negotiating a salary is a crucial part of accepting a new position, but botching this step can cost a candidate the job. And even if the fallout isn't quite as severe, the outcome of salary negotiations can damage the employee's ability to succeed at work.
How do you ask for higher salary after a job offer? ›
How to Negotiate Salary After You Get a Job Offer
- Become familiar with industry salary trends. You need to enter a salary negotiation as informed as possible. ...
- Build your case. ...
- Tell the truth. ...
- Factor in perks and benefits. ...
- Practice your delivery. ...
- Know when to wrap it up. ...
- Get everything in writing. ...
- Stay positive.
Don't wait until your next interview or scheduled conversation with the hiring manager. Email or call back as soon as you realize that you've lowballed yourself. They are likely taking the salary that you agreed to for budget approval, so the sooner you communicate, the better.
How do you politely ask to negotiate salary? ›
"I'm very excited about the position and know that I'd be the right fit for the team. I'm also excited about your offer, and knowing that I'll bring a lot of value to the table based on my experience that we discussed during the interviews, I'm wondering if we can explore a slightly higher starting salary of $60,000.
How much is Amazon signing bonus? ›
An Amazon “We're hiring!” sign. Amazon announced its new sign-on bonus program and plans to hire over 150,000 workers on September 2021.
What is L6 salary at Amazon? ›
💰 $234k - average Amazon Technical Program Manager (L6) salary [updated 2022] | Candor.
How fast can you get promoted at Amazon? ›
Previous experience matters especially if you are applying for a job internally. Advancing from T1 to T3 doesn't need much experience. You can do it in less than six months. To apply for an L4 position you would need either a Bachelor's degree or a two years experience as a blue badge T1 associate.
How much does an L10 make at Amazon? ›
💰 $234k - average Amazon Engagement manager (L10) salary [updated 2022] | Candor.
How much does an L7 make at Amazon? ›
Employees at Amazon as Senior Sdm L7 earn an average of $539k, mostly ranging from $157k per year to $825k per year based on 117 profiles. The top 10% of employees earn more than $714k per year.
What is level 4 salary at Amazon? ›
As of Oct 18, 2022, the average annual pay for an Amazon Level 4 in the United States is $64,108 a year. Just in case you need a simple salary calculator, that works out to be approximately $30.82 an hour. This is the equivalent of $1,232/week or $5,342/month.
How much raise does Amazon give? ›
31, 2021. Amazon is raising its hourly wages for its warehouse and delivery workers, the company announced Wednesday. Beginning in October, Amazon's average starting pay for front-line employees in the U.S. will be bumped up to more than $19 per hour from $18 per hour, the company said.
Is Amazon raising wages? ›
Amazon.com Inc. announced a pay increase for hourly workers in the US that it says will take average starting wage for most front-line employees in warehousing and transportation to more than $19 an hour. The company's minimum level of $15 an hour for all hourly workers in the US remains unchanged.
How much does an Amazon Employee make? As of Oct 15, 2022, the average annual pay for an Amazon Employee in the United States is $49,834 a year. Just in case you need a simple salary calculator, that works out to be approximately $23.96 an hour. This is the equivalent of $958/week or $4,152/month.
Do recruiters expect you to negotiate salary? ›
Negotiating your compensation package can be a stressful experience for many, however most employers expect candidates will negotiate their offer.
Do you negotiate salary with HR or hiring manager? ›
So, be transparent with the hiring manager if you're deciding between two offers. Avoid using one company as leverage to get more money from another, but don't sell yourself short either. If your top pick's offering the lowest salary, go ahead and nudge the hiring manager a bit.
Do employers expect you to negotiate salary? ›
People feel like they can't or shouldn't negotiate, but companies expect you to negotiate. If higher pay isn't in the cards, you can also negotiate for those non-salary items.
How much more should I ask for salary negotiation? ›
Start with a figure that's no more than 10-20% above their initial offer. Remember, you're applying for entry level, and you shouldn't expect something on the higher range. Consider negotiating lower if 10-20% places you above the average.
How much should I counter offer salary? ›
A good range for a counter is between 10% and 20% above their initial offer. On the low end, 10% is enough to make a counter worthwhile, but not enough to cause anyone any heartburn.
Should you accept a job offer immediately? ›
While accepting an offer immediately can be tempting, especially when you're excited/relieved to finally have a new job opportunity, you should always wait a day or two to accept the offer instead of accepting on the spot.
When should you walk away from salary negotiation? ›
When considering your numbers, you should also come up with a “walk away point”—a final offer that's so low that you have to turn it down. This could be based on financial need, market value, or simply what you need to feel good about the salary you're bringing home.
Is it OK to counter offer a job offer? ›
Come to think of it, a good way to figure out if they actually made their best-possible offer is to counter offer and see if they budge. And even if they can't budge, you can always negotiate non-salary items like vacation, working from home a couple days a week, or a signing bonus.
Is it OK to negotiate salary over email? ›
The bottom line. Not getting the salary offer you were expecting can be disappointing. The good news is that there is still a chance to get the pay you want. With the right salary negotiation email, you can show an employer what all you bring to the table and why you are worth the extra money.
Explain to them the value you will bring to their organization should they increase your salary. State the amount that you are counter-offering and state that you are open for more negotiation. End your counter offer letter with additional gratitude expressing how you appreciate being considered for the position.
How do I negotiate a higher salary after you already gave your range of salary expectation? ›
Here are 3 strategies to renegotiate your salary successfully.
- Blame it on the role. Your Strategy to negotiate salary: If you've discovered substantial differences in the role since you quoted a salary, use this new information to justify better pay. ...
- Point to new market data. ...
- Fess up.
Make a request: Politely request your desires rather than demand them. Use a firm tone without sounding aggressive or using absolutes. Some companies might not be able to accept your exact counteroffer, but may be willing to negotiate.
How do you tell a recruiter the salary is too low? ›
If you're sure that you want to decline, consider saying something like this: "I appreciate the offer and your time, but I can't accept this position at the salary you're offering. If the salary range is something that can be negotiated, please let me know."
How do I reject a job offer due to low salary? ›
“I sincerely appreciate you taking the time to discuss salary expectations with me. Ultimately, I will have to decline this role/job offer as the salary is too far outside my expectations to leave my current position.”
Why do recruiters lowball? ›
Employers can offer low salaries for a number of reasons — perhaps they have a tight hiring budget or they're leaving some wiggle room because they expect you to negotiate. It doesn't always have to do with the individual person.
How do you negotiate a lowball salary offer? ›
How to Respond To A Lowball Salary Offer
- Ask for more time to think about the offer. ...
- Negotiate for a higher salary. ...
- Consider the company's overall package. ...
- Negotiate for more benefits. ...
- Create a plan for performance reviews. ...
- Don't be afraid to walk away.
You can use the following steps as guidance when countering a job offer to negotiate your compensation:
- Ask for time to make your decision. ...
- Conduct research on industry compensation. ...
- Assess your qualifications and experience. ...
- Review and evaluate the initial offer. ...
- Determine your counteroffer value. ...
- Submit your counteroffer.
Tips to help you get through an unsuccessful negotiation
- Don't take it personally. While it is easy to take the rejection straight to your heart, we want to reassure you, 'it's not you, it's them'. ...
- Keep yourself calm and professional. Money is a controversial topic. ...
- Don't go overboard with your counteroffers.
This is often three months or 90 days long. During this time, staff members usually receive a slightly reduced rate which will be increased after successful completion. But Amazon is not one of those companies. While it does expect its employees to complete a probationary period, it doesn't offer a raise at the end.
Does Amazon hold your first paycheck? No, but you have to work at least two weeks before you receive your first paycheck.
How do bonuses work at Amazon? ›
The bonus is paid out with every paycheck, so in essence it's just additional salary for the first two years you are at Amazon. As a quick example: If you were entitled to a $60,000 year one sign-on bonus, you will receive an additional $5,000 per paycheck.
What does L5 mean at Amazon? ›
SDE II (L5): This is also a software engineer role, but more senior generally ranging from three to ten years of industry experience. You will be responsible for larger components, sets of features or mid-tier applications. This level still works closely with design and product to strategize forward.
Is L5 a senior? ›
L5- Senior Software Engineer: 6-9 years of industry experience. This is the level most engineers are at internally within Google.
What is a level 7 at Amazon? ›
In term of job title, Level 7 manager has "Sr. Manager" in their job titles, and level 7 individual contributor has the word "principal" in their job titles (e.g. Principal Product Manager, Principal Software Development Manager, etc.) Total Compensation: Year 1: $330,000.
Does Amazon give raises every 6 months? ›
How often do raises occur at Amazon.com? Once a year at most.
What is L1 in Amazon? ›
Entry level positions at Amazon warehouses are usually referred to as Tier 1 (T1) or Level 1 (L1) depending on the position and the type of facility.
How much does an L3 make at Amazon? ›
How Much Do Amazon L3 Jobs Pay per Year? $35,500 is the 25th percentile. Salaries below this are outliers. $89,000 is the 75th percentile.
Can you negotiate PTO at Amazon? ›
Amazon Offers Poor Benefits
For example, Amazon only offers 2 weeks of vacation (even for senior roles). That said, it is nearly impossible to negotiate a change in benefits into your contract. The reason to bring this up is as leverage to increase your total compensation.
Can you negotiate your hourly wage? ›
Conclusion: How to Negotiate Hourly Pay
Go into the negotiation with confidence (and solid research), be polite but direct/firm, and find out what the manager can offer. If you get a wage that's fair for both sides and/or find out the best an employer can offer you, then you've had a successful negotiation.
Amazon recruiter says they don't negotiate salaries.
Can you negotiate Amazon warehouse offer? ›
In its ongoing quest to do and offer everything, Amazon is today adding a new Make An Offer option that allows buyers and sellers to negotiate a mutually agreeable price.
How much does an L7 make at Amazon? ›
Employees at Amazon as Senior Sdm L7 earn an average of $539k, mostly ranging from $157k per year to $825k per year based on 117 profiles. The top 10% of employees earn more than $714k per year.
What does an L6 make at Amazon? ›
💰 $234k - average Amazon Technical Program Manager (L6) salary [updated 2022] | Candor.
Does Amazon cap base salary? ›
Amazon Is Raising Base Salary Cap to $350,000 From $160,000.
How do you respond to a low salary offer? ›
How to respond to a low salary offer
- Ask for time. ...
- Understand your minimum acceptable salary. ...
- Conduct research. ...
- Make a plan. ...
- Practice negotiations. ...
- Show enthusiasm. ...
- Negotiate for early performance reviews. ...
- Focus on your skills and expertise.
A good range for a counter is between 10% and 20% above their initial offer. On the low end, 10% is enough to make a counter worthwhile, but not enough to cause anyone any heartburn.
How do you ask for more money from a job offer? ›
13 tips to prepare for salary negotiation
- Start by evaluating what you have to offer. ...
- Research the market average. ...
- Prepare your talking points. ...
- Schedule a time to discuss. ...
- Rehearse with a trusted friend. ...
- Be confident. ...
- Lead with gratitude. ...
- Ask for the top of your range.
The estimated total pay for a Area Manager L4 at Amazon is $113,897 per year. This number represents the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users. The estimated base pay is $62,602 per year.
How much does a Level 4 make at Amazon? ›
As of Oct 18, 2022, the average annual pay for an Amazon Level 4 in the United States is $64,108 a year. Just in case you need a simple salary calculator, that works out to be approximately $30.82 an hour. This is the equivalent of $1,232/week or $5,342/month.
In term of job title, Level 7 manager has "Sr. Manager" in their job titles, and level 7 individual contributor has the word "principal" in their job titles (e.g. Principal Product Manager, Principal Software Development Manager, etc.) Total Compensation: Year 1: $330,000.
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