Employee benefits
Understanding Amazon employee benefits: a comprehensive guide
Amazon pays its corporate employees differently from most large-tech peers. There is no annual cash bonus, equity vests on a back-loaded schedule, the 401(k) match is modest with a three-year cliff, and a sign-on bonus carries the first two years. This page walks through the package for US corporate (Level 4 and above) employees, with every figure checked against Amazon's own pages, SEC filings, or the IRS.
- Cash compensation: base salary and the sign-on bonus
- Restricted stock units: the 5/15/40/40 schedule
- Employee stock purchase plan: Amazon does not have one
- 401(k): the match, the three-year cliff, and after-tax contributions
- Medical plans and the Health Savings Account
- Parental leave, adoption, and fertility benefits
- Career Choice, discounts, insurance, and other perks
- Common mistakes
Cash compensation: base salary and the sign-on bonus
Amazon's total compensation for salaried employees has three parts: base salary, a sign-on bonus for new hires, and restricted stock units. What is missing is an annual performance bonus. Amazon's 2025 proxy statement says it plainly: "We generally do not provide cash bonuses other than in a new-hire context and do not have an annual incentive program." That describes executives, but it is the company-wide philosophy, so do not budget for a year-end bonus. Base salary varies by level, role, and location; Amazon raised its base-pay cap substantially in 2022 (reported at $350,000 by myStockOptions, citing GeekWire).
How the sign-on bonus is paid
The sign-on bonus bridges the first two years, when little equity has vested. Amazon's US benefits overview confirms the mechanics indirectly: sign-on bonus payments "(if included in your job offer) continue per original schedule" during leave, and under Ramp Back "your base pay, sign-on bonus payments, and RSU vesting will be proportional to the option you select." The sign-on is not one check on day one; it is paid in installments on a schedule set in your offer letter. Offer letters are reported (Levels.fyi and recruiter blogs) to split it into a larger first-year amount and a smaller second-year amount paid across paychecks. Your offer letter governs, including any repayment clause.
Sign-on payments are supplemental wages. For 2026 the IRS flat withholding rate is 22%, rising to 37% once supplemental wages paid to you in a calendar year exceed $1 million (IRS Publication 15, 2026). If your marginal rate is above 22%, set money aside or adjust your W-4.
Restricted stock units: the 5/15/40/40 schedule
Amazon's official language is general: depending on job level, and if you are scheduled for 30 or more hours a week, you are eligible to "receive a grant of RSUs that vest over time, in accordance with plan documents" plus refresh grants (amazon.jobs). The 2024 annual report calls RSUs "our primary vehicle for equity compensation."
Amazon does not publish the standard new-hire schedule, but it is consistently reported, including by myStockOptions, as 5% after year one, 15% after year two, then 20% every six months for two more years. Your grant agreement in the Morgan Stanley at Work portal is the authority for your award.
| Year | Reported vesting | Cumulative |
|---|---|---|
| Year 1 | 5% | 5% |
| Year 2 | 15% | 20% |
| Year 3 | 40% (two 20% tranches) | 60% |
| Year 4 | 40% (two 20% tranches) | 100% |
The headline grant value is mostly years three and four money; refresh grants layer on with their own schedules. Model your stack with the Amazon preset of our vesting calculator.
Taxation at vest
Under the IRS restricted property rules (Publication 525), the fair market value of the shares is wages in the year they become substantially vested, and that value is your cost basis. Amazon's stock plan administrator is Morgan Stanley at Work; its guide for Amazon employees lists three ways to cover withholding: sell to cover (the default; enough shares are sold on the vest date to pay taxes and fees), sell all shares, or pay cash into a linked E*TRADE account at least five trading days before the vest.
The 22% default is the trap. In year three, when 40% of a grant vests, many employees land in the 32% or 35% bracket and withholding has not kept up. Our RSU taxes guide explains the gap; the RSU tax calculator estimates it.
Sell at vest or hold?
Because your basis equals the vest-day price, selling on the vest date adds almost no tax; the income tax was triggered by the vest. Holding is a separate decision to add Amazon exposure on top of your salary, unvested grants, and career, and it should be made on purpose. The reasoning is on our Amazon RSUs and your options after vesting page and the Amazon RSU vesting and taxes guide.
Employee stock purchase plan: Amazon does not have one
Amazon has no ESPP. The proxy statement's equity compensation plan table lists two plans only: the shareholder-approved 1997 Stock Incentive Plan, which authorizes options and RSUs, and the 1999 Nonofficer Employee Stock Option Plan. RSUs have been Amazon's "primary form of stock-based compensation since 2002" (2025 DEF 14A). If you are comparing an Amazon offer with a company that runs a discounted ESPP, such as the one in our Apple benefits guide, treat that discount as real money Amazon is not offering.
401(k): the match, the three-year cliff, and after-tax contributions
Amazon's 401(k) is administered by Fidelity, and employees age 18 or older can join from their date of hire. The formula, from Amazon's benefits overview: "For every $1 of employee contribution you make (up to 4% of your eligible pay), Amazon will contribute an additional $0.50 to your account in the form of matching contributions. You can get up to a 2% match." Catch-up contributions are not matched.
Vesting is the catch: "You become vested in matching contributions after you're credited with three years of vesting service. A year of vesting service is defined as a calendar year in which you complete 1,000 hours of service." It is a cliff: leave before three years and the whole match is forfeited. Our Amazon 401(k) guide covers the plan in more depth.
2026 contribution limits
| Limit (2026) | Amount | Source |
|---|---|---|
| Employee pre-tax plus Roth deferrals | $24,500 | IRS |
| Catch-up, age 50 and over | $8,000 | IRS |
| Catch-up, ages 60 to 63 | $11,250 | IRS |
| Total of all contributions, section 415(c) | $72,000 | IRS Notice 2025-67 |
After-tax contributions and the mega-backdoor Roth
Amazon's page says you can contribute "from 1% to 90% of your eligible pay on a pre-tax basis, Roth, or traditional after-tax basis." Traditional after-tax contributions are the raw material for a mega-backdoor Roth: you contribute after-tax dollars above the $24,500 deferral limit, up to the $72,000 total, and convert them to Roth inside the plan. Advisers who work with Amazon employees report that the Fidelity plan supports in-plan Roth conversion, including an automatic election; Amazon's public page does not say so, so confirm the feature and any plan-level cap with Fidelity.
The room is large. On a $200,000 salary, contributing the full $24,500 and receiving the maximum 2% match ($4,000), the after-tax space is $72,000 minus $24,500 minus $4,000, or $43,500 a year. Run your figures in the mega-backdoor Roth calculator. Capture the match first by contributing at least 4% of pay every pay period rather than front-loading.
Medical plans and the Health Savings Account
Amazon offers several medical plan designs from day one on Aetna, Cigna, Premera Blue Cross, or Kaiser Permanente networks, depending on where you live. One design is the Health Savings Plan, a high-deductible plan paired with a Health Savings Account that Amazon describes as having "employee and employer contributions" (aboutamazon.com). If you enroll in it, you cannot also use the general-purpose Health Care FSA.
For 2026 the IRS caps HSA contributions at $4,400 for self-only and $8,750 for family coverage, with the employer's contribution counting toward the cap. A plan is high-deductible in 2026 only if its deductible is at least $1,700 (self) or $3,400 (family) and its out-of-pocket maximum does not exceed $8,500 or $17,000 (IRS Revenue Procedure 2025-19). Amazon's FSA limits for the 2025 plan year were $3,200 (Health Care) and $5,000 (Dependent Care).
The HSA is the only account that is tax-deductible going in, tax-free while invested, and tax-free coming out for medical costs. If cash flow allows, pay current medical bills from checking, invest the HSA, and keep receipts; you can reimburse yourself years later for any expense incurred while the account was open.
Parental leave, adoption, and fertility benefits
Birthing parents get up to 20 weeks of paid leave: up to 14 weeks of pregnancy leave at 100% of salary on doctor-ordered short-term disability, plus six weeks of Paid Parental Leave. Other parents get the six weeks. Parental leave requires a year of continuous employment and can be taken any time in the first year after a birth or adoption (aboutamazon.com). RSUs keep vesting on schedule during pregnancy and parental leave, and sign-on installments continue.
- Leave Share passes the pay for unused parental leave to a spouse or domestic partner whose employer offers none.
- Ramp Back gives birth parents and primary caregivers eight weeks of reduced hours after leave (50% for eight weeks, 50% then 75% for four weeks each, or 75% for eight weeks). Base pay, sign-on payments, and RSU vesting are prorated, and a new vesting schedule is issued on return.
- Adoption and surrogacy expenses are reimbursed up to $10,000 per household after 90 days of employment.
- Fertility and family building runs through Maven for employees on an Amazon medical plan, with no infertility diagnosis required; treatment coverage begins after 90 days (aboutamazon.com).
Career Choice, discounts, insurance, and other perks
- Career Choice. Amazon pre-pays tuition and reimburses books and fees up to an annual amount at more than 400 education partners. Long an hourly benefit after 90 days, Amazon is "expanding the program to include U.S.-based salaried employees at Level 4 and above" (aboutamazon.com). Check eligibility before paying for a degree yourself.
- Employee discount. A code for 10% off Amazon merchandise, capped at $100 of discount per year, plus 10% off eligible online groceries and 20% off eligible in-store purchases at Whole Foods Market (aboutamazon.com).
- Life and disability insurance. Company-paid basic life and AD&D of two times base salary up to $300,000, with optional supplemental coverage up to $2,200,000. Short- and long-term disability are company-paid at 60% of eligible salary; STD has a seven-day wait and pays up to 26 weeks.
- Commuting. Fully subsidized transit passes at eligible corporate locations and a commuter subsidy covering up to 50% of parking.
- Payroll savings tools. An emergency savings program and a 529 college savings program funded from your paycheck.
Common mistakes
- Reading the offer as if year one equals a quarter of the grant. Only 5% is reported to vest in year one. Compare offers year by year.
- Letting 22% withholding stand in a 35% year. Year-three vests routinely leave a five-figure balance due in April.
- Leaving in month 35. The match has a three-year cliff. Know what an early exit forfeits.
- Ignoring the after-tax 401(k) option. Tens of thousands of dollars of annual Roth space goes unused.
- Holding every vested share by default, and treating the HSA as a spending account.
Bottom line. At Amazon the biggest dollar decisions are, in order: planning for the year-three RSU tax jump, deciding in advance what to do with vested shares, contributing at least 4% of pay every paycheck and staying past the three-year cliff, using the after-tax 401(k) space if you can, and funding the HSA. The sign-on bonus is bridge money, not a bonus you will receive again.
Amazon revises its plans each benefit year, and eligibility varies by location, hours, and level. Confirm match terms at Fidelity, your grant schedule in the Morgan Stanley at Work portal, plan designs in the official Amazon benefits overview, and the year's limits on irs.gov before acting. See also the Amazon money guides hub.