Main image of article What Amazon Pays Its Newest Tech Hires

How much can a brand-new engineering recruit earn at Amazon? That's a vital question for hiring managers and recruiters trying to figure out how high to set their own companies' starting salaries.

It's also a pressing question as we head into summer, when many graduating computer-science majors in the United States are hunting for their first jobs. For companies that regularly hire lots of fresh graduates, this is a crunch moment, and it's good to know what one of the world's largest e-commerce platforms is doing, if only because it might be competing in certain geographies for the same pool of talent.

While tech companies tend to keep quiet about their employment and salary data, candidates have a tendency to post their offers online—such as this magnificent Reddit thread. We recently posted a dissection of Google’s entry-level salaries for software engineers, which made us wonder about other tech giants and how much they’re offering their newest tech professionals. We decided to take a poke at Amazon, which is much in the news thanks to everything from its one-day shipping policy to the travails at Amazon Game Studios.

In order to arrive at compensation numbers for Amazon’s wet-behind-the-ears software engineers, we relied primarily on the aforementioned Reddit thread. Here’s a handy breakdown of its data for your perusal:

One thing’s immediately clear from the Reddit data: Anyone starting out as a software engineer at Amazon can expect to pull down $108,000 in base salary, $70,000 in stock options, and anywhere from $64,000 to $44,000 as a bonus (which averaged to $51,142, based on the total number of respondents). The company was remarkably consistent about those payouts, if you take the data at face value.

It’s also higher than what the average tech professional earns, even those who are well into their careers. According to the 2019 Dice Salary Survey, the average tech pro pulls down $93,244—some $84 less than it was in 2015. 

Amazon’s entry-level compensation is great for someone working at a branch facility in, say, Arizona. But for an engineer placed at a company office in a major tech hub—such as Seattle (where Amazon’s headquarters, seen in the image above, is located) or the Bay Area—that money (while certainly generous) won’t go nearly as far as they might like. Big-city rent is hellishly expensive, and the bulk of stock options take years to vest.

According to Glassdoor, the average software engineer at Amazon makes a base pay of $114,762 (based off 479 responses), with an average bonus of $20,959 and a stock bonus of $30,634. That’s not much higher than the average salaries reported by brand-new engineers—and the stock bonuses are actually much smaller. Interesting!

Highly specialized jobs, meanwhile, command a higher average salary. For example, Indeed reports that Amazon algorithm engineers can earn an annual average of $150,000, while principal software engineers can score $160,000. That’s before you factor in benefits such as stock options, which are clearly a big part of Amazon’s overall compensation package. (It’s worth noting that machine learning engineers, which are a particularly hot job category at the moment, can pull down $142,010 at the company, which seems a bit low—although those with the right combination of experience and skills no doubt earn quite a bit more.) 

If you’re looking for comparisons, it’s also notable that Amazon pays its entry-level software engineers less than Google, where total compensation can hit $210,000 (provided Googlers earn their full bonus, etc.). Amazon is clearly betting that its brand will attract tech professionals who want a big name on their résumé. Meanwhile, other companies will probably have to live with the idea that, if they want to hire fresh talent right out of college or graduate school, they might have to end up paying more than they expect in this highly competitive environment.