Amazon Employee Benefits
AMAZON 401(K)
& ROTH CONVERSION
AMAZON
RSU
AMAZON’S OTHER BENEFITS
& COMPENSATION
Avier Wealth Advisors is not affiliated with Amazon. While Avier communicates with its clients regarding their Amazon employee benefits, and educates itself on the Amazon Benefits, there is no guarantee that the information we have provided is accurate. Amazon employees are encouraged to contact their employer should they have any questions regarding their specific employee benefits.
How can I best utilize my Amazon employee benefits package?
Amazon 401(k) Plan
Contribution Matching
Mega Backdoor Roth Conversion
BrokerageLink Option
BrokerageLink is one of 26 options offered within your Amazon 401(k) plan. This option gives you access to thousands of additional mutual funds not available with the standard plan, including funds managed by Vanguard, PIMCO and Eaton Vance. Why does this matter? For starters, it allows you to invest in asset classes that would otherwise be unavailable to you in your standard 401(k). This can allow you to increase the diversification of your investments within your 401(k), which may potentially create opportunities to achieve greater long-term returns.
Sustainable Investing
Sustainable Investing, also known as Socially Responsible Investing (SRI), means incorporating Environmental, Social and Governance (ESG) criteria into the investment selection process. Essentially, it allows you to invest in a way that aligns with your values without necessarily compromising diversification or returns. While there is currently just one socially focused fund option within your standard Amazon 401(k), you can access hundreds of SRI mutual funds and ETFs through BrokerageLink. These options allow you to create a Sustainable Portfolio within your 401(k).For more on how to assess and take advantage of this option, see our longer How–To article.
Amazon Stock Awards
Restricted Stock Units (RSUs)
Amazon directs your custodian (Fidelity or Morgan Stanley) to automatically withhold shares for taxes so you won’t actually receive every share that was granted to you in your brokerage account. There is nothing that can be done to defer taxable income generated by these vesting shares of stock.
Typically, Amazon employees let their stock grants accumulate in their investment account while covering common living expenses with their salary. We encourage our clients to take a different approach and use the proceeds of these vested shares to help cover living expenses. This frees up more of your salary, allowing you to take full advantage of the many tax-preferred benefits available to you, such as your 401(k) and the Mega Backdoor Roth Conversion benefit. This also allows you to diversify out of your potentially concentrated position in Amazon stock. Restricted Stock Units vest multiple times per year and can vary in amount. We can work with you to organize and plan your cash flows in order to implement many of these tax-saving strategies.
Amazon New Hire Compensation
If you are a new employee of Amazon, it may be a bit confusing when trying to understand how you get paid, particularly in the first few years. There are three ways in which you will be compensated upon being hired at Amazon: a base salary, a new hire bonus, and restricted stock units (RSUs).
Check out the video for a more detailed explanation of compensation for new Amazon employees.
Base Salary
This one is pretty straightforward. Note that as of 2021, the max base salary for any Amazon employee is $160,000 ($185,000 for NY Metro and San Francisco/Bay Area Metro). Even if you are being hired on at a higher level, don’t be surprised if your starting salary is lower than $160,000. Amazon wants there to be some room for future raises.
New Hire Bonus
Restricted Stock Units (RSUs)
The total amount of on–hire RSUs that are granted to you will be determined when you are hired. These RSUs will vest over the first four years of employment. Five percent of these will vest at the end of year one, 15 percent will vest at the end of year two. In years 3 and 4, you will receive RSUs vests twice a year (every 6 months), you will receive 20% of your RSU vests every 6 months –a total of 40 percent will vest in year three and 40 percent will vest in year four. The percentage you receive over time is explained in more detail in this article. We walk you thru an example of your compensation timeline over 4 years.
Investing as an Amazon employee
It’s important for Amazonians to understand how their compensation structure works and to develop an investment strategy. The way you are compensated in your first two years of employment looks very different than how you are compensated in years three, four, and beyond which in turn shapes the ways in which you should think about investing.
In the video we walk you through an example of how to automate your investing year by year, helping you grow your retirement savings, decrease your concentrated stock risk, and boost your short and mid-term saving goals.
Additional Benefits Available for Amazon Employees
Amazon offers its full–time, Class F employees a wide range of benefits to support themselves and their families. Benefits vary by location and by scheduled hours worked, below is a summary of what maybe provided to full–time (blue badge) employees.
Health Benefits
Amazon has two different health plans: a shared deductible health plan and a Health Savings Account (HSA). For anyone interested in taking a strategic approach to wealth management while working at Microsoft, the HSA plan can be especially appealing and Avier can help workers interested in the Amazon HSA identify ways they can invest HSA funds.
Life Insurance and Other Coverage
Amazon provides two times your annual base salary for Basic Life and AD&D insurance to employees. Additional coverage is offered at discounted rates.
Employees can purchase additional insurance for themselves, spouses, and children.Employees can purchase home, renters, auto, and pet insurance, at a discounted rate, through various providers. Amazon has an exclusive platform for employees which makes it easy to compare rates.
Time Off
Amazon’s paid time off (PTO)and vacation will vary and is based on your situation at the time of hire. Amazon allows employees to take a leave of absence for illness or to tend to the illness of an immediate family member. This may be granted as unpaid time off.
Pregnancy, Parental, and Shared Leave
All full–time employees (40 hours/week) or reduced time (30–39 hours/week) are eligible for leave. Pregnancy leave enables mothers to take time off before and after the birth of their baby. Parental leave allows employees to take up to 6 weeks of time off for the birth or an adoption of a child. The Leave Share program allows employees to share unused Parental Leave with their partner if they do not have access to paid leave through their employer.
New moms have access to the Ramp Back Program, which allows them to gradually return to work on a reduced schedule over an 8-week period. This time can be taken immediately follow Pregnancy or Parental Leave.
Other Benefits
Full–time employees receive a discount for purchased made on Amazon.com.
MORE AMAZON INSIGHTS
AMAZON 401(K)
& ROTH CONVERSION
AMAZON
RSU
AMAZON’S OTHER BENEFITS & COMPENSATION
LATEST ARTICLES ABOUT YOUR AMAZON BENEFITS
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As an Amazon employee it is important to understand how your compensation structure works and to develop an investment strategy. The way you are compensated in your first two years of employment looks very different than how you are compensated in years three, four,...
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