Amazon

Amazon's 401(k) plan is administered through Fidelity and offers a 50% match on the first 4% of eligible pay, effectively providing a maximum employer contribution of approximately 2% of salary (capped at roughly $7,200 in 2026). Critically, the employer match is subject to a three-year cliff vesting schedule, meaning employees who leave before completing three years of service forfeit 100% of the match. After the three-year mark, all future match contributions vest immediately.

The plan supports traditional pre-tax, Roth, and after-tax contributions. Amazon's plan does allow the Mega Backdoor Roth strategy through after-tax contributions and in-plan Roth conversions. After maxing the standard elective deferral ($24,500 in 2026) and accounting for the employer match, employees can contribute additional after-tax dollars up to the Section 415(c) limit ($72,000 in 2026 for those under 50). Investment options include target-date funds, low-cost index funds, and a BrokerageLink self-directed brokerage window.

Amazon's RSU vesting schedule is the most distinctive in big tech: 5% in year one, 15% in year two, 40% in year three, and 40% in year four. This dramatic back-loading means 80% of the initial grant vests in years three and four, creating significant income volatility and tax planning complexity. RSUs vest quarterly (in February, May, August, and November) for L4–L7 employees.

Annual refresh grants are awarded during Q1 compensation reviews and typically vest over two years, which helps smooth total compensation as initial grants expire. Amazon does not offer a traditional ESPP with a discount; instead, it provides a Direct Stock Purchase Plan through Computershare with no discount on shares. A 2025–2026 pilot program allows eligible employees to convert 25% of vesting RSUs to cash at a predetermined price, providing partial downside protection.

Amazon offers comprehensive medical, dental, and vision coverage starting on day one, with employee-only medical premiums as low as $5 per week. Prescription drug benefits through Amazon Pharmacy include $5 for 30-day supplies and free chronic-condition medications. Mental health support includes six free counseling sessions per issue per year through the Employee Assistance Program.

Paid time off starts at 10 vacation days in year one, increasing to 15 in year two and 20 after year five, plus six personal days and seven paid holidays. Birthing parents receive up to 20 weeks of paid leave (including prepartum, postpartum disability, and parental leave). Amazon's Leave Share Program allows employees to transfer six weeks of leave to a spouse or partner whose employer does not offer parental leave.

As a publicly traded company (AMZN), Amazon enforces quarterly trading blackout periods that typically begin two to three weeks before the end of each fiscal quarter and end when quarterly earnings are publicly announced. Open trading windows last approximately six to eight weeks per quarter. Amazon reports earnings in late January, late April, late July, and late October.

During blackout periods, employees at L7 and above, along with those in finance, accounting, investor relations, and other roles with access to material nonpublic information, are prohibited from buying or selling AMZN stock or changing RSU tax withholding elections. Restrictions extend to spouses, dependent children, and entities controlled by the employee. Rule 10b5-1 trading plans can be established during open windows with a 30–90 day cooling-off period before the first trade executes.

Amazon historically capped base salaries at $160,000 but raised the cap to $350,000 in 2022 to remain competitive for senior talent. Software Development Engineer total compensation ranges from approximately $188,000 at L4 (SDE I) to $568,000 at L7 (Principal), with L6 Senior SDEs earning a median of around $396,000. Sign-on bonuses are paid monthly (not as a lump sum) and are designed to offset the back-loaded RSU vesting, with year-one bonuses typically larger than year-two bonuses.

The back-loaded vesting schedule creates a critical planning event at the year four–five transition: when the initial RSU grant fully vests, total compensation can drop sharply unless sufficient refresh grants have been awarded. Employees should model expected compensation five years out and build cash reserves before years where income may decline significantly.