Amazon announced Wednesday it has invested $1 billion toward higher wages and better benefits for its employees.
The company said the average hourly pay for its fulfillment and transportation employees will increase to more than $23, excluding benefits; if an employee worked 40 hours a week, 52 weeks a year, they would earn just less than $48,000 if their wage was $23 an hour. Inclusive of benefits, the company estimates that the average employee earns more than $30 an hour.
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Amazon said it has also changed its step plan—which sees employees’ pay increasing for each additional year they spend with Amazon—so that the company can issue larger pay increases between years than it previously had. It did not specify the exact changes it made to that plan.
In September 2024, the company said it had increased compensation to average out at $22 an hour excluding benefits and $29 an hour including benefits, so its latest announcement represents a $1 per hour change year over year. In 2024, the company said it had allocated $2.2 billion to those wage increases. In 2023, Amazon said its $1.3 billion investment in pay increases brought the average hourly pay to $20.50 per hour.
The federal minimum wage stands at $7.25, though 34 U.S. states, territories and districts have put minimum wages higher than the federal level into effect, according to the National Conference of State Legislatures.
In addition to its straight-up wage increase promises, Amazon has further invested in providing lower-cost benefits to its employees, it said. For its entry-level healthcare package, Amazon employees will see $5 per week deducted from their pay; the company also said that, for standard visits, employees will pay a $5 copay. Those changes will take effect in 2026, and the e-tail giant said the new plan will see a 34 percent reduction in employees’ weekly contributions to health plans and an 87 percent reduction in the copays they dole out for primary care, mental health and non-specialist visits.
Udit Madan, senior vice president, Amazon Worldwide Operations, said the company’s attention to benefits helps it stand out as an employer in the e-commerce realm.
“We know that things like health care, education and retirement contributions play a critical role in employees’ and their families’ long-term wellbeing,” Madan wrote in the blog announcing the updates. “Benefits like that are still too rare in our industry, but we strongly believe that investing in them is the right thing to do for our teammates. And we’ve continued to invest through the years to make them even better.”
The e-tail giant’s announcement comes ahead of the holidays, which it said remain “a time when we’re reminded just how much the work that our teams do matters.”
Madan said the company’s yearly practice of upgrading employee pay is an example of its commitment to “constantly listening and working to keep getting better, every day, together.”
“These investments are part of our ongoing commitment to making Amazon a place where people can thrive, and I look forward to delivering the future together,” he wrote.
