Beginner’s Guide to Billing and Pricing — AWS Cloud Practitioner Study Guide

4 min readAug 5, 2022
AWS Pricing
AWS Pricing

3 Pricing Models

  1. Pay as you go: Pay for how much use without any contracts
  2. Save when you reserve: You can schedule when you want to use an instance.
  3. Pay less by using more: You get discounts automatically based on volume

CapEx vs OpEx

Capital Expenditure (CapEx): Pay upfront. It’s a fixed, sunk cost

Operational Expenditure (OpEx): Pay for what you use

  • Ex. Utility billing like electricity, gas, water, etc

3 Pricing Concepts

  • Compute: Charged by hour/second, varies by instance type
  • Storage: Charged typically per GB
  • Data Transfer: Charged typically per GB, Outbound is aggregated and charged, Inbound has no charge (with some exceptions)

Where to Find Pricing Information on AWS Services

  • AWS Simply Monthly Calculator
  • AWS Services product pages
  • AWS Pricing API

How Amazon Lambda Pricing Works

  • Charged by number of requests for your function and time it takes to run them
  • Free for first 1 million requests and up to 3.2 million seconds of compute time per month
  • 1 or 3 year term available via Compute Savings Plan

How Amazon EC2 Pricing Works

On-Demand Instances

  • Charged by hour/second
  • Great for short-term, unpredictable workloads

Reserved Instances

  • Discount for 1–3 year commitments
  • Great for applications with steady state usage

Dedicated Hosts

  • Physical server dedicated to you
  • Great for applications with specific compliance requirements

Spot Instances

  • Spare AWS capacity for up to 90% discount
  • Great for applications with flexible start and end times and urgent computing needs for large amount of capacity

Amazon EC2 Savings Plans

  • Reduce your compute costs by committing to a consistent amount of compute usage for a 1 or 3 year term. Savings of up to 66% over On-Demand costs

How Amazon S3 Pricing Works


  • Pay for how much you use
  • Rate is based on object’s size, storage class, and how long it’s stored

Requests and Data Retrievals

  • Pay for requests made to the objects/buckets

Data Transfer

  • Pay for data that you transfer into and out of Amazon S3
  • No cost to transfer data between different S3 buckets or from S3 to other services within same region
  • No cost for data transferred into Amazon S3 from the internet or out to Amazon CloudFront
  • No cost for data transferred out to an Amazon EC2 instance in the same AWS Region as the Amazon S3 bucket

Management and Replication

  • Pay for storage management features that you have enabled on your account’s Amazon S3 buckets like Amazon S3 inventory, analytics, and object tagging

How Amazon EBS Pricing Works


  • Charged by hour/second
  • Varies by volume type


  • Charged by space consumed in Amazon S3
  • Charged for volume copied across regions

Data Transfer

  • Inbound data transfer is free
  • Outbound data transfer charges are tiered

AWS Services with No Charge

  • Amazon VPC
  • Elastic Beanstalk
  • Auto Scaling
  • AWS CloudFormation
  • AWS Identity and Access Management (IAM)

AWS Free Tier

Definition: Gain free hands-on experience on the AWS platform by signing up for an AWS account. Free for 12 months.

Billing Alarm

Definition: Automatically alerts you when a certain amount of AWS spend has been reached

  • Notifications are sent via email when the bill hits a specified money amount
  • Billing alarm uses an SNS topic aka an email notification
  • Go to CloudWatch to set up automatic billing notifications
AWS Pricing Tools
AWS Pricing Tools

5 Pricing Tools

AWS Budgets

Definition: Set custom budgets that alerts you when your costs exceed your budgeted amount

AWS Simple Monthly Calculator

  • Estimate your monthly bill
  • Per-service cost breakdown
  • Aggregate monthly estimate
  • Provides common customer examples

AWS Cost Explorer

Definition: Analyze usage and cost over time, as well as forecast

  • Use tags like “project: secretProject” to see what resources are being used by a project

AWS Cost and Usage Report

Definition: Comprehensive information on cost and usage

  • Lists usage for each service category used by an account and its IAM users

AWS Pricing Calculator

Definition: Get an estimate for your specific use cases. The estimate can be save and shared with your team.

AWS Organizations

Definition: Manage multiple AWS accounts from a central location

  • Provides consolidate billing so you receive a single bill for all AWS accounts in the organization. This allows you to share bulk discount pricing.

How to get Support or Information related to Billing

  • Cost Explorer
  • Cost and Usage Report
  • QuickSight
  • Open a billing support case
  • Work with you Technical Account Manager if you company has Enterprise Support Plan
AWS Support Plans
AWS Support Plans

4 AWS Support Plans

  1. Basic: Free customer service, support forums, documentation, limited Trust Advisor checks
  2. Developer: Business hour access for 1 person with unlimited cases, best practice guidance, building block architecture support
  3. Business: 24x7 service for unlimited people and support cases, use case guidance, 3rd party software support, All Trusted Advisor checks
  4. Enterprise: Assigned Technical Account Manager (TAM), white glove case-routing, infrastructure event management

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