4.1 AWS Pricing Models

AWS Certified Cloud Practitioner CLF-C02

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1 Introduction

About the AWS Cloud Practitioner (CLF-C02) Exam Study Strategies and Exam Tips

2 Domain 1: Cloud Concepts (24%)

1.1 What Is Cloud Computing? 1.2 Cloud Deployment Models 1.3 AWS Well-Architected Framework 1.4 Cloud Migration Strategies 1.5 Cloud Economics

3 Domain 2: Security and Compliance (30%)

2.1 The AWS Shared Responsibility Model 2.2 AWS Identity and Access Management (IAM) 2.3 AWS Security Services 2.4 Compliance and Governance 2.5 Network Security

4 Domain 3: Cloud Technology and Services (34%)

3.1 AWS Compute Services 3.2 AWS Storage Services 3.3 AWS Database Services 3.4 AWS Networking and Content Delivery 3.5 Management and Governance Services 3.6 AI/ML and Analytics Services 3.7 Application Integration and Other Services

5 Domain 4: Billing, Pricing, and Support (12%)

4.1 AWS Pricing Models 4.2 Billing and Cost Management Tools 4.3 AWS Support Plans 4.4 Additional Billing Concepts and Services

6 AWS Services Deep Dive

5.1 Compute Services Deep Dive 5.2 Storage and Database Deep Dive 5.3 Security Services Deep Dive 5.4 Architecture Best Practices and Design Principles 5.5 Practice Exam — Mixed Domain Questions

4.1 AWS Pricing Models

Key Takeaways Explain This Topic AI

AWS uses a pay-as-you-go pricing model — you pay only for the services you consume with no upfront commitments.

Three fundamental pricing drivers: compute (per hour/second or per request), storage (per GB per month), and data transfer (outbound per GB, inbound is free).

Data transfer INTO AWS is always free; data transfer OUT of AWS to the internet is charged per GB.

Reserved Instances and Savings Plans provide up to 72% savings over On-Demand for predictable workloads.

Since July 15, 2025, new AWS accounts get up to $200 in Free Tier credits on a Free plan (up to 6 months) or a Paid plan; 30+ services are always free within monthly limits, and the 12-months-free type is legacy.

Last updated: October 2026

Quick Answer: AWS pricing rests on three drivers — compute (per hour/second/request), storage (per GB-month), and data transfer (outbound per GB; inbound is free). You cut costs with Reserved Instances and Savings Plans (up to 72% off) for steady workloads and Spot Instances (up to 90% off) for interruptible ones. The Free Tier gives new accounts up to $200 in credits on a Free or Paid plan, keeps 30+ services always free within monthly limits, and still covers older accounts under the legacy 12-months-free model.

The AWS Pricing Philosophy

AWS pricing follows three principles tested directly on the exam:

Pay-as-you-go — pay only for what you use, when you use it, with no long-term contracts required.

Pay less when you reserve — commit to 1- or 3-year usage for substantial discounts.

Pay less as AWS grows — economies of scale lower AWS's costs, and those savings are passed to customers through frequent price reductions.

Three Fundamental Pricing Drivers

Driver How You Are Charged Examples
Compute Per hour, per second, or per request EC2 (per second), Lambda (per request + duration)
Storage Per GB stored per month S3 (per GB), EBS (per GB provisioned)
Data Transfer Per GB transferred out of AWS Outbound to internet, cross-Region transfer
Data Transfer Rules

Transfer Type Cost
Data IN to AWS (from internet) Free
Data OUT to internet Charged per GB
Between AZs (same Region) Charged (small)
Between Regions Charged per GB
Within the same AZ (private IP) Free

On the Exam: Data IN = FREE, Data OUT = CHARGED. This is one of the most repeated billing facts. Private-IP traffic within a single AZ is also free, which is why keeping chatty components in the same AZ saves money.

AWS Free Tier

AWS changed the Free Tier on July 15, 2025 . Accounts created since then use the current model below; accounts created earlier keep the Legacy Free Tier , which is the model many older study materials describe.

1. Credits on a Free plan or a Paid plan (new accounts)

New customers get $100 in credits when they sign up and can earn up to $100 more by exploring key services, for up to $200 in total.

On the Free plan , you can use over 90 services for up to 6 months with no charges. The account closes after 6 months or when the credits run out, whichever comes first, unless you upgrade to the Paid plan.

The Paid plan gives access to all AWS services at pay-as-you-go rates. New Paid-plan customers are also eligible for up to $200 in credits, and selected services offer short-term trials .

2. Always Free (both plans)

More than 30 services stay free within monthly usage limits, regardless of account age:

Service Free Amount
AWS Lambda 1M requests/month + 400,000 GB-seconds
Amazon DynamoDB 25 GB storage + 25 WCU + 25 RCU
Amazon CloudWatch 10 custom metrics, 10 alarms
Amazon SNS 1M publishes
Amazon SQS 1M requests
AWS CloudFormation Free (pay only for resources created)
IAM Always free
3. Legacy Free Tier (accounts created before July 15, 2025)

The older program had three offering types: 12 months free (for example, 750 hours a month of a t2.micro or t3.micro EC2 instance and 5 GB of S3 Standard storage for one year from account activation), always free , and short-term trials . It still applies to accounts created before July 15, 2025.

On the Exam: Lambda and DynamoDB are the classic "Always Free" examples: always-free offers do not expire with account age. Older questions may still describe the legacy "12 months free" type, such as EC2 t2/t3.micro hours, while new accounts now start with credits on a Free or Paid plan.

Pricing Models for EC2

Model Commitment Savings Best For
On-Demand None Baseline Short-term, spiky, first-time workloads
Savings Plans $/hour for 1 or 3 years Up to 72% Flexible commitment across families/Regions
Reserved Instances Specific instance, 1 or 3 years Up to 72% Steady-state, predictable workloads
Spot Instances None (can be reclaimed) Up to 90% Fault-tolerant, interruptible batch jobs
Dedicated Hosts On-Demand or Reserved Varies Compliance, BYOL licensing
Savings Plans vs. Reserved Instances

Feature Savings Plans Reserved Instances
Commitment $/hour of compute usage Specific instance attributes
Flexibility Across families, sizes, Regions, OS Locked to a specific instance type
Types Compute SP (most flexible), EC2 Instance SP Standard RI, Convertible RI
Discount Up to 72% Up to 72%

On the Exam: Both give up to 72%, but Savings Plans are more flexible . If a scenario stresses flexibility across instance families or Regions, choose Savings Plans. Spot wins only when interruptions are tolerable.

S3 Pricing Factors

Factor How It Affects Cost
Storage Class Standard > IA > Glacier > Deep Archive (cost falls)
Amount Stored Per GB per month
Requests PUT, GET, LIST (per 1,000 requests)
Data Transfer Outbound charged; inbound free
Lifecycle Transitions Small per-object cost to move between classes
Retrieval Glacier retrieval priced by speed (Expedited > Standard > Bulk)

Putting these together, the cheapest design stores rarely accessed data in a Glacier tier, keeps chatty traffic inside one AZ, and uses Savings Plans for any steady compute. The exam rewards spotting which of these levers applies to a given "most cost-effective" scenario.

A final framing that helps on exam day: ask whether the workload is predictable or interruptible . Predictable, always-on workloads justify a 1- or 3-year Savings Plan or Reserved Instance commitment. Interruptible, fault-tolerant workloads belong on Spot. New or unpredictable workloads start on On-Demand until a usage pattern emerges, at which point Cost Explorer's recommendations point to the right commitment. There is no penalty for combining models — a steady baseline on Savings Plans with spiky overflow on On-Demand or Spot is a common, exam-endorsed cost-optimization pattern.