Amazon raises starting hourly pay to $20 and adds Whole Foods discount

Amazon is raising its minimum starting wage for full-time US warehouse and logistics workers to $20 an hour, a $1 bump that comes just before the busy holiday shopping season.

The pay rise, which takes effect on 27 September, will cost the company more than $1.5 billion. Amazon said the change will push average pay for these front-line employees to nearly $24 an hour, or more than $32 an hour when accounting for benefits like healthcare and prepaid tuition.

Along with the pay rise, the company is rolling out new perks to help staff cope with the cost of living. Starting on 1 October, all US employees will get an uncapped 10% discount on groceries and everyday essentials ordered online through Amazon and Whole Foods, as well as a 20% discount inside physical Whole Foods stores.

Udit Madan, Amazon’s senior vice-president of worldwide operations, announced the changes, framing them as an annual reassessment of how to support the workforce. "I'm excited about how these investments work together to help our employees and their families continue to thrive for the long run," Madan wrote in a company blog post.

What are the new Amazon pay rates and benefits?

The baseline starting wage for core operations roles across the US is now $20 an hour, up from $19. With annual "step plans" in place, Amazon says workers will see guaranteed pay increases over their first three years with the company.

The grocery discount can be combined with existing Prime membership deals. It applies to any purchase made through an employee's personal Amazon account and covers fresh food and daily household essentials.

Amazon is also launching a lifetime banking programme called Day 1 Financial. Partnering with First Tech Federal Credit Union, the service offers checking and savings accounts with no monthly fees, no overdraft charges, and no minimum balance requirements.

Crucially, employees do not need a credit history to open an account, and they can keep using the bank even if they leave Amazon. Their spouses and children are also eligible for the lifetime benefit. The programme will start rolling out late this year, with wider availability in 2027.

How does Amazon pay compare to Walmart and Target?

The wage hike keeps Amazon competitive in a tight retail labour market. With 1.1 million US employees, Amazon is the country's second-largest private employer, trailing only Walmart.

The new $20 minimum matches Costco, which set its starting wage at that level in 2025. It also puts Amazon comfortably ahead of Target, where starting pay sits at $15, and Walmart, which pays a starting wage of $14 to its store employees.

However, Walmart still holds an edge in its distribution centres, where warehouse and supply network workers earn an average starting wage of $24.75 an hour. But Amazon's added perks, including the newly announced grocery discounts and existing benefits like a free Prime membership, represent a heavy push to retain workers as the autumn hiring rush begins.