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• 💰 AWS Lambda Pricing – Complete Explanation
  • 1️⃣ Big Picture: How AWS Lambda Charges You
  • 2️⃣ What Exactly Do You Pay For?
  • 3️⃣ Request Pricing (Invocation Cost)
    • What is a request?
    • Free Tier (Very Important)
    • Example
  • 4️⃣ Duration Pricing (Execution Time)
    • How Duration Is Measured
    • What Affects Duration?
  • 5️⃣ Memory-Based Pricing (Key Concept)
  • 6️⃣ How AWS Calculates Duration Cost
    • Example 1️⃣
    • AWS Price (approx)
  • 7️⃣ Free Tier for Duration
  • 8️⃣ Full Cost Example (Very Important)
    • Scenario
    • Step 1: Request Cost
    • Step 2: Duration Cost
    • 💵 Total Monthly Cost
  • 9️⃣ Why Increasing Memory Can REDUCE Cost (Exam Favorite)
    • Example
  • 🔟 Lambda Pricing vs EC2 Pricing
    • EC2
    • Lambda
  • 1️⃣1️⃣ Additional Lambda-Related Costs (Important)
  • 1️⃣2️⃣ Lambda Pricing with VPC (Hidden Cost)
  • 1️⃣3️⃣ Cost Optimization Best Practices
  • 1️⃣4️⃣ Lambda Pricing in Exams (Key Points)
  • 1️⃣5️⃣ One-Line Exam Definition
  • 1️⃣6️⃣ Mental Model to Remember Forever
  • 1️⃣7️⃣ Final Summary (Must Remember)

💰 AWS Lambda Pricing – Complete Explanation

1️⃣ Big Picture: How AWS Lambda Charges You

AWS Lambda follows a pay-per-use model.

You pay only when your code runs.

You do NOT pay for:

• Idle time
• Servers
• OS
• Scaling
• Availability

This is the core advantage of serverless.

2️⃣ What Exactly Do You Pay For?

Lambda pricing has 3 main components:

1️⃣ Number of requests 2️⃣ Execution duration (time) 3️⃣ Memory allocated (which also controls CPU)

Let’s break each one slowly.

3️⃣ Request Pricing (Invocation Cost)

What is a request?

Every time your Lambda function is triggered → 1 request.

Triggers include:

• API Gateway call
• S3 upload
• Scheduled event
• SQS message

Free Tier (Very Important)

AWS Free Tier includes:

• 1 million free requests per month

After free tier:

• $0.20 per 1 million requests

📌 This is extremely cheap.

Example

If your Lambda is invoked:

• 5 million times per month

Cost:

First 1 million → Free
Remaining 4 million → 4 × $0.20 = $0.80

✔ Less than 1 dollar

4️⃣ Duration Pricing (Execution Time)

This is the most important part of Lambda pricing.

How Duration Is Measured

Lambda charges based on:

• Execution time
• Rounded to the nearest millisecond
• From function start → function end

What Affects Duration?

• Code efficiency
• Memory allocated
• Cold starts
• External service calls

5️⃣ Memory-Based Pricing (Key Concept)

When you configure a Lambda function, you choose:

• Memory size (128 MB → 10,240 MB)

📌 CPU power scales proportionally with memory

So:

• More memory = more CPU = faster execution
• Faster execution can reduce total cost

6️⃣ How AWS Calculates Duration Cost

Lambda pricing unit:

GB-seconds

Formula:

Memory (GB) × Execution time (seconds)

Example 1️⃣

• Memory: 512 MB = 0.5 GB
• Execution time: 2 seconds

Cost unit:

0.5 × 2 = 1 GB-second

AWS Price (approx)

• $0.0000166667 per GB-second

So:

1 GB-second × $0.0000166667

Very small cost.

7️⃣ Free Tier for Duration

AWS Free Tier also includes:

• 400,000 GB-seconds per month

This is a lot.

Meaning:

• Small workloads often cost $0

8️⃣ Full Cost Example (Very Important)

Let’s calculate a realistic Lambda cost.

Scenario

• Requests: 2 million/month
• Memory: 1024 MB (1 GB)
• Execution time: 500 ms (0.5 sec)

Step 1: Request Cost

2M requests
1M free
1M paid → $0.20

Step 2: Duration Cost

Per request:

1 GB × 0.5 sec = 0.5 GB-seconds

Total:

0.5 × 2,000,000 = 1,000,000 GB-seconds

Free tier:

400,000 GB-seconds free

Paid:

600,000 GB-seconds × $0.0000166667 ≈ $10

💵 Total Monthly Cost

$0.20 + $10 = ~$10.20

✔ For 2 million executions ✔ No servers ✔ Auto scaling

9️⃣ Why Increasing Memory Can REDUCE Cost (Exam Favorite)

This feels confusing at first.

Example

Even though memory cost is higher:

• Execution is much faster
• Total GB-seconds reduced

📌 Always benchmark memory vs duration

🔟 Lambda Pricing vs EC2 Pricing

EC2

• Pay per hour
• Pay even when idle
• Manual scaling

Lambda

• Pay per execution
• Zero idle cost
• Automatic scaling

👉 Lambda is cheaper for:

• Spiky traffic
• Low/medium workloads
• Event-driven apps

1️⃣1️⃣ Additional Lambda-Related Costs (Important)

Lambda itself is cheap, but other services may add cost:

• API Gateway
• CloudWatch Logs
• NAT Gateway (if Lambda in VPC)
• Data transfer

📌 Exams often ask:

“Why is Lambda suddenly expensive?”

Answer: ➡ NAT Gateway data charges

1️⃣2️⃣ Lambda Pricing with VPC (Hidden Cost)

If Lambda runs inside a VPC:

• Internet access requires NAT Gateway
• NAT Gateway is expensive

Best practice:

• Avoid VPC unless required
• Use VPC endpoints where possible

1️⃣3️⃣ Cost Optimization Best Practices

✔ Optimize memory size ✔ Reduce execution time ✔ Avoid unnecessary logs ✔ Use async processing ✔ Avoid NAT Gateway if possible ✔ Use caching (DynamoDB / Redis)

1️⃣4️⃣ Lambda Pricing in Exams (Key Points)

You must remember:

• Pay per request
• Pay per duration
• Memory affects CPU
• Free tier exists
• No cost when idle

1️⃣5️⃣ One-Line Exam Definition

AWS Lambda pricing is based on the number of requests and the execution duration measured in GB-seconds, with a generous free tier.

1️⃣6️⃣ Mental Model to Remember Forever

Cost = How often × How long × How big

• How often → Requests
• How long → Duration
• How big → Memory

1️⃣7️⃣ Final Summary (Must Remember)

• Lambda is extremely cost-effective
• Pay only when code runs
• Memory and time decide cost
• Free tier covers most small apps
• NAT Gateway is the biggest hidden cost