AWS Lambda is a serverless computing service that enables developers to run code without managing servers or infrastructure. It automatically scales and executes code in response to events and triggers, making it highly scalable, reliable, and cost-effective. This allows developers to focus on writing code instead of managing infrastructure. If you're interested in learning more about how to deploy an Express application using AWS Lambda, check out this blog Deploy Express JS App To AWS Lambda Using The Serverless

Let’s understand what is Lambda, how AWS bills you, its structure, and different billing models. We will also compare billing of Lambda and other AWS services and how you can host a serverless website without incurring any infrastructure cost.

Visualizing AWS Lambda Pricing: Screenshots of Compute Free Tier for GB-Seconds and Requests in US West (Northern California)

What is Lambda billing?

Lambda billing is based on the number of computing resources used by your functions. AWS bills you on two parameters:

  1. Number of requests made to your function
  2. Duration of each request

This means that you are charged for the time it takes for your function to execute, as well as the number of times your function is invoked.

In addition to these charges, AWS also charges for data transfer in and out of your Lambda function. This includes data transfer over the internet and between AWS services. If your function uses other AWS services, such as Amazon S3 or Amazon DynamoDB, you may incur additional charges for these services.

AWS Lambda Pricing Structure:

AWS Lambda has a simple and flexible pricing structure that is based on two factors: duration-based billing and request-based billing.

Duration-based billing:

Let's say you have a Lambda function configured with 256 MB of memory and run for 3 seconds each time it is invoked. This means that for each execution, you will be charged for 0.75 GB-seconds (3 seconds x 256 MB of memory). If you receive 1 million requests to this function in a month, and each request takes 3 seconds to execute, your total duration-based billing cost would be:

0.75 GB-seconds per request x 1 million requests = 750,000 GB-seconds

750,000 GB-seconds x $0.00001667 per GB-second = $12.5025

Request-based billing:

Let's say you have a Lambda function configured to run for 1 second and receive 10 million requests to this function in a month. In this case, your total request-based billing cost would be:

10 million requests x $0.20 per 1 million requests = $2.00

The exact cost of running a Lambda function will depend on various factors such as memory size, execution time, and the number of requests. However, these examples should give you an idea of how the pricing factors work in practice.

AWS also offers different pricing models for Lambda functions based on the amount of usage. For example, AWS offers a free tier that includes one million requests per month and up to 400,000 GB-seconds of compute time per month. Beyond the free tier, AWS offers a tiered pricing model where the cost per request and per GB-second decreases as usage increases. This means that as you use more Lambda functions, the cost per function decreases.

Different types of billing models for AWS Lambda :

AWS Lambda offers different types of billing models to suit different use cases and workloads. The following are the different types of billing models available for Lambda in AWS:

Free tier:

AWS Lambda offers a free tier with 1 million free requests and 400,000 GB-seconds of compute time per month for 12 months. Additionally, you get 5GB of AWS S3 storage and 1 million free AWS Lambda requests per month.

Once your Lambda workload exceeds the free tier limits, you must choose a different billing model to optimize costs for the remainder of your usage. Depending on your workload's specific needs and usage patterns, you can choose the most cost-effective billing model from the available options, such as pay-per-request, reserved instances, or spot instances.

Pay-per-request billing:

With pay-per-request billing, you are charged for the number of requests your Lambda function receives and executes. This means you will not be charged if your function is not being used. The pricing for this model starts at $0.20 per 1 million requests.

Reserved instance pricing:

Reserved instances allow you to reserve a specific amount of compute capacity for your Lambda function for a fixed term (usually 1-3 years). Doing so can benefit from significant cost savings, as you pay a lower hourly rate for the compute capacity you reserve. Reserved instance pricing is best suited for workloads with predictable usage patterns, where you can estimate the compute capacity you need in advance. The pricing for this model starts at $0.00001667 per GB-second.

Spot instances pricing:

Spot instances allow you to bid on unused EC2 capacity and use it to run your Lambda functions. Spot instances pricing is typically much lower than the other pricing models. However, it's important to note that AWS can reclaim the capacity at any time if the spot price exceeds your bid. This model is ideal for workloads that are flexible in terms of timing and can tolerate occasional interruptions. The pricing for this model varies based on the spot price of the EC2 instances you use.

Lambda Performance in CloudWatch: Screenshot of Lambda Insights displaying metrics like Function Cost, Duration, and Invocations with specific function names.

How to choose billing model for your Lambda function?

Choosing a billing model for your Lambda function depends on your workload's specific needs and usage patterns. Here are some factors to consider when choosing a billing model:

Usage patterns:

Consider the expected usage patterns of your Lambda function. The pay-per-request model may be more cost-effective if you expect high usage volumes. If predictable and consistent usage patterns, reserved instances may be more cost-effective.


Consider the flexibility of your workload. If your workload can tolerate occasional interruptions, the spot instances model may be more cost-effective. If you need consistent performance, reserved instances may be a better option.


Consider your budget and cost expectations. Pay-per-request is a good option for workloads with unpredictable usage patterns and low budgets, while reserved instances are better for workloads with predictable usage and larger budgets.

Integration with other AWS services:

Consider the integration of your Lambda function with other AWS services. Depending on the services you use, you may be able to take advantage of certain pricing models or discounts. One example of a pricing model that can be beneficial when integrating your Lambda function with other AWS services is the AWS Data Transfer pricing model.

Suppose your Lambda function interacts with AWS services that generate data transfer costs, such as Amazon S3, Amazon DynamoDB, or Amazon API Gateway. In that case, you can reduce these costs using AWS Data Transfer pricing.

It's important to remember that AWS also offers a free tier for Lambda usage. This means that if your workload falls within the free tier limits, you may be able to use other billing models as per requirements. However, keeping track of your usage and monitoring your costs, even within the free tier, is important to avoid unexpected charges.

Overall, it's important to monitor your usage and costs carefully and regularly evaluate the pricing model that best suits your workload requirements and usage patterns. AWS provides tools and features such as Cost Explorer and AWS Budgets to help you monitor and manage your costs effectively.

Best practices for managing Lambda costs:

Use a smaller memory allocation:

The amount of memory you allocate to your function affects its execution time and cost. By using a smaller memory allocation, you can reduce the cost of each request.

Reduce the duration of each request:

You can optimize your code to reduce the duration of each request. This will help you save on execution time and reduce your overall costs.

Use reserved concurrency:

Reserved concurrency allows you to reserve a specific number of concurrent executions for your function. This can help you manage your costs by limiting the number of requests your function can receive simultaneously.

Use the AWS Serverless Application Model (SAM):

The AWS Serverless Application Model (SAM) provides a framework for building serverless applications. It includes features such as automatic scaling and cost optimization, which can help you reduce your Lambda costs.

Comparing Lambda to other AWS services in terms of cost and billing :

AWS Lambda is a serverless compute service, which means it has a unique pricing model compared to other AWS services. While services like EC2 and RDS have an hourly billing model and charge for the use of resources, AWS Lambda has a pay-per-use model based on the number of requests and duration of execution. This means that you only pay for the actual compute time consumed by your function and do not need to worry about managing any underlying infrastructure.

AWS Elastic Beanstalk, another compute service offered by AWS, has a pricing model based on the resources used, including instances, storage, and data transfer. This means that you are charged based on the size and configuration of your infrastructure.

The key difference between AWS Lambda and other compute services is that Lambda is event-driven and scales automatically, while other services require manual scaling and management. Additionally, Lambda is ideal for short-lived and intermittent workloads that don't require continuous resources, while other services are better suited for long-running, persistent workloads.

How Seaflux Utilizes AWS Lambda Free Tier to Power Its Website :

Seaflux has been utilizing AWS Lambda's free tier to power its website built using Angular and Node.js. By leveraging Lambda's serverless computing capabilities, Seaflux has developed and deployed its website without incurring any infrastructure costs. The free tier allows Seaflux to receive up to 1 million requests and 400,000 GB-seconds of compute time per month, which is more than enough to support its current traffic. Additionally, Lambda's automatic scaling feature ensures that the website can handle sudden traffic spikes without downtime or performance issues. Using Lambda's free tier, Seaflux has built a cost-effective and scalable website that provides a seamless user experience to its customers.

End Note :

In conclusion, understanding the billing model for AWS Lambda is critical to effectively and efficiently manage costs for serverless applications. By keeping track of usage, optimizing memory size, leveraging cost management tools, and implementing best practices for cost optimization, developers can ensure that their AWS Lambda applications are cost-effective and performant. By taking the time to implement cost optimization strategies and continually monitoring and adjusting as needed, developers can achieve the benefits of serverless computing without breaking the bank. Ultimately, the key to the successful and cost-effective use of AWS Lambda is a combination of knowledge, planning, and ongoing optimization efforts.

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Jay Mehta - Director of Engineering
Jay Mehta

Director of Engineering

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