AWS bills can be confusing, especially when the numbers don’t seem to add up. A key reason for the confusion is the blended rate—but what does that actually mean? We’ll explore how blended rates work, why they show up on your bill, and what they mean for understanding your AWS costs.
Blended rates are a pricing method AWS uses to average the cost of usage across multiple linked accounts within an organization. Instead of showing the exact rate each account paid, AWS combines the usage and spreads the total cost evenly across all accounts.
You’ll typically see blended rates in Consolidated Billing, especially when accounts share discounts like Reserved Instances or Savings Plans. What’s “blended” isn’t just the rate — it’s also the usage. That means individual account-level costs aren’t shown separately, which can make detailed cost tracking more difficult.
Note: Each member account still sees their charges as unblended costs, but AWS applies consolidated billing benefits (like reservation sharing and tiered pricing) across the entire organization. This makes high-level cost views easier, but can obscure the true cost per account — especially when usage patterns vary.
AWS blended rates are calculated by pooling usage, applying discounts at the organization level, and distributing costs back to each account using an averaged rate. Here’s how it works:
Pool usage across all accounts
Let’s say:
Account A uses 10,000 GB of Amazon S3
Account B uses 40,000 GB
Total org-wide usage = 50,000 GB
Apply volume discounts
AWS applies tiered pricing based on total usage. For example:
Calculate the blended rate
$3,500 ÷ 50,000 GB = $0.07/GB
Distribute costs back to accounts proportionally
Account A pays: 10,000 × $0.07 = $700
Account B pays: 40,000 × $0.07 = $2,800
Even though Account B used more and benefited more from discounts, both accounts see the same blended rate.
Let’s say your organization has two member accounts using Amazon EC2:
Even though Account A used prepaid Reserved Instances (which show $0.00 in unblended costs), it still receives a portion of the total cost under the blended rate model. This ensures that costs are averaged across all usage — regardless of whether they were discounted or not.
Blended rates appear in several areas of AWS cost reporting, depending on your settings and tools:
AWS Cost and Usage Reports (CUR)
By default, CUR displays blended rates for usage and cost columns.
AWS Billing Console
The AWS Billing Dashboard may show either blended or unblended rates depending on the report view:
Third-Party FinOps Tools
Many cloud cost management platforms let you toggle between blended and unblended views for better visibility.
Blended rates can be helpful — or misleading — depending on how you use them. Here's a look at the advantages and limitations.
Simplifies billing across an organization
Instead of tracking individual rates, blended pricing gives a cleaner, averaged view of costs across all linked accounts.
Helpful for consolidated reports or when explaining costs to non-technical stakeholders.
Reflects shared savings across teams
Discounts from Reserved Instances or Savings Plans are blended into the total cost — which helps show the value of these savings at the org level.
Useful for high-level budgeting and forecasting
Finance and leadership teams can use blended rates for rough budget planning without needing detailed cost breakdowns.
Can obscure actual usage and cost by account
Since everyone sees the same rate, it's hard to tell who used discounts or who actually spent more.
Complicates showback and chargeback models
If you’re trying to allocate cloud spend back to departments or teams, blended rates can make it hard to assign accurate costs.
Without adjustments, teams might get billed more or less than what they truly used.
May mislead teams about cost efficiency
A team using mostly On-Demand instances could appear more cost-efficient than one using Reserved Instances — just because of how costs are averaged.
This is why many FinOps teams prefer unblended or amortized costs when doing detailed cost analysis or optimization.
Blended rates make consolidated billing simpler, but they don’t tell the whole story. For teams that need accurate cloud cost analysis, chargeback, or accountability, it’s important to know when and how to switch between blended, unblended, and amortized views.
Understanding these differences allows organizations to manage cloud costs more fairly, transparently, and effectively — whether you're reporting to finance or optimizing workloads across teams.
