How Do You Share EC2 Savings Plans Across AWS Organizations?

Sharing Amazon EC2 Savings Plan discounts across multiple member accounts within an AWS Organization is managed through the AWS Billing and Cost Management console by enabling consolidated billing and turning on discount sharing in your organization's management account. By default, AWS automatically shares Savings Plans across all accounts in an organization that has consolidated billing enabled, ensuring that unused commitments in the purchasing account are applied to eligible usage in other member accounts to maximize cost savings. This article covers the prerequisites for sharing discounts, how discount application prioritization works, and the exact steps to configure or verify sharing preferences across your organization.

Prerequisites for Sharing Savings Plans

Before your member accounts can benefit from shared Amazon EC2 Savings Plans, your AWS environment must meet a few structural requirements:

  1. AWS Organizations with Consolidated Billing: All accounts must be part of a single AWS Organization with the "All features" or "Consolidated billing" feature set enabled.
  2. Management Account Access: Only the management account (formerly known as the master account) has the permissions required to enable or disable Reserved Instance and Savings Plans discount sharing across member accounts.
  3. Active Savings Plans: At least one account within the organization (either the management account or a member account) must own an active Compute Savings Plan or EC2 Instance Savings Plan.

How AWS Applies Shared Savings Plan Discounts

Understanding the order in which AWS applies Savings Plan commitments helps you predict how costs are distributed across your accounts. AWS evaluates usage and applies discounts every hour based on two main rules:

1. Account Affinity First

A Savings Plan always applies first to the eligible usage within the specific AWS account that purchased the plan. Only when the purchasing account's hourly usage is less than the hourly commitment does the remaining commitment become available to other accounts in the AWS Organization.

Mathematically, if \(C\) represents your hourly Savings Plan commitment and \(U_{\text{owner}}\) represents the discounted cost of eligible usage in the purchasing account during a given hour, the shared hourly commitment \(S\) available to the rest of the organization is:

\[S = \max(0, C - U_{\text{owner}})\]

2. Highest Discount Percentage Next

When surplus commitment (\(S > 0\)) is shared across the organization, AWS applies it to eligible usage in other member accounts (provided those accounts have sharing enabled) starting with the usage that receives the largest discount percentage compared to On-Demand rates. If multiple member accounts have usage that qualifies for the exact same discount percentage, the commitment is distributed proportionally across those accounts.

Step-by-Step Guide to Enable Savings Plan Sharing

Because Reserved Instances and Savings Plans share the same preference toggle in AWS Billing, turning on sharing enables it for both commitment types simultaneously. Follow these steps to verify or enable sharing across your member accounts:

  1. Sign in to the AWS Management Console using your organization's management account credentials.
  2. Open the AWS Billing and Cost Management console.
  3. In the left navigation pane, under Preferences and Settings, choose Billing preferences.
  4. Locate the Reserved Instances and Savings Plans discount sharing section and select Edit.
  5. Ensure that Reserved Instances and Savings Plans discount sharing is enabled for the accounts you want to include in the shared pool:
    • To share discounts across the entire organization, make sure all member accounts have sharing turned On.
    • To exclude specific accounts from either giving or receiving Savings Plan discounts, toggle sharing Off for those individual accounts.
  6. Select Save preferences to apply your changes.

Changes to discount sharing preferences take effect at the beginning of the next billing hour.

Centralized vs. Decentralized Purchasing Strategies

When managing EC2 Savings Plans across an AWS Organization, you can choose between two primary purchasing models:

  • Centralized Purchasing (Recommended): Buy all EC2 and Compute Savings Plans inside the management account or a dedicated financial operations (FinOps) member account that runs zero compute workloads (\(U_{\text{owner}} = 0\)). Because the purchasing account has no eligible EC2 usage of its own, 100% of the hourly commitment (\(S = C\)) immediately flows into the shared organizational pool and automatically targets the highest-discount workloads across all member accounts.
  • Decentralized Purchasing: Individual business units purchase Savings Plans directly within their respective member accounts. The owning business unit gets priority on the discount for its own workloads, and any unused hourly commitment spills over to benefit other teams in the organization.

Monitoring Shared Discounts

To track how your Savings Plans are being utilized across member accounts, use the Savings Plans Utilization report and Savings Plans Coverage report in AWS Cost Explorer:

  • Utilization Report: Shows the percentage of your total commitment that is actively reducing EC2 usage costs across the organization versus going unused.
  • Coverage Report: Shows how much of your organization's total eligible EC2 spend is covered by Savings Plans versus running at On-Demand rates. You can group this view by Linked Account to identify which member accounts are consuming the shared discounts.