Solved: Why NAT Gateway is so expensive?

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🚀 Executive Summary

TL;DR: AWS NAT Gateway bills are often unexpectedly high due to the data processing charge, not the hourly rate, impacting traffic like S3 transfers and OS updates from private subnets. To drastically reduce these costs, implement free Gateway VPC Endpoints for S3 and DynamoDB, utilize Interface Endpoints for other AWS services, and consider architectural changes like managed proxies or eliminating unnecessary outbound internet access.

🎯 Key Takeaways

The primary driver of high NAT Gateway costs is the $0.045/GB data processing charge, not the hourly rate, for all data traversing the gateway.
Gateway VPC Endpoints for S3 and DynamoDB are free and create a private route that bypasses the NAT Gateway entirely, offering immediate and significant cost savings.
For other outbound traffic, consider Interface VPC Endpoints for specific AWS services or implement a self-managed proxy server in a public subnet to reduce data processing fees, alongside architectural shifts to minimize general internet egress.

AWS NAT Gateway bills can be a shocking surprise. Learn why these gateways are so expensive and discover three practical, real-world solutions—from quick VPC Endpoint fixes to long-term architectural changes—to slash your cloud costs for good.

I Got a $9,000 Bill From an AWS NAT Gateway. Here’s How You Can Avoid My Pain.

I still remember the Monday morning meeting. The Director of Engineering slid a printout of the latest AWS bill across the table, his finger resting on a single line item. “Darian,” he said, “explain this to me.” The line was ‘NAT Gateway – Data Processing’, and the number next to it was just shy of $9,000. My stomach dropped. It turned out a new analytics service, running on a fleet of EC2 instances in a private subnet, was pulling multi-terabyte datasets from S3 every single day. The S3 data transfer cost? Zero. The cost to route that “free” data through our NAT Gateway? A small fortune. That was the day I stopped treating NAT Gateways as a simple “set it and forget it” utility and started treating them like the ticking cost bombs they can be.

First, Why Is It So Expensive? The Silent Killer Isn’t the Hourly Rate.

Everyone gets hung up on the hourly charge for a NAT Gateway, but that’s rarely the problem. As of this writing, it’s about $0.045 per hour, which comes out to roughly $33 a month. That’s pocket change. The real damage comes from the Data Processing charge. AWS bills another $0.045 for every gigabyte of data that passes through the gateway. Think about what your private instances do:

Pulling down OS updates from external repos (yum update, apt-get upgrade).
Downloading container images from Docker Hub or ECR.
Calling third-party APIs.
And my personal favorite: moving data to and from other AWS services like S3.

That data adds up fast. If your prod-db-01 instance sends 500GB of backups to S3 through a NAT Gateway, you just spent an extra $22.50 you didn’t need to. Now multiply that across a fleet of servers, and you see how we ended up with a $9k bill.

The Fixes: From a 10-Minute Click to a Weekend Project

Look, you can’t just turn off the internet for your private resources. But you can be a lot smarter about how you provide it. Here are the three levels of solutions we use at TechResolve.

1. The Quick Fix: Use Gateway VPC Endpoints (It’s Literally Free)

If your biggest cost driver is traffic to S3 or DynamoDB, this is your solution. Stop reading, go do this now. A Gateway VPC Endpoint creates a private route from your VPC directly to these services. The traffic never traverses the public internet, which means it never touches your NAT Gateway.

There is no hourly charge and no data processing fee for Gateway Endpoints. The only thing you need to do is create the endpoint and update your VPC’s route tables to point to it. The instances don’t even need a config change.

Here’s a dead-simple Terraform example:

# main.tf

# Create the VPC Endpoint for S3
resource "aws_vpc_endpoint" "s3_gateway_endpoint" {
  vpc_id       = var.vpc_id
  service_name = "com.amazonaws.${var.aws_region}.s3"
  vpc_endpoint_type = "Gateway"
}

# Associate it with the route tables for your private subnets
resource "aws_vpc_endpoint_route_table_association" "private_s3_association" {
  for_each = toset(var.private_subnet_route_table_ids)

  vpc_endpoint_id = aws_vpc_endpoint.s3_gateway_endpoint.id
  route_table_id  = each.value
}

Darian’s Pro Tip: This is the first thing I check during any cost-optimization review. If a team has a high NAT Gateway bill and no S3 Gateway Endpoint, it’s an immediate red flag. It’s the lowest-hanging fruit in the entire AWS cost ecosystem.

2. The Permanent Fix: Interface Endpoints & A Managed Proxy

Okay, so you’ve fixed S3 traffic, but your instances still need to pull packages from amazon-linux-extras or hit the GitHub API. Gateway Endpoints don’t work for everything. For many other AWS services (like ECR, CloudWatch Logs, SSM), you can use Interface VPC Endpoints (powered by AWS PrivateLink). These aren’t free—they have an hourly cost and a small data processing fee—but they are often far cheaper and more predictable than a NAT Gateway for high-volume, targeted traffic.

For everything else (generic internet access), it’s time to go a bit old-school. Set up a simple proxy server, like Squid, on a tiny EC2 instance (a t4g.nano is often plenty) in a public subnet. Then, instead of routing all outbound traffic from your private instances to the NAT Gateway, you configure them to use this proxy for HTTP/HTTPS requests.


NAT Gateway Approach	Proxy Approach
– Private EC2 -> Route Table -> NAT GW -> Internet	– Private EC2 -> HTTP_PROXY setting -> Proxy EC2 -> IGW -> Internet
– Billed per GB processed by NAT GW.	– Billed only for EC2 instance run time and standard EC2 data egress.
– Simple to set up.	– Requires instance configuration (user-data, env vars).

Warning: The proxy approach is powerful, but it’s not a managed service. You are now responsible for patching, securing, and ensuring the high availability of that proxy instance. Don’t treat it as a second-class citizen.

3. The ‘Nuclear’ Option: Do You Really Need It?

This is the question that separates senior engineers from junior ones. Does your application *truly* need persistent, unrestricted outbound internet access? Or is that just the lazy default?

Instead of giving every instance a route to the internet, consider a fundamental architectural shift:

For OS Patches: Don’t let 100 servers call yum at once. Use AWS Systems Manager Patch Manager to orchestrate patching in a controlled manner. You can even cache patches in S3 (accessed via your Gateway Endpoint!) to reduce external traffic.
For Application Dependencies: Use an internal artifact repository (like Artifactory or Nexus) that mirrors public repos. Your servers pull from the internal repo, and only the repo itself talks to the outside world.
For Egress-Heavy Tasks: Move specific functions into AWS Lambda. A Lambda function can be configured to run inside your VPC to access internal resources, and then its egress traffic can be tightly controlled or routed through an endpoint.

This approach requires more thought and planning. It’s not a quick fix. But it builds a more secure, more efficient, and ultimately cheaper system in the long run. It forces you to be intentional about your network traffic, and that’s never a bad thing.

The NAT Gateway is a great tool, but it’s a blunt instrument. Use it when you need it, but for everything else, reach for the scalpel of VPC Endpoints and thoughtful architecture. Your CFO will thank you.

– Darian Vance, TechResolve