AWS-Generated Cost Allocation Tags
Start course

Costs in cloud environments can get complicated quickly. Therefore it is essential to provide transparency and responsibility to everyone in a business. Hence, in this course, we will take a look at tagging in AWS in general and other best practices in the context of cost optimization in AWS.

Learning Objectives

  • Understand what tagging is in AWS and learn about its benefits
  • Learn about the best practices for tagging
  • Learn about AWS-generated cost allocation tags

Intended Audience

This course is ideal for anyone looking to optimize costs within their AWS environment.


To get the most out of this course, you should have a basic knowledge of cost optimization in theory, cloud- and finance-related terminology, and the AWS platform.


The default tags in AWS are basically cost allocation tags. They can be activated in the billing section, which we will explain in a minute. Cost allocation tags are special tags that are used by Cost Explorer and other services for allocation and visualization. So they can be explicitly used and displayed in the various views of various services. So take a look at the screenshot. Here we can see the Cost allocation tags section in AWS Billing. We can tell that CostCenter and Name are active and enabled as cost allocation tags, while the others are inactive. These inactive tags were once set for resources that are not in use any longer.

Once the cost allocation tags are activated, the console detects all tag keys used and suggests those for activation as cost allocation tags as well. Otherwise, they won't show up in Cost Explorer charts. The term User Defined means that a user created these tags and that they are therefore custom tags. AWS generated tags were automatically generated, such as createdBy, the createdBy Amazon WorkSpaces Tag. These were created and applied to support AWS resources for the purpose of cost allocation. They can only be view in the AWS Billing and Cost Management console and reports. They do not appear anywhere else in the AWS console, including the AWS Tag Editor.

Also, note that in this Cost allocation tags section, all the tag keys that are and were used in the account will be shown here. However, if you don't enable the Cost Allocation Tags option, you will not be able to evaluate certain views in the Cost Explorer and other services. For example, if I want to know what costs have been incurred for all resources with a specific cost allocation tag, then I won't be able to select or see them.

To prevent you from failing to find your resources with those cost allocation tags, I will show you how to enable this option. Let's see how you can enable AWS generated Cost allocation tags. First, you need to log in to your Master account as an IAM user with the required permissions. Next, type Billing into the search field and go to the Billing console. Select Cost Allocation Tags on the left side menu. And then, simply click on Activate to enable the tags.

About the Author

Heinrich Marks and is a FinOps Consultant at kreuzwerker Frankfurt GmbH, Germany. His expertise lies in AWS cost optimization and FinOps methodology at the enterprise level. 
At kreuzwerker, we focus on AWS, Software Engineering, and Cloud Financial Management. We've faced many cases with our customers where costs in the cloud got out of hand and lost touch with the actual business values. This made us work harder on solutions and find ways to master financial management in the cloud. 
Over time, we have already been able to save our customers many millions of dollars. Moreover, we are also proud partners of the FinOps Foundation and the leading professionals in Germany. Today, we want to share this knowledge with you and spread more awareness on the topic!