One or more embodiments are directed to system in package (SiP) for optical devices, including proximity sensor packaging. One embodiment is directed to optical sensor that includes a substrate, an image sensor die and a light-emitting device. A first surface of the image sensor die is coupled to the substrate, and a recess is formed extending into the image sensor die from the first surface toward a second surface of the image sensor die. A light transmissive layer is formed in the image sensor die between the recess and the first surface. The optical sensor further includes a light-emitting device that is coupled to the substrate and positioned within the recess formed in the image sensor die.