FedEx Overtime Pay Calculator

Overtime questions

Does FedEx pay overtime?

FedEx Corporation pays overtime to its own non-exempt employees. But most Ground delivery drivers do not work for FedEx — they work for an independent service provider, and it is that contractor who owes the overtime. Under the FLSA, ISP drivers are employees of the contractor and must receive an overtime premium for every hour above 40 in a workweek unless the Motor Carrier Act exemption covers that week, regardless of whether they are paid per stop, per day, or hourly.

How do you calculate overtime for per-stop pay?

Divide total straight-time earnings for the week, including all non-discretionary bonuses, by total hours worked. That produces the regular rate for that week. Multiply overtime hours by the regular rate and by 0.5 to get the premium owed. A driver earning $1,085 in per-stop pay across 47 hours has a regular rate of $23.085 and is owed 7 × $23.085 × 0.5 = $80.80.

Why is it half-time instead of time-and-a-half?

Because piece-rate and daily-rate pay already covers every hour worked. Time-and-a-half applies when the base wage only pays for straight-time hours, which is how hourly pay works. When a driver's per-stop earnings compensated them across all 47 hours, the first 1.0× is already in their pocket and only the 0.5× premium remains outstanding. Paying 1.5× on top is not illegal — it is just an overpayment.

Do bonuses have to be included in the overtime rate?

Non-discretionary bonuses must be included. That covers 6th-day bonuses, safety bonuses, attendance bonuses, peak-season bonuses, and volume or stop-threshold bonuses — anything drivers were told in advance they could earn by meeting a standard. Only genuinely discretionary bonuses, where both the fact and the amount are decided after the fact with no prior promise, can be excluded. Leaving non-discretionary bonuses out is the most common overtime error in delivery payroll.

Are FedEx ISP drivers exempt from overtime under the Motor Carrier Act?

It depends on the vehicle, week by week. The Motor Carrier Act exemption covers drivers of vehicles rated over 10,000 lbs GVWR engaged in interstate commerce, such as walk-in step vans and linehaul tractors. Under the FLSA's small vehicle exception, any week in which a driver's work involves a vehicle rated 10,000 lbs or less, even for one day, is overtime-eligible for the whole week. Mixed fleets need a log of which vehicle each driver drove each day. Do not assume the exemption applies without checking GVWR against actual assignments.

What is W-2 box 12 code TT?

Starting with tax year 2026, employers must report qualified overtime compensation on Form W-2 in box 12 with code TT. Qualified overtime is the half-time premium the FLSA requires for hours over 40, not the whole overtime check. Drivers use the amount to claim the federal no tax on overtime deduction, which is capped at $12,500 a year ($25,000 on a joint return). Employers report the full amount even when it is above the cap.

Do FedEx drivers qualify for no tax on overtime?

Only for overtime the FLSA requires. A driver in a van rated 10,000 lbs GVWR or less on any day of the week qualifies for the half-time premium on that week's hours over 40. A week spent only in vehicles rated over 10,000 lbs is usually exempt under the Motor Carrier Act, so any overtime paid that week, whether by policy or under state law, does not count and code TT for that week is $0. Daily overtime and double-time extras never count.

Does part-time work change anything?

No. Overtime is triggered by hours in a workweek, not by employment status. A part-time driver who works 44 hours in one week is owed overtime for 4 hours, and a full-time driver who works 38 is owed none. There is also no such thing as averaging two weeks together — each workweek stands on its own, even on a biweekly pay cycle.

General information about the Fair Labor Standards Act, not legal advice. State overtime laws can be stricter than federal rules — California and several other states require daily overtime. Confirm your obligations with an employment attorney.