How FedEx Ground Drivers Are Paid
How FedEx Ground Drivers Get Paid: P&D vs. Linehaul
For most FedEx Ground contractors, payroll is the largest operational expense, often ranging from 38% to 52% of total annual revenue. Driver compensation not only affects your bottom line—it also plays a major role in driver retention, route efficiency, and business scalability.
Here’s a breakdown of the most common ways drivers are paid in both FedEx P&D and linehaul operations, along with pros, cons, and key compliance considerations.
Compensation Options for FedEx Ground P&D Drivers
FedEx P&D drivers are typically paid in one of three ways:
1. Fixed Daily Wage (Most Common)
Pros: Easy to forecast, encourages route efficiency, provides income stability for drivers
Cons: May discourage collaboration or safety if drivers rush to finish early
Best Practice: Use bonuses or incentives for safety and extra stops to promote teamwork and quality performance.
Compliance Tip:
If a driver operates a vehicle over 10,000 lbs, federal regulations may exempt you from paying overtime.
For vehicles under 10,000 lbs, overtime is mandatory even with a daily wage.
2. Hourly Pay
Pros: Transparent overtime calculation
Cons: May incentivize longer work hours, increasing payroll costs
Audit Tip: Use geotagged time tracking and Daily Service Worksheets to monitor efficiency and avoid time fraud.
3. Pay by the Stop or Package
Pros: Direct link between performance and pay
Cons: Complex to manage, difficult to scale, can create fairness issues across route types
Recommendation: This method is not advised due to high administrative burden and potential safety risks.
How FedEx Ground Linehaul Drivers Are Paid
Compensation for linehaul drivers is more standardized but still requires strategic planning.
Per-Mile Pay
Solo drivers are paid a per-mile rate (e.g., $0.50/mile)
Team drivers split a higher per-mile rate (e.g., $0.60 total = $0.30 each)
Note: These are sample figures only. Contact our team to learn more about current rates.
Guaranteed Minimum Miles
To retain quality drivers—especially for unassigned runs—many linehaul contractors guarantee a minimum number of paid miles per week.
Example:
Teams: Guaranteed 4,000 miles
Solo Drivers: Guaranteed 1,800 miles
This approach builds income stability and strengthens driver retention in a highly competitive labor market.
Spot Runs
Spot runs are short, local hauls often completed before or after a scheduled run.
Paid either per day or as a percentage of spot revenue (e.g., 30%)
Great for increasing vehicle utilization and boosting driver pay
Compliance Reminder:
Always monitor DOT limits—no more than 14 hours/day or 70 hours/week.
Should You Offer Driver Benefits?
In the FedEx Ground space, benefits are uncommon, especially for smaller P&D operations. However, they can be a differentiator for larger or growing businesses.
Common Benefits to Consider:
401(k) and Retirement Plans (more common in linehaul)
Paid Time Off (PTO)
Safety and Attendance Bonuses
Driver Competitions & Incentives
Ongoing Training Opportunities
Pro Tip: Federal law requires benefits for businesses with 50+ employees. Speak with an employment attorney to understand your obligations by state.
Even if your operation is small, retention tools like bonuses and clear career paths can go a long way.
Want to Learn More?
For a comprehensive understanding of FedEx P&D routes, consider enrolling in our FedEx Ground Routes 101 E-Course. This course provides foundational knowledge to help you decide if investing in logistics routes aligns with your goals.
If you’re ready to explore available routes for sale, visit our Routes for Sale page.
