How UPS Tier Incentives and Average Weekly Revenue Work
The short version
- A tier incentive, sometimes called a portfolio tier incentive, is the part of a UPS agreement's pricing that varies with your revenue. Where an agreement also has a fixed base incentive by service, weight and zone, its terms set how the two apply.
- Average weekly revenue is a rolling figure: each week one new week enters the average and the oldest leaves. A quiet week can drop you a tier, and so can a busy week from last year leaving the window.
- The measurement period, which charges count, whether the current week is included, which account numbers count and whether they are measured together or separately, and any introductory period are all set by your own agreement. They are not UPS-wide rules.
- A tier change takes effect on the volume you keep. Moving shipments to another carrier lowers the average over the following weeks, not at once.
- A higher tier does nothing for a package already billed at the minimum charge.
A UPS tier incentive is a discount whose size depends on your average weekly revenue with UPS. The agreement sets out revenue bands, each with its own incentive. UPS averages your weekly revenue over a rolling measurement period, often the last 52 weeks, finds the band that average falls in, and applies that band's incentive to eligible packages. The tier table determines the incentive for eligible services; where the agreement also provides a separate base incentive, its terms say how the two apply. When your invoice shows a tier incentive "based on an average weekly revenue of" a dollar figure, that figure is the rolling average UPS used, and it decides the discount on every eligible package that week. Because the average moves every week, the discount can change without anyone changing the agreement.
What the tier incentive line on a UPS invoice means
A UPS invoice for an account on a tiered agreement states, in its Incentives section, the average weekly revenue used to set the tier and the period that average covers. Read with the agreement's tier table, it tells you which band you were billed in.
| Illustrative invoice, Incentives section | |
|---|---|
| Tier incentive based on an average weekly revenue of | $9,946.15 |
| Measurement period | 52 weeks ending November 7, 2026 |
| Illustrative tier table | Average weekly revenue | Tier incentive |
|---|---|---|
| Tier 1 | Under $5,000 | Set in the agreement |
| Tier 2 | $5,000 to $9,999.99 | Set in the agreement |
| Tier 3 | $10,000 to $19,999.99 | Set in the agreement |
| Tier 4 | $20,000 and over | Set in the agreement |
Illustrative. Real agreements set their own bands, number of tiers and incentives, often by service, and they differ from shipper to shipper.
Against this table, an average weekly revenue of $9,946.15 sits in Tier 2. The Tier 2 incentive applies to every eligible package on the invoice. Where the agreement also provides a separate base incentive for the service, its terms say how the two apply. The UPS tier table is usually in the agreement's incentive pages, next to the services it applies to. The agreement also sets out the measurement period and the accounts covered.
How UPS calculates average weekly revenue
The calculation is a rolling average:
Average weekly revenue = eligible revenue over the measurement period ÷ number of weeks in the period.
Three definitions in the agreement decide what goes into it.
- Which revenue. Agreements generally measure gross transportation charges, the published charges before incentives, for the services the agreement names. That is not what you paid: two shippers with the same packages but different discounts have the same gross revenue. Whether fuel, residential and delivery area surcharges, other accessorials, or returns count depends on the agreement's definition of eligible charges. In the agreements we review, accessorials and fuel are often outside the figure, but your agreement's wording is the one that applies.
- Which weeks. A rolling 52 weeks is common, but agreements can use a different period. They also say whether the current invoice week is in the window or whether the average runs to an earlier week. Many new agreements set a starting tier for an introductory period, until enough weeks of history exist for the rolling average to take over.
- Which accounts. Your agreement determines which account numbers count and whether UPS measures them together or separately. Use the account grouping specified for your tier when rebuilding the average. An account that is not on the agreement does not count, even if it belongs to the same company.
Before recalculating a tier from invoice data, match the invoice's date range and account list to your own agreement's definitions. A calculation built on the wrong window, the wrong charges or the wrong accounts will disagree with UPS for reasons that have nothing to do with a billing error.
Why your UPS discount changed when your agreement did not
The rolling window explains most tier changes. Each week the newest week enters the average and the oldest week leaves. The average falls whenever the week leaving was bigger than the week entering, even if the new week was a normal week for you.
Take a shipper with an illustrative 52-week average of $10,100 and a tier threshold of $10,000. Total revenue in the window is $525,200. This week, an $18,000 week from last year's peak season leaves the window and a $10,000 week enters:
| Revenue in the window | Average weekly revenue | Tier | |
|---|---|---|---|
| Last week | $525,200 | $10,100.00 | Tier 3 |
| Week leaving the window | −$18,000 | ||
| Week entering the window | +$10,000 | ||
| This week | $517,200 | $9,946.15 | Tier 2 |
Illustrative figures. $517,200 ÷ 52 = $9,946.15.
The incoming week met the threshold on its own, and the shipper still dropped a tier, because a stronger week left the average. The same arithmetic runs in reverse: a peak season raises the average, and its weeks hold the tier up until they leave the window a year later. Other common causes of a tier change:
- A shift in service mix. If volume moves to a service the agreement does not count, eligible revenue falls even though package counts do not.
- Accounts added or left off. An account opened for a new location but not added to the agreement ships without counting toward the average.
- The rate increase. Gross revenue is measured on published charges, so UPS's annual increase raises the figure for the same packages. Whether the band thresholds move with it is a matter for the agreement.
- The end of an introductory period. When a starting tier ends, the tier is set by the rolling average for the first time.
How to check the tier on your UPS invoice
Checking a tier is a matter of rebuilding the number UPS printed and comparing the result with what was billed.
- Read the agreement's definitions: the measurement period, the eligible services and charges, the accounts covered and any introductory tier.
- Rebuild weekly eligible gross revenue for each week in the window, using the account grouping your agreement specifies for the tier: combined across accounts, or account by account.
- Average it and compare the result with the average weekly revenue and the period printed in the invoice's Incentives section. A material difference points to the wrong account grouping, a different window or a different charge definition.
- Find the band in the tier table, and check that its incentive was applied to each eligible package, on the right services, and not to services the agreement excludes.
- Track the average forward. Knowing how far the average sits from the next threshold, and which large weeks are about to leave the window, shows a tier change weeks before it reaches the invoice.
This is the tier check in our UPS invoice audit. ebb Logic™ rebuilds the rolling revenue from your invoices, confirms the billed tier, prices what a tier change did to your actual charges, and tracks your distance from each threshold.
Moving shipments to FedEx or another carrier
Moving volume away from UPS lowers the revenue entering the average. Because the average is rolling, the effect arrives gradually: each week a pre-move week leaves the window and a smaller post-move week enters, until the average settles at the new level. If that level is in a lower band, the tier incentive falls on every eligible package you still ship with UPS.
That is why a switch or split has to be priced on the volume that stays, at the tier it will settle in, across the weeks it takes to get there. The same logic applies when the agreement is renewed, since the bands and the volume behind them are priced together. Both are part of a UPS contract review, and our UPS vs FedEx comparison works through what splitting volume does to each carrier's discounts.
When a higher tier does not lower the bill
A tier incentive is a percentage off the transportation charge, and a minimum charge sets a floor under the net charge. On light packages the floor can already be the price. Once it is, a deeper discount from a higher tier lowers the calculated charge further below the floor, and UPS still bills the floor.
A shipper whose volume is mostly light residential packages can therefore move up a tier and see little change on those packages, while the heavier packages in the same account do get cheaper. How much of a tier's value reaches your bill depends on the share of packages billed at the minimum, which our minimum net charge guide explains with worked examples.
Tier incentives vs base incentives and UPS small business discounts
| Base incentive | Tier incentive | |
|---|---|---|
| Set by | Service, and often weight and zone | The revenue band your average weekly revenue falls in |
| Changes during the agreement | No | Yes, whenever the average crosses a band |
| Shown on the invoice | As incentive credits on each package | With the average weekly revenue used to set it |
Both are terms of a negotiated UPS agreement, and the agreement sets how they combine. UPS's small-business offers for shippers without a negotiated agreement are separate programs with their own pricing rules, and some vary their discounts with weekly shipping volume. Our guide to shipping volume discounts covers how the two kinds of pricing relate.
Frequently asked questions
What does "tier incentive based on an average weekly revenue" mean on my UPS invoice?
It names the rolling average weekly revenue UPS used to place your account in a band of your agreement's tier table. The incentive for that band is applied to your eligible packages for that invoice. Compare the figure with the bands in your agreement to see which tier you were billed in.
How does UPS calculate average weekly revenue for my discount tier?
It adds up eligible revenue over the measurement period in your agreement, often the last 52 weeks, and divides by the number of weeks. Which charges, weeks and accounts count is defined in the agreement.
Where do I find my UPS discount tier and the weeks used to calculate it?
The tier table, the measurement period and the accounts covered are in your UPS agreement, usually in the incentive pages. The average used for a given invoice is printed on the invoice.
Does UPS use what I actually paid or the charges before discounts?
Agreements generally measure gross transportation charges, the published charges before incentives, not the net amount you paid. Your agreement's definition of eligible revenue is the one that applies.
Do fuel, residential surcharges, delivery area surcharges or returns count toward my UPS tier?
It depends on the agreement's definition of eligible charges. Many agreements count transportation charges for named services and leave accessorials and fuel out, but some definitions differ, and returns depend on whether the return service is one the agreement names.
Does UPS always use a 52-week rolling average?
No. A rolling 52 weeks is common, but the period is set in each agreement, and some use a shorter one. The agreement also says whether the current invoice week is included and whether a starting tier applies for an introductory period.
Does the current invoice week count toward the average?
That is set by the agreement. Some measure through the prior completed week, so this week's shipping only affects the tier on a later invoice.
Does UPS combine revenue across my account numbers?
Your agreement determines which account numbers count and whether UPS measures them together or separately. Use the account grouping specified for your tier when rebuilding the average. An account that is not listed does not count, even if it belongs to the same business.
Why did my UPS discount go down even though I shipped about the same amount this week?
One reason is that a higher-revenue week rolled out of the average. The average fell below a band threshold even though the new week was normal. A change in service mix, an account left off the agreement or the end of an introductory tier can have the same effect.
What happens to my UPS discount if I move some shipments to FedEx?
The volume you move stops counting toward your average weekly revenue. Over the following weeks, as pre-move weeks leave the window, the average falls to the new level. If that is in a lower band, the tier incentive drops on every eligible package you keep at UPS.
Can a higher UPS tier lower my bill if most of my packages hit the minimum charge?
Very little for those packages. Once a package is billed at the minimum charge, a deeper discount does not lower it further. A higher tier still reduces the cost of packages billed above the minimum.
What is the difference between a UPS base incentive and a tier incentive?
A base incentive is fixed by service, and often weight and zone, for the life of the agreement. A tier incentive changes as your average weekly revenue moves between the bands in the agreement. Where an agreement has both for a service, its terms set how they apply together; for some services the tier table supplies the discount by itself.
Sources
- ebb Logistics, UPS invoice audit and UPS contract negotiation, for how tiers, rolling revenue and incentives are checked against an agreement.
- ebb Logistics, UPS and FedEx minimum net charges, for how the minimum charge interacts with incentives.