diff --git a/drivers/net/iavf/iavf_ethdev.c b/drivers/net/iavf/iavf_ethdev.c
index 506fcff6e3..59238ecceb 100644
--- a/drivers/net/iavf/iavf_ethdev.c
+++ b/drivers/net/iavf/iavf_ethdev.c
@@ -1140,7 +1140,8 @@ iavf_dev_info_get(struct rte_eth_dev *dev, struct rte_eth_dev_info *dev_info)
 		RTE_ETH_TX_OFFLOAD_IPIP_TNL_TSO |
 		RTE_ETH_TX_OFFLOAD_GENEVE_TNL_TSO |
 		RTE_ETH_TX_OFFLOAD_MULTI_SEGS |
-		RTE_ETH_TX_OFFLOAD_MBUF_FAST_FREE;
+		RTE_ETH_TX_OFFLOAD_MBUF_FAST_FREE |
+		RTE_ETH_TX_OFFLOAD_OUTER_UDP_CKSUM;
 
 	if (vf->vf_res->vf_cap_flags & VIRTCHNL_VF_OFFLOAD_CRC)
 		dev_info->rx_offload_capa |= RTE_ETH_RX_OFFLOAD_KEEP_CRC;
diff --git a/drivers/net/iavf/iavf_rxtx.c b/drivers/net/iavf/iavf_rxtx.c
index adec58e90a..7cbebafc09 100644
--- a/drivers/net/iavf/iavf_rxtx.c
+++ b/drivers/net/iavf/iavf_rxtx.c
@@ -2334,7 +2334,7 @@ static inline uint16_t
 iavf_calc_context_desc(uint64_t flags, uint8_t vlan_flag)
 {
 	if (flags & (RTE_MBUF_F_TX_TCP_SEG | RTE_MBUF_F_TX_UDP_SEG |
-			RTE_MBUF_F_TX_TUNNEL_MASK))
+	    RTE_MBUF_F_TX_TUNNEL_MASK | RTE_MBUF_F_TX_OUTER_IP_CKSUM))
 		return 1;
 	if (flags & RTE_MBUF_F_TX_VLAN &&
 	    vlan_flag & IAVF_TX_FLAGS_VLAN_TAG_LOC_L2TAG2)
@@ -2399,6 +2399,44 @@ iavf_fill_ctx_desc_tunnelling_field(volatile uint64_t *qw0,
 	break;
 	}
 
+	/* L4TUNT: L4 Tunneling Type */
+	switch (m->ol_flags & RTE_MBUF_F_TX_TUNNEL_MASK) {
+	case RTE_MBUF_F_TX_TUNNEL_IPIP:
+		/* for non UDP / GRE tunneling, set to 00b */
+		break;
+	case RTE_MBUF_F_TX_TUNNEL_VXLAN:
+	case RTE_MBUF_F_TX_TUNNEL_GTP:
+	case RTE_MBUF_F_TX_TUNNEL_GENEVE:
+		eip_typ |= IAVF_TXD_CTX_UDP_TUNNELING;
+		break;
+	case RTE_MBUF_F_TX_TUNNEL_GRE:
+		eip_typ |= IAVF_TXD_CTX_GRE_TUNNELING;
+		break;
+	default:
+		PMD_TX_LOG(ERR, "Tunnel type not supported");
+		return;
+	}
+
+	/* L4TUNLEN: L4 Tunneling Length, in Words
+	 *
+	 * We depend on app to set rte_mbuf.l2_len correctly.
+	 * For IP in GRE it should be set to the length of the GRE
+	 * header;
+	 * For MAC in GRE or MAC in UDP it should be set to the length
+	 * of the GRE or UDP headers plus the inner MAC up to including
+	 * its last Ethertype.
+	 * If MPLS labels exists, it should include them as well.
+	 */
+	eip_typ |= (m->l2_len >> 1) << IAVF_TXD_CTX_QW0_NATLEN_SHIFT;
+
+	/**
+	 * Calculate the tunneling UDP checksum.
+	 * Shall be set only if L4TUNT = 01b and EIPT is not zero
+	 */
+	if (!(eip_typ & IAVF_TX_CTX_EXT_IP_NONE) &&
+	    (eip_typ & IAVF_TXD_CTX_UDP_TUNNELING))
+		eip_typ |= IAVF_TXD_CTX_QW0_L4T_CS_MASK;
+
 	*qw0 = eip_typ << IAVF_TXD_CTX_QW0_TUN_PARAMS_EIPT_SHIFT |
 		eip_len << IAVF_TXD_CTX_QW0_TUN_PARAMS_EIPLEN_SHIFT |
 		eip_noinc << IAVF_TXD_CTX_QW0_TUN_PARAMS_EIP_NOINC_SHIFT;
@@ -2417,7 +2455,7 @@ iavf_fill_ctx_desc_segmentation_field(volatile uint64_t *field,
 		total_length = m->pkt_len - (m->l2_len + m->l3_len + m->l4_len);
 
 		if (m->ol_flags & RTE_MBUF_F_TX_TUNNEL_MASK)
-			total_length -= m->outer_l3_len;
+			total_length -= m->outer_l3_len +  m->outer_l2_len;
 	}
 
 #ifdef RTE_LIBRTE_IAVF_DEBUG_TX
@@ -2535,8 +2573,13 @@ iavf_build_data_desc_cmd_offset_fields(volatile uint64_t *qw1,
 	}
 
 	/* Set MACLEN */
-	offset |= (m->l2_len >> 1) << IAVF_TX_DESC_LENGTH_MACLEN_SHIFT;
-
+	if (m->ol_flags & RTE_MBUF_F_TX_TUNNEL_MASK)
+		offset |= (m->outer_l2_len >> 1)
+			<< IAVF_TX_DESC_LENGTH_MACLEN_SHIFT;
+	else
+		offset |= (m->l2_len >> 1)
+			<< IAVF_TX_DESC_LENGTH_MACLEN_SHIFT;
+
 	/* Enable L3 checksum offloading inner */
 	if (m->ol_flags & RTE_MBUF_F_TX_IP_CKSUM) {
 		if (m->ol_flags & RTE_MBUF_F_TX_IPV4) {
diff --git a/drivers/net/iavf/iavf_rxtx.h b/drivers/net/iavf/iavf_rxtx.h
index 1695e43cd5..4b40ad3615 100644
--- a/drivers/net/iavf/iavf_rxtx.h
+++ b/drivers/net/iavf/iavf_rxtx.h
@@ -26,6 +26,8 @@
 #define IAVF_TX_NO_VECTOR_FLAGS (				 \
 		RTE_ETH_TX_OFFLOAD_MULTI_SEGS |		 \
 		RTE_ETH_TX_OFFLOAD_TCP_TSO |		 \
+		RTE_ETH_TX_OFFLOAD_OUTER_IPV4_CKSUM |    \
+		RTE_ETH_TX_OFFLOAD_OUTER_UDP_CKSUM |	\
 		RTE_ETH_TX_OFFLOAD_SECURITY)
 
 #define IAVF_TX_VECTOR_OFFLOAD (				 \
@@ -56,7 +58,8 @@
 #define IAVF_TX_CKSUM_OFFLOAD_MASK (		 \
 		RTE_MBUF_F_TX_IP_CKSUM |		 \
 		RTE_MBUF_F_TX_L4_MASK |		 \
-		RTE_MBUF_F_TX_TCP_SEG)
+		RTE_MBUF_F_TX_TCP_SEG |          \
+		RTE_MBUF_F_TX_OUTER_IP_CKSUM)
 
 #define IAVF_TX_OFFLOAD_MASK (  \
 		RTE_MBUF_F_TX_OUTER_IPV6 |		 \
@@ -67,6 +70,9 @@
 		RTE_MBUF_F_TX_IP_CKSUM |		 \
 		RTE_MBUF_F_TX_L4_MASK |		 \
 		RTE_MBUF_F_TX_TCP_SEG |		 \
+		RTE_MBUF_F_TX_TUNNEL_MASK |	\
+		RTE_MBUF_F_TX_OUTER_IP_CKSUM |  \
+		RTE_MBUF_F_TX_OUTER_UDP_CKSUM | \
 		RTE_ETH_TX_OFFLOAD_SECURITY)
 
 #define IAVF_TX_OFFLOAD_NOTSUP_MASK \
