What is a Gross-up? Definition & Meaning

OnPay

Payroll Software

Terms and Definitions

Gross Up

Gross-up definition and meaning

A gross-up is money added to a payment to cover income taxes the recipient will owe. It is most often seen in executive compensation plans.

More about gross-up

Companies sometimes pay employees and don’t realize that the check needs to be grossed up to cover taxes when running through payroll. A gross-up can also change the dollar amount that an individual receives. For example, if an employee expects a payment of $10,000 after taxes — the payment can be grossed up once tax is withheld — the employee will net $10,000.

Most of the time, a gross-up is can be used for one-time payments, such as reimbursements for employee relocation expenses or bonuses.

Using gross-up in a sentence

“I will need to run a gross-up to make sure that the company owner will take home $1,000 for their holiday bonus after taxes are taken out.”

Terms related to Gross-Up

Articles and resources related to Gross-Up

LET'S DO THIS

Your first month’s on us

Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.

First Name

Last Name

Company name

Work Email Address

Company Phone Number

Employee count

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

What is a Gross-Up?

Gross-up definition and meaning

More about gross-up

Using gross-up in a sentence

LET'S DO THIS

Your first month’s on us