What is a gross-up?
A gross-up is an extra amount added to a payment so the taxes on it are covered and the recipient ends up with a specific net amount. Employers gross up bonuses (“$5,000 after taxes”), relocation and moving reimbursements, sign-on awards, gift cards and other taxable fringe benefits, and settlement payments. Because the gross-up itself is also taxable wages, you can’t just add the taxes on the net amount; you have to solve for the gross that leaves the right amount after taxes on the whole thing. This gross up calculator does that instantly.
How to use the gross up calculator
- Enter the net amount the employee should receive.
- Pick the federal method. Most payroll systems withhold a flat 22% on supplemental wages paid separately. Choose aggregate if the payment rides along with a regular paycheck, then enter the employee’s salary, pay frequency and filing status.
- Set payroll and state taxes. Keep FICA on for normal wages, add year-to-date wages if the employee is near the $184,500 Social Security wage base, and enter your state supplemental rate.
The result shows the gross payment, a breakdown of every tax, and the exact formula used.
Gross-up formula
When every tax is a flat percentage, the gross-up formula is simple: divide the net amount by one minus the total tax rate.
Total tax rate = federal 22% + Social Security 6.2% + Medicare 1.45% + state %
= 22% + 7.65% + state = 29.65% + state
With no state tax, a $5,000 net payment needs $5,000 ÷ (1 − 0.2965) = $7,107.32. The rate changes when the payment crosses the Social Security wage base (6.2% stops), reaches $200,000 of wages (0.9% Additional Medicare starts) or pushes supplemental wages over $1 million (federal jumps to 37%). In those cases, and for the aggregate method where federal withholding depends on salary, the calculator solves for gross numerically: it searches for the gross amount where gross minus all taxes equals your target, to the cent.
Common mistake: adding 29.65% to the net amount ($5,000 × 1.2965 = $6,482.50) under-grosses the payment. Taxes apply to the gross-up too, so the correct figure is $7,107.32.
Worked example: $5,000 net bonus
An employer wants an employee to take home exactly $5,000 from a separately paid bonus in 2026, with the flat supplemental method and the employee below the Social Security wage base:
| Gross bonus | $7,107.32 |
| Federal withholding (22%) | −$1,563.61 |
| Social Security (6.2%) | −$440.65 |
| Medicare (1.45%) | −$103.06 |
| Net to employee | $5,000.00 |
| Gross-up (taxes covered by employer) | $2,107.32 |
Other scenarios for the same $5,000 net:
- With a 5% state tax: gross is $7,651.11 ($5,000 ÷ (1 − 0.3465)).
- Aggregate method, $75,000 salary paid biweekly, single: gross is $7,496.91, because the combined paycheck is withheld at higher bracket rates.
- Employee already at $182,000 of wages: only part of the payment owes Social Security before the $184,500 wage base is reached, so gross drops to $6,734.16.
How to gross up a payment by hand
- Add up the tax rates that apply to the payment: federal supplemental, Social Security (if the employee is under the wage base), Medicare and state.
- Subtract the total from 1. At 29.65% with no state tax, that leaves 0.7035.
- Divide the net amount by that number to get the gross payment.
- Check your work: multiply the gross by each rate, subtract the taxes, and confirm the result equals the target net. Round to the cent and adjust by a penny if needed.
If the employee will cross the Social Security wage base partway through the payment, split it: gross up the part below the base at the full rate and the part above it without the 6.2%, or let the calculator do the search for you.
Gross-up table (2026, flat 22% + FICA, no state tax)
| Net amount | Gross needed | Federal | FICA | Gross-up |
|---|---|---|---|---|
| $1,000 | $1,421.46 | $312.72 | $108.74 | $421.46 |
| $2,500 | $3,553.66 | $781.81 | $271.85 | $1,053.66 |
| $5,000 | $7,107.32 | $1,563.61 | $543.71 | $2,107.32 |
| $10,000 | $14,214.64 | $3,127.22 | $1,087.42 | $4,214.64 |
| $25,000 | $35,536.60 | $7,818.05 | $2,718.55 | $10,536.60 |
When employers gross up payments
- Bonuses promised “net”. Holiday or spot bonuses where the employee should see a round number. See how bonuses are normally taxed with the bonus tax calculator and our bonus tax rate guide.
- Relocation benefits. Moving expense reimbursements are taxable wages for most employees, so many relocation packages include a gross-up.
- Taxable fringe benefits. Gift cards, awards that don’t qualify as tax-free achievement awards, and personal use of a company car are all wages.
- Executive and settlement payments. Contracts sometimes require the company to cover the tax on a payment.
The employer also pays its own share of Social Security and Medicare (7.65%) on the full gross amount, plus federal and state unemployment taxes where they apply, so the total cost of a gross-up is higher than the gross figure.
Withholding vs. the employee’s actual tax
A gross-up covers withholding, not necessarily the employee’s final tax. If the employee’s marginal rate is 24% or higher, the 22% withheld may not cover the full federal tax on the payment; if it’s 12%, they’ll get some back as a refund. Some employers gross up at the employee’s marginal rate instead. To see what the payment really adds to a tax bill, use the federal income tax calculator or the paycheck calculator.
Frequently asked questions
How do you calculate a gross-up?
Divide the net amount by one minus the total tax rate. With 22% federal and 7.65% FICA, the rate is 29.65%, so a $5,000 net payment needs $5,000 ÷ 0.7035 = $7,107.32 gross.
What is the gross-up formula?
Gross = Net ÷ (1 − tax rate). Use the combined federal, Social Security, Medicare and state rate as a decimal. If the payment crosses the Social Security wage base or uses aggregate withholding, solve iteratively as this calculator does.
Why not just add the tax to the net amount?
Because the extra money is taxable too. Adding 29.65% to $5,000 gives $6,482.50, but after 29.65% of taxes on that amount the employee only nets about $4,560. The gross-up formula accounts for tax on the tax.
What tax rate should I use to gross up a bonus?
Most employers use the federal supplemental rate of 22% (37% on supplemental wages over $1 million), 6.2% Social Security up to the $184,500 wage base, 1.45% Medicare, and the state’s supplemental rate.
Does a gross-up include Social Security and Medicare?
Usually, yes. FICA is withheld from wages, so a gross-up meant to deliver an exact net amount must cover it. Turn off the FICA option for payments that aren’t subject to it.
Is a grossed-up payment reported on the W-2?
Yes. The full gross amount, including the gross-up, is taxable wages reported on the employee’s Form W-2, and the withholding is credited against their tax for the year.