A gross-up is when an employer increases the gross amount of payment to account for the taxes they must withhold from the payment.
Gross-up Extended Definition
A gross-up is a payment with inbuilt tax compensation made to a worker. In short, it means payment of the complete amount without any kind of deductions.
For example, if a worker is to be given $5,000 as a relocation expense, the company may issue a check worth $6,500. This will ensure that the worker receives $5,000 after the tax deduction.
Last Updated By
Rachel Blakely-Gray | Apr 27, 2023