Gross-Up Definiton

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Gross-Up Definiton

Term Definition
Reimbursement offered to employees for the taxes paid by them on a certain portion of their income is called gross-up.

Extended Definition
A payment with inbuilt tax compensation made to a worker is called gross-up. In short, it means payment of the complete amount without any kind of deductions. For instance, 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.

Related Article:
Understanding Tax Gross-Up
How to Gross-Up Payroll

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