Gross-up Definition

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.

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Last Updated By

Rachel Blakely-Gray | Apr 27, 2023

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