NET TO GROSS · 2026

Gross Up Calculator

When someone has been promised an exact amount in hand, payroll has to run a larger gross so the net lands on target. This gross up calculator works backwards from the net through federal, FICA and state withholding to the gross figure — and shows what the extra costs the employer. The same tool serves as a gross up payroll calculator, a gross up paycheck calculator and a gross up bonus calculator.

Gross-Up Calculator

Gross needed to hit a target net

Target net amount

Federal method

State rate

Include FICA (7.65%)

Gross to run

$1,421.46

Costs the employer $421.46 above the $1,000.00 the employee receives

Gross payment$1,421.46

Federal withholding — 22%− $312.72

Social Security — 6.2%− $88.13

Medicare — 1.45%− $20.61

Net to employee$1,000.00

Grossing up is division, not addition. Adding 29.65% to a $1,000.00 bonus lands short, because the tax comes out of the larger number — you have to divide by 0.7035instead. Employers use this for signing bonuses, relocation payments and any “you’ll receive exactly $X” promise. The flat 22% supplemental rate applies to bonuses up to $1,000,000; above that the excess is withheld at 37%.

THE FORMULA

Gross-Up Is Division, Not Addition

The formula is gross = net ÷ (1 − total tax rate). The instinct to add the tax percentage to the net is wrong, and it is wrong in a direction that leaves the employee short every time.

Take a $1,000 net with 22% federal supplemental, 7.65% FICA and no state tax — a 29.65% total. Adding 29.65% gives $1,296.50. Withholding 29.65% of that leaves $912.19, which is $87.81 short. Dividing instead gives $1,421.46, and 29.65% of that leaves exactly $1,000.

Gross-up at common net amounts

Target net	Gross (22% + FICA)	Employer cost above net	Gross (22% + FICA + 5% state)
$500.00	$710.73	$210.73	$765.11
$1,000.00	$1,421.46	$421.46	$1,530.22
$2,500.00	$3,553.66	$1,053.66	$3,825.55
$5,000.00	$7,107.32	$2,107.32	$7,651.11
$10,000.00	$14,214.64	$4,214.64	$15,302.22

WHEN IT IS USED

Where Gross-Ups Show Up in Payroll

A gross-up is the answer whenever a net figure has been promised rather than a gross one. The common cases:

Signing and retention bonuses — “$10,000 in your account” means a gross near $14,200
Relocation and moving costs — taxable to the employee since 2018, so reimbursing the invoice alone leaves them out of pocket
Taxable fringe benefits — a gift card or a prize that would otherwise create a tax bill the employee did not ask for
Tax equalisation — keeping an employee on assignment abroad in the same net position as at home
Settlements — where a net number was agreed in negotiation

The budgeting mistake is planning for the net. A grossed-up $10,000 costs closer to $14,200 in wages, plus the employer's own 7.65% FICA on that larger figure — roughly $15,300 in total.

GETTING THE RATE RIGHT

Which Rates Belong in the Calculation

A gross-up is only as accurate as the rate you feed it. Three things routinely throw it off:

The Social Security wage base. Once an employee passes $184,500 in wages for the year, the 6.2% Social Security portion stops. Grossing up at the full 7.65% after that point over-pays. Switch the FICA setting above to exclude it.

Supplemental versus marginal. The 22% flat rate is what payroll withholds, not what the employee ultimately pays. Someone in the 32% bracket will owe more at filing, so a gross-up calculated at 22% makes them whole on the day but not on the return. Where the promise is about the final position rather than the deposit, use their marginal rate instead.

State and local tax. Rates range from nothing to over 10%, and some cities add their own. The state field above takes a flat percentage; for a precise figure by state, use the paycheck calculator.

FAQ

Gross-Up Calculator — Frequently Asked Questions

How do you calculate a gross-up?+

Divide the target net by 1 minus the total withholding rate. To net $1,000 with 22% federal, 7.65% FICA and no state tax, the total rate is 29.65%, so the gross is $1,000 ÷ 0.7035 = $1,421.46. You cannot simply add 29.65% — that gives $1,296.50 and leaves the employee short.

Why does adding the tax percentage not work?+

Because the tax is charged on the larger grossed-up figure, not on the net. Adding 30% to $1,000 gives $1,300, but 30% of $1,300 is $390, leaving $910 — not $1,000. Division accounts for the tax on the tax; addition does not.

What is the supplemental withholding rate for bonuses?+

22% for supplemental wages up to $1,000,000 in a calendar year. Anything above $1,000,000 is withheld at 37%. Employers can instead use the aggregate method, combining the bonus with regular wages and withholding as though it were one larger paycheck.

When do employers gross up a payment?+

Whenever a specific net amount has been promised — signing bonuses, relocation and moving expenses, taxable fringe benefits, expatriate tax equalisation, and legal settlements. It is also used to make an employee whole when a taxable benefit would otherwise cost them money.

Does grossing up cost the employer more?+

Yes, and by more than the tax itself. Grossing a $1,000 net to $1,421 costs the employer $421 extra in wages, plus the employer's own 7.65% FICA on the larger gross. Payroll budgets that assume the net figure will fall short.

Is a grossed-up bonus taxed differently at filing?+

No. The 22% supplemental rate is a withholding convention, not a tax rate. At filing, the bonus is ordinary income taxed at your marginal rate. If your marginal rate is below 22% you get the difference refunded; above it, you owe more.

Should FICA be included in the gross-up?+

Usually yes, because Social Security and Medicare come out of a bonus like any other wage. The exception is an employee who has already passed the $184,500 Social Security wage base — then only the 1.45% Medicare portion applies, and including the full 7.65% would over-gross the payment.