Gross-Up Calculator

Gross-Up Calculator (2026)

Need to deliver a specific net amount after taxes? A gross-up solves the reverse problem: given the net you want an employee to receive, it calculates the gross payment required after federal supplemental withholding (22%), FICA, and state tax. Employers use this for net bonuses, relocation packages, and taxable reimbursements.

Written by Elena Marquez

Tax Research Lead

Reviewed by Jordan Avery

Lead Editor

Last updated July 3, 2026

Fact-checked: IRS Publication 15-T and 2026 SSA wage-base data

How we calculated these examples →

Gross-up calculator

Enter desired net amount

What is gross-up?

Gross-up is when an employer increases a taxable payment so the employee still receives a promised net amount after withholding. If your offer letter says "you will receive a $5,000 net bonus," payroll must gross up the payment because taxes are withheld from the gross, not the net.

The calculation uses supplemental wage withholding rates, not your annual marginal bracket. For federal tax, the flat supplemental rate is 22% (37% above $1,000,000 in supplemental wages per year). Full FICA (6.2% Social Security up to $184,500 and 1.45% Medicare) and a state supplemental rate are added on top.

Worked example: $5,000 net bonus in California

To deliver $5,000.00 net in California, payroll must pay approximately $8,316.69 gross. Withholding breaks down as:

Line	Amount
Gross payment required	$8,316.69
Federal supplemental (22%)	-$1,829.67
Social Security	-$515.63
Medicare	-$120.59
California state withholding	-$850.80
Net delivered	$5,000.00

When employers use gross-up

Net bonuses: Executive contracts that promise a specific after-tax bonus amount.
Relocation benefits: Taxable moving expense reimbursements grossed up so the employee is not out of pocket.
Taxable reimbursements: When an employer pays an employee's tax liability on a fringe benefit.
Equity and signing bonuses: Some offers specify net proceeds after withholding.

For the forward calculation (gross bonus to net), use our bonus tax calculator or read how bonuses are taxed in 2026.

Frequently asked questions

What does gross-up mean on a paycheck?

Gross-up means the employer calculates a higher gross payment so that after taxes are withheld, the employee receives a specific net amount. It is common for net bonuses, relocation reimbursements, and taxable expense payments.

How do you gross up a bonus?

Divide the desired net amount by one minus the combined withholding rate (federal supplemental 22%, FICA 7.65%, plus state supplemental rate). Employers use payroll systems to solve this precisely because supplemental withholding uses flat rates, not your annual bracket.

What tax rate is used to gross up a bonus in 2026?

The IRS flat supplemental rate is 22% on amounts up to $1,000,000 in supplemental wages per year, plus full FICA (6.2% Social Security up to the wage base and 1.45% Medicare). States add their own supplemental withholding rate on top.

Is gross-up the same as your final tax?

No. Gross-up solves for withholding so you receive a target net check. Your actual tax when you file may differ. Supplemental withholding is an estimate; you reconcile on Form 1040.

When do employers gross up payments?

Common cases include net bonuses ("you will receive $5,000 after taxes"), taxable relocation benefits, gross-up clauses in executive contracts, and reimbursing employees for tax on taxable fringe benefits.

Sources and methodology

By Elena Marquez. Updated for 2026. See our methodology for formulas and assumptions. This is educational information, not tax or legal advice.

Disclaimer | Estimates only. Consult a tax professional for your situation.