Gross up payments

A gross up is an additional amount of money added to a payment to cover the income taxes that the recipient owes on the payment.

Gross up payments are calculated starting with net pay, Federal, state, and local taxes are added to the net pay. The end result equals the gross pay amount.

We recommend calculating gross up payments using a deduction cycle that only includes taxes.

• If you select a deduction cycle that includes a percent pretax deduction, an amount is not calculated. There is no wage amount available to calculate the deduction. Pretax deductions are processed before the interface to the tax engine for the gross up calculation and the net amount is reduced.
• After tax deductions are taken from the net amount. There is no additional call to BSI to calculate deductions after taxes have been calculated.