Checks_Gross_up_checks_Entering_a_check

Checks: Gross-up checks - Entering a check

Learn how to enter a gross-up check. A gross up check is a type of paycheck where the employer increases (or "grosses up") the employee's pay so that, after taxes are withheld, the employee receives a specific net amount. 

Why gross-up a check?

Employers use gross-up checks when they want the employee to receive a set net amount, for example, in cases like: 

  • Bonuses

  • Relocation reimbursement

  • Prizes or awards

 

Because the employee still owes taxes on the payment, the employer calculates and adds the estimated taxes to the gross amount so that the employee's take-home pay matches the intended net amount. 

 

Example

Suppose the employer wants the employee to receive $1,000 net, and the total tax rate is estimated at 25%. Instead of giving $1,000 gross (which would be reduced by taxes), the employer gross-ups the amount: 
 Taxes (25%): $333.33
 Net pay: $1,000
 Gross pay: $1,333.333 


 Webinar: Entering a gross-up check

 

 

202405m 2024Dec04 

Copyright © 2026 Caselle, Incorporated. All rights reserved.

    • Related Articles

    • Error: Deductions exceed gross

      Issue The employee's total deductions exceed the employee's gross pay. Explanation When deductions exceed gross pay, there isn't enough gross pay to cover all the deductions. This situation is called a negative net pay or insufficient earnings. It ...

    • How do I change my default settings for entering supplemental checks? (2025.02)

      A supplemental check is an additional paycheck issued to an employee outside of the standard payroll cycle. This check is typically used to pay for earnings that were not included in the regular paycheck, such as bonuses, commissions, retroactive ...

    • Error: No net pay code

      Issue The employee does not have a net pay code. Explanation Each employee who will receive a check must have a net pay code. A net pay code determines how an employee's net pay, the amount they receive after all deductions and taxes are applied, is ...

    • How do I enter payroll checks?

      Enter payroll data, including payroll exceptions, to calculate payroll checks. An exception happens when an amount or quantity that is used to calculate an employee's payroll check needs to be updated with a different amount or quantity than the ...

    • Employee pay codes grid - Abbreviations

      The Employee Pay Codes grid on the Enter Payroll Checks, Enter Supplementation Checks, Enter Termination Checks, and Enter Manual Checks use the following abbreviations when space is limited. Codes The Code column shows the amount/rate/percent code ...