Grossing Up Net Pay

Purpose

Gross-up works backward. You decide the net amount an employee should take home, and UZIO calculates the gross pay needed to deliver it after taxes. Use it when you promise a specific in-hand amount.

Typical uses:

• A bonus where you want the employee to receive exactly, say, $1,000 after taxes
• A cash bonus or gift card given outside payroll that must still be reported on the W-2. Gross-up calculates the taxes on the flat amount.

Who can do this: Any user whose role includes the Payroll permission. This is usually the Employer Admin, but other admin roles can be granted the same access.

Prerequisites

• The earning you are paying (Bonus, Commission, and so on) exists at the company level as a flat-dollar taxable earning. See Company Level Earnings. Non-paid taxable earnings (cash tips, gift cards) also qualify if you are recording rather than paying them.
• Gross-up is available only in a Special Payroll, not in a regular run.

Steps

1. Start a Special Payroll with Pay Run Type Special. Enter the pay group, the pay period start and end dates, and the pay date.
2. Set Apply Deductions and Apply Contributions. For a gross-up run, No for both is usual (see limitations below), then continue.
3. On the employee pay grid, zero out the auto-populated regular wages and hours. Special payrolls are usually for payments outside regular pay.
4. Click the Gross-Up Net button on the grid toolbar. In the pop-up, set Enable Gross-Up Net to Yes, then pick the earning to gross up (for example, Bonus) under Select Earning Type. The list offers your non-hourly, taxable company earnings. If none exist, the selector is disabled with a message saying so.
5. A Net to Gross column appears on the grid. For each employee who should receive a fixed net amount, enter it there. Their other earning columns show zero and UZIO recalculates their Gross Pay.
6. Employees whose gross you already know can be paid normally in the same run. Leave their Net to Gross at 0. One pay run handles both.
7. Click Continue, review the summary (the net for grossed-up employees matches what you entered), and approve.

[Screenshot: special payroll grid with the Net to Gross column and one employee grossed up]

Expected outcome

• Grossed-up employees receive exactly the net amount you entered. Taxes are calculated and withheld on the derived gross. For example, a $1,000 net bonus for an employee with a combined 30% withholding rate produces a gross of roughly $1,428.57, of which $428.57 is withheld. The pay stub shows the gross bonus and the taxes, and the direct deposit is $1,000.
• The payment lands on the W-2 correctly, including recorded-but-not-paid items such as gift cards.
• The employer cost is the gross amount plus employer taxes on it, shown on the run's cost summary.

Limitations and cautions

Related articles

• Running a Special Payroll
• Payroll Grid Tools: the Supplemental Tax tool
• Setting Up Company Level Earnings
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