Gross-Up Payments
You can enter a desired net amount and direct the system to calculate taxes and determine the gross amount of the payment. This calculation is called a gross-up. You might want to create gross-up interim payments if you want the employees to receive payments for a specified net amount (for example, to reimburse an employee for moving expenses). Assume that an employee incurs 5,000 USD in moving expenses. In this case, you create a payment with a net amount of 5,000 USD. If you entered a regular interim payment for 5,000 USD, the employee would receive less than 5,000 USD after taxes were withheld. Using the gross-up process, the system determines what the gross amount of the payment must be so that the net amount, after taxes are calculated, is 5,000 USD.
You can enter individual gross-up payments, or the system can automatically create similar gross-up payments for a selected group of employees. For example, to give every employee in a department a 100 USD bonus for meeting a departmental goal, you could use the group gross-up feature. The gross-up interim payments do not include deductions, benefits, and accruals. To create a group of gross-up payments, you must first create an employee group. Also, all of the employees in the group must receive the same net pay amount.