Employer-Paid Taxes Gross Up Calculations

Gross Up Formula: Basic Always proof back

Basic Calculation The employee is to receive a year-end bonus of $7,000. The employer has agreed to pay all taxes on the bonus. The employee has been paid $75,000 year-to-date and the state supplemental wage withholding rate is 4.5%. Calculate the gross pay for this year-end bonus payment. 22% (FITW) + 4.5% (SITW) + 6.2% (SS) + 1.45% (MEDI) = 34.15% 100% - 34.15% = 65.85% $7,000 / .6585 = $10,630.220 Answer: $10,630.22 Proof: Taxes: $2,338.65 + $478.36 + $659.07 + $154.14 = $3,630.22 $10,630.22 - $3,630.22 = $7,000

Basic Calculation The employee is to receive a year-end bonus of $6,000. The employer has agreed to pay all taxes on the bonus. The employee has been paid $90,000 year-to-date and the employee works in a state with no supplemental wage withholding rate. Calculate the gross pay for this year-end bonus payment. Answer: $8,528.78 22% (FITW) + 6.2% (SS) + 1.45% (MEDI) = 29.65% 100% - 29.65% = 70.35% $6,000 / .7035 = $8,528.7846 Proof: Taxes: $1,876.33 + $528.78 + $123.67 = $2,528.78 $8,528.78 - $2,528.78 = $6,000

Gross Up Formula: Social Security Limit Always proof back

Social Security Limit Calculation The employee is to receive a year-end bonus of $10,000. The employer has agreed to pay all taxes on the bonus. The employee has been paid $125,400 year-to-date and the employee works in a state with no supplemental wage withholding rate. Calculate the gross pay for this year-end bonus payment. ($128,400 - $125,400) x 6.2% = $186 22% (FITW) + 1.45% (MEDI) = 23.45% 100% - 23.45% = 76.55% ($10,000 + $186) / .7655 = $13,306.335 Answer: $13,306.34 Proof: Taxes: $2,927.39 + $186 + $192.94 = $3,306.33 $13,306.34 - $3,306.33 = $10,000.01

Social Security Limit Calculation The employee is to receive a year-end bonus of $6,000. The employer has agreed to pay all taxes on the bonus. The employee has been paid $127,900 year-to-date and the employee works in a state with no supplemental wage withholding rate. Calculate the gross pay for this year-end bonus payment. Answer: $7,878.51 ($128,400 - $127,900) x 6.2% = $31 22% (FITW) + 1.45% (MEDI) = 23.45% 100% - 23.45% = 76.55% ($6,000 + $31) / .7655 = $7,878.5107 Proof: Taxes: $1,733.27 + $31 + $114.24 = $1,878.51 $7,878.51 - $1,878.51 = $6,000

Gross Up Formula: Medicare Limit Always proof back

Medicare Limit Calculation The employee is to receive a year-end bonus of $30,000. The employer has agreed to pay all taxes on the bonus. The employee has been paid $175,000 year-to-date and the employee works in a state with no supplemental wage withholding rate. Calculate the gross pay for this year-end bonus payment. ($200,000 - $175,000) x .9% = $225 22% (FITW) + 1.45% (MEDI) + .9% (SURTAX) = 24.35% 100% - 24.35% = 75.65% ($30,000 - $225) / .7565 = $39,358.8896 Answer: $39,358.89 Proof: Taxes: $8,658.96 + $570.70 + $129.23* = $9,358.89 $39,358.89 - $9,358.89 = $30,000 *($175,000 + $39,358.89)-$200,000 x .9% = $129.23

Medicare Limit Calculation The employee is to receive a year-end bonus of $25,000. The employer has agreed to pay all taxes on the bonus. The employee has been paid $185,000 year-to-date and the employee works in a state with no supplemental wage withholding rate. Calculate the gross pay for this year-end bonus payment. Answer: $32,868.47 ($200,000 - $185,000) x .9% = $135 22% (FITW) + 1.45% (MEDI) + .9% (SURTAX) = 24.35% 100% - 24.35% = 75.65% ($25,000 - $135) / .7565 = $32,868.473 Proof: Taxes: $7,231.06 + $476.59 + $160.82* = $7,868.47 $32,868.47 - $7,868.47 = $25,000 *($185,000 + $32,868.47)-$200,000 x .9% = $160.82

Gross Up Formula: Social Security Limit & Medicare Threshold Always Proof Back

Social Security Limit & Medicare Threshold Calculation An employee is to receive a net bonus of $94,000 and has year-to-date Medicare wages of $106,200. The employee works in a state with no supplemental wage withholding rate. $128,400 - $106,200 = $22,200 x 6.2% = $1,376.40 $200,000 - $106,200 = $93,800 x 0.9% = $844.20 22% + 1.45% + .9% = 24.35% 100% - 24.35% = 75.65% $94,000 + $1,376.40 - $844.20 = $94,532.20 $94,532.20 / .7565 = $124,959.95

Social Security Limit & Medicare Threshold Calculation An employee is to receive a net bonus of $94,000 and has year-to-date Medicare wages of $106,200. The employee works in a state with no supplemental wage withholding rate. Proof: $124,959.95 x 22% = $27,491.19 $128,400 - $106,200 = $22,200 x 6.2% = $1,376.40 $124,959.95 x 1.45% = $1,811.92 $106,200 + $124,959.95 = $231,159.95 - $200,000 = $31,159.95 $31,159.95 x .9% = $280.44 $27,491.19 + $1,376.40 + $1,811.92 + $280.44 = $30,959.95 $124,959.95 - $30,959.95 = $94,000

Gross Up Formula: Above Federal Rate Threshold Always Proof Back

Above Federal Rate Threshold Calculation An employee is to receive a net bonus of $70,000 and has year-to-date wages of $1,075,000. The employee works in a state with no supplemental wage withholding rate. 37% + 1.45% + 0.9% = 39.35% 100% - 39.35% = 60.65% $70,000 / .6065 = $115,416.32 Proof: Taxes: $42,704.04 +$1,673.54 +$1,038.75 = $45,416.33 $115,416.32 - $45,416.33 = $69,999.99

Gross Up Formula: Federal Rate Threshold Always Proof Back

Federal Rate Threshold Calculation An employee is to receive a net bonus of $6,000 and has year-to-date wages of $993,000. The employee works in a state with a supplemental wage withholding rate of 3.5%. 37% + 3.5% + 1.45% + 0.9% = 42.85% 100% - 42.85% = 57.15% $1,000,000 - $993,000 = $7,000 $7,000 x 22% = $1,540 $7,000 x 37% = $2,590 $6,000 + $1,540 - $2,590 = $4,950 $4,950 / .5715 = $8,661.42

Federal Rate Threshold Calculation An employee is to receive a net bonus of $6,000 and has year-to-date wages of $993,000. The employee works in a state with a supplemental wage withholding rate of 3.5%. Proof: $1,000,000 - $993,000 = $7,000 x 22% = $1,540.00 $8,661.42 - $7,000 = $1,661.42 x 37% = $614.73 $8,661.42 x 1.45% = $125.59 $8,661.42 x 0.9% = $77.95 $8,661.42 x 3.5% = $303.15 $1,540.00 + $614.73 + $125.59 + $77.95 + $303.15 = $2,661.42 $8,661.42 - $2,661.42 = $6,000

Gross Up Formula: 401(k) Deferral Always Proof Back

401(k) Deferral Calculation An employee is to receive a net bonus of $6,000 and has year-to-date wages of $50,000. The employee works in a state with a supplemental wage withholding rate of 3.5% and has elected a 5% 401(k) deferral. 401(k) Deferral Calculation: $6,000 x 5% = $300 Social Security / Medicare Taxable Wages: $6,000 FITW / SITW Taxable Wages: $6,000 - $300 = $5,700

401(k) Deferral Calculation An employee is to receive a net bonus of $6,000 and has year-to-date wages of $50,000. The employee works in a state with a supplemental wage withholding rate of 3.5% and has elected a 5% 401(k) deferral. $300 x 6.2% = $18.60 $300 x 1.45% = $4.35 22% + 3.5% + 6.2% + 1.45% = 33.15% 100% - 33.15% = 66.85% $6,000 - $300 + $18.60 + $4.35 = $5,722.95 $5,722.95 / .6685 = $8,560.88 + 300 = $8,860.88

401(k) Deferral Calculation An employee is to receive a net bonus of $6,000 and has year-to-date wages of $50,000. The employee works in a state with a supplemental wage withholding rate of 3.5% and has elected a 5% 401(k) deferral. Proof: $8,860.88 - $300 = $8,560.88 x 22% = $1,883.39 $8,860.88 - $300 = $8,560.88 x 3.5% = $299.63 $8,860.88 x 6.2% = $549.37 $8,860.88 x 1.45% = $128.48 $8,860.88 - $1,883.39 - $299.63 - $549.37 - $128.48 = $6,000.01 $6,000 - $300 = $5,700