1. Employer-Paid Taxes
Gross Up Calculations

2. Gross Up Formula: Basic
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3. Basic Calculation
The employee is to receive a year-end bonus of $7, 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) % (MEDI) = 34.15%
100% % = 65.85%
$7,000 / = $10,
Answer: $10,630.22
Proof: Taxes: $2, $ $ $ = $3,630.22
$10, $3, = $7,000

4. Basic Calculation
The employee is to receive a year-end bonus of $6, 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) % (MEDI) = 29.65%
100% % = 70.35%
$6,000 / = $8,
Proof: Taxes: $1, $ $ = $2,528.78
$8, $2, = $6,000

5. Gross Up Formula: Social Security Limit
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6. Social Security Limit Calculation
The employee is to receive a year-end bonus of $10, 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) % (MEDI) = 23.45%
100% % = 76.55%
($10,000 + $186) / = $13,
Answer: $13,306.34
Proof: Taxes: $2, $186 + $ = $3,306.33
$13, $3, = $10,000.01

7. Social Security Limit Calculation
The employee is to receive a year-end bonus of $6, 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) % (MEDI) = 23.45%
100% % = 76.55%
($6,000 + $31) / = $7,
Proof: Taxes: $1, $31 + $ = $1,878.51
$7, $1, = $6,000

8. Gross Up Formula: Medicare Limit
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9. Medicare Limit Calculation
The employee is to receive a year-end bonus of $30, 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) % (MEDI) + .9% (SURTAX) = 24.35%
100% % = 75.65%
($30,000 - $225) / = $39,
Answer: $39,358.89
Proof: Taxes: $8, $ $129.23* = $9,358.89
$39, $9, = $30, *($175,000 + $39,358.89)-$200,000 x .9% = $129.23

10. Medicare Limit Calculation
The employee is to receive a year-end bonus of $25, 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) % (MEDI) + .9% (SURTAX) = 24.35%
100% % = 75.65%
($25,000 - $135) / = $32,
Proof: Taxes: $7, $ $160.82* = $7,868.47
$32, $7, = $25,000 *($185,000 + $32,868.47)-$200,000 x .9% = $160.82

11. Gross Up Formula: Social Security Limit & Medicare Threshold
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12. 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% % + .9% = 24.35%
100% % = 75.65%
$94,000 + $1, $ = $94,532.20
$94, / = $124,959.95

13. 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, x 22% = $27,491.19
$128,400 - $106,200 = $22,200 x 6.2% = $1,376.40
$124, x 1.45% = $1,811.92
$106,200 + $124, = $231, $200,000 = $31,159.95
$31, x .9% = $280.44
$27, $1, $1, $ = $30,959.95
$124, $30, = $94,000

14. Gross Up Formula: Above Federal Rate Threshold
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15. 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% % + 0.9% = 39.35%
100% % = 60.65%
$70,000 / = $115,416.32
Proof:
Taxes: $42, $1, $1, = $45,416.33
$115, $45, = $69,999.99

16. Gross Up Formula: Federal Rate Threshold
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17. 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% % + 0.9% = 42.85%
100% % = 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 / = $8,661.42

18. 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, $7,000 = $1, x 37% = $614.73
$8, x 1.45% = $125.59
$8, x 0.9% = $77.95
$8, x 3.5% = $303.15
$1, $ $ $ $ = $2,661.42
$8, $2, = $6,000

19. Gross Up Formula: 401(k) Deferral
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20. 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

21. 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% % = 33.15%
100% % = 66.85%
$6,000 - $300 + $ $4.35 = $5,722.95
$5, / = $8, = $8,860.88

22. 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, $300 = $8, x 22% = $1,883.39
$8, $300 = $8, x 3.5% = $299.63
$8, x 6.2% = $549.37
$8, x 1.45% = $128.48
$8, $1, $ $ $ = $6,000.01
$6,000 - $300 = $5,700