Gross-up is a term referring to payments (such as bonuses and salaries) with built-in deduction and tax compensation. To gross-up a payment, you offer more money to the employee to offset the expected deductions and taxes.
The Gross-Up Calculator is a utility that you can use to generate a timecard to be used in payroll. It determines the gross amount of money that you need to pay in order for an employee to receive a predetermined net amount.
Before using
Before you use the Gross-Up Calculator:
- Complete any unfinished payroll processing. If you have unposted/unprinted (open) payrolls, you should print checks before using the calculator to generate timecards.
- Make sure you have security permissions to access the Gross-Up Calculator and to those employees for which you want to calculate gross-up amounts. To add access to the calculator:
- Select and click to create a new group or click to edit your existing group.
- Under the Group Level Security tab, use the buttons to select the following settings:
- Employer = N/A
- Product = System
- Activity = Connected Services
- Task = Gross-Up Calculator
- Step = Gross-Up Calculator
- Prepare earnings that you cannot edit in the timecard generated by the calculator. If you have earnings set up with an Employee Calc. Method of Fixed or if you have flat earnings with an Employer Amount/Percent, the amounts cannot be edited in the timecard.
- To exclude fixed earnings from the gross-up calculation, change the Calculate? field to No on the employee's Pay tab ().
- To exclude employer amounts from the gross-up calculator, change the Employer Amt/Pct field to $0.00 on the employee's Pay tab.
Important! The Gross-Up Calculator cannot generate a timecard for an employee if that employee is part of an open payroll and already has a timecard.
To use the Gross-Up Calculator
- Select Gross-Up Calculator from the
- Find the Employee for whom you want to calculate a gross-up amount.
- Enter the Pay Period End Date. This should match the date you plan to use when calculating payroll.
- Select an Earning / Benefit from the drop-down menu. This menu displays only flat earnings and cash benefits assigned to the employee.
- Enter the net amount you want the employee to receive in the Desired Net Pay field.
- Click . The calculator completes the following actions as it generates the correct gross-up amount:
- The gross amount populates the Gross Amount field.
- The net amount populates the Calculated Net Pay field.
- A list of earnings, deductions, and taxes assigned to the employee displays on the right pane of the window. These earnings/deductions/taxes are those already set up on the employee's Pay tab.
- To edit the employee’s earnings, deductions, or taxes, click the Override check box next to the item you want to edit.
- Change the amount or percentage in the Amount field.
- After editing the amounts, click again to update the gross calculation:
- The gross amount you can use to pay your employee is listed in the Gross Amount field.
- The Calculated Net Pay field displays the net amount determined during calculation.
- To accept the calculation, click . A prompt notifies you when the timecard has been generated.
- Click or select the next employee to calculate another gross-up amount.
Tip: Type the first letter of the employee's last name in the drop-down menu to quickly find the employee.
Tip: If the list of earnings, deductions, and taxes has an item you do not want included in the gross-up calculation, you must select Override next to the item to set the value to zero. The item will be excluded from the calculation.
Note: If you edit a percentage, the system converts it to decimal format. For example, 0.10 is 10%, 1.00 is 100%, and 0.505 is 50.5%.
After
using
If you use the function after using the Gross-Up Calculator, complete the following steps:
- Review the generated timecard(s) on the Timecards () or Timecard List () windows.
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- Review the Pre-Check Register report.
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- Complete all other payroll processes applicable to your company.
Note: Earnings for salary and wages, other than the grossed-up earning used in the calculator, are displayed on the gross-up timecard with zero values for hours and rates.