Grossed up意思
"Grossed up" is a term often used in the context of compensation and payroll. It refers to the process of increasing an employee's wages to account for taxes and other deductions that will be taken out before the employee receives their net pay.
Here's a simple explanation of the process:
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Gross Pay: This is the total amount of money an employee earns before any deductions are made.
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Deductions: From the gross pay, various deductions are typically taken out, such as income tax, social security, and health insurance premiums.
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Net Pay: This is the amount of money the employee actually takes home after all deductions have been made.
Grossing Up: To gross up an employee's pay means to increase their gross pay by a certain amount to ensure that they receive a specific net pay amount, regardless of the deductions. This is often done to compensate employees for taxes on things like bonuses or commissions, where the employee might want to receive a certain amount after taxes, not just before taxes.
For example, if an employee is expecting a bonus and wants to ensure that they receive at least $500 after taxes, the employer might need to gross up the bonus amount to account for the taxes that will be withheld. The employer would calculate the additional amount needed to be added to the bonus to ensure that the employee receives $500 after taxes are taken out.
Grossing up is typically done to provide employees with a predictable and desired amount of take-home pay, especially in situations where the employee's tax bracket or withholding might change due to a one-time payment or bonus.