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Bonus Tax Gross-Up Calculator

Enter the target net bonus and tax rate to find the required gross bonus.

Result

$7,692.31
$2,692.31
$5,000.00
35.00%

How it is calculated

You supply the take-home bonus you want to guarantee (net) and one combined withholding rate in percent (rate). The tool converts the rate to a fraction r = rate / 100 and solves gross = net / (1 − r). The tax withheld is gross − net. The net amount and the rate are echoed back for reference. The rate is a single flat percentage that you decide on: the tool does not look up tax brackets, social-security caps or any country's rules, so it is only as accurate as the combined rate you enter, and rates differ by country, region and pay type. A rate of 100% or more, or a negative one, gives no result. Any employer-side payroll cost on top of the gross is not included.

Worked example

An employee should receive $5,000 after a 35% combined withholding. Convert the rate: 35 / 100 = 0.35, so the employee keeps 1 − 0.35 = 0.65 of every gross dollar. Gross bonus = 5,000 / 0.65 = $7,692.31. Tax withheld = 7,692.31 − 5,000 = $2,692.31. Check: 35% of $7,692.31 is $2,692.31, leaving $5,000.00. The tool shows a gross bonus of $7,692.31.

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Common mistakes

  • Multiplying instead of dividing: 5,000 × 1.35 = 6,750 is too low. After 35% tax on 6,750 only $4,387.50 would remain; the correct gross is net divided by (1 − rate).
  • Using the headline income tax bracket as the combined rate. Withholding on a bonus also includes social-security and similar payroll deductions, so the rate to enter is the total share withheld.
  • Entering the rate as a decimal such as 0.35. The field is in percent, so 0.35 means 0.35% and the gross barely moves from the net.
  • Forgetting that grossing up changes the tax too. The extra gross is taxed as well, which is why the withholding is 35% of the gross, not 35% of the net.
  • Expecting a result for a 100% rate. It is rejected because no finite gross could leave any net amount.

Sources

About this calculator

A tax gross-up calculates the larger gross bonus an employer must pay so that, after taxes are withheld, the employee actually receives a specific target net amount. The formula is gross = net ÷ (1 − combined tax rate), where the combined tax rate bundles together federal, state, and payroll taxes, like Social Security and Medicare, that apply to supplemental wages.

Payroll and HR teams use gross-ups when a company wants to guarantee an employee a specific take-home bonus — a common promise in relocation packages, signing bonuses, or negotiated compensation — rather than leaving the final net amount to vary with the employee's exact tax situation. It shifts the tax burden of hitting that guarantee onto the employer's payroll cost rather than the employee's paycheck, so accurately calculating the gross amount matters for both budgeting and correct tax withholding.

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