Reverse Calculator

Gross Bonus for a Net Amount

To hand an employee a $5,000 net bonus at a 25% combined rate, you must gross up to $6,667, withholding $1,667 in tax. The employer cost is the full $6,667 (plus employer payroll tax on it).

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

Gross = Net / (1 - Tax Rate). This reverse payroll math ensures the employee keeps the intended amount after tax. It is standard for spot bonuses, awards, and relocation where the company absorbs the tax. Add employer payroll tax (7.65%) on the gross for true cost.

What Should You Do?

Scenario 1: at 35% tax, a $5k net bonus needs $7,692 gross — the tax bite grows fast. Scenario 2: a $10k net at 22% needs $12,820. Scenario 3: skipping gross-up means the employee nets less than promised and feels shortchanged.

Frequently Asked Questions

Why gross up at all?

So the employee receives the exact net amount you promised; otherwise taxes shrink it.

Does the employer pay tax on the gross-up?

Employer payroll tax applies to the gross bonus, including the gross-up amount.

What rate should I use?

The employee's marginal federal + state rate; use a blended estimate if unsure.

Authoritative References

IRS — Supplemental Wages — Withholding on bonuses and supplemental wages (Circular E).
Investopedia — Gross-Up — Gross-up calculation for net-to-gross.