How does the system calculate a gross up portion?
The system calculates gross-ups as follows:
1. Calculate gross-ups after all other components:
When calculating the gross-up portion, the system will take into account other taxable income to ensure that the employee clears the gross-up input value that has been posted. This means that the gross-up portion is not only made up of tax on the input value but might also include any additional tax increase as a result of the gross-up input.
With the below company setting enabled, the gross-up portion calculation does not take into account other taxable income on the payslip i.e. the tax on the gross-up is calculated in isolation. This means that the gross-up portion result is only made up of tax on the input value, and will not include any additional tax increase as a result of the gross-up input.
Note! The employee’s net in this scenario always clears the gross-up value that is posted.
2. Calculate gross up before other components:
Note! The employee’s net in this scenario will not always clear the gross-up value that is posted.
The above two calculation methods are driven by the below company setting:
Navigate > Configuration > Payroll > Payroll Config > Calculation Settings > Gross ups
Related Articles
How do I configure the system to calculate gross up components only using certain specific component codes?
To calculate gross up components only using certain specific component codes, specify the component codes in the "Only gross up these special component codes" field on the Calculation Settings screen. Navigate > Configuration > Payroll > Payroll ...How do I configure the system to calculate gross up components after all other components?
When calculating the gross-up portion, the system will take into account other taxable income to ensure that the employee clears the gross-up input value that has been posted. This means that the gross-up portion is not only made up of tax on the ...How do I configure the system to exclude fringe benefits when doing a gross up calculation?
To exclude fringe benefits from a gross-up calculation, enable the "Do not take the fringe benefits into account when doing a gross up and calculate them separately" company setting and save your changes. Navigate > Configuration > Payroll > Payroll ...How do I configure the system so that each component's calculation order number is displayed on the Payroll Components screen?
Enable the company setting, "Show calculation order numbers in grids on the company payroll component screen" on the Company Settings screen, for the component order to display on the Payroll Components screen. Navigate > Configuration > Basic ...Can the system combine the tax result values into one gross-up value should more than one gross up be inserted onto a payslip?
Enable the "Summarise the tax result values into one gross up value should more than one gross up be posted." checkbox under the Grtoss ups section on the Calculation Settings screen. Navigate > Configuration > Payroll > Payroll Config > Calculation ...