Learn how to calculate gross wages.
Grossing up a paycheck means to calculate the gross wages obtained from a specified net pay amount. We explain how to calculate gross wages.
To successfully calculate the gross from the net, you must know:
- Net amount
- Taxes to be withheld
The basic formula to gross up an amount is:
net amount + flat tax amounts / (100% - total percent of taxes) = Gross
Assume the desired net pay amount is $200, and you want to withhold social security, medicare and $100 for federal income tax (FIT).
- Total the tax percentages.
Social Security 6.2% + Medicare 1.45% = 7.65%
- Subtract the total from 100%
100-7.65 = 92.35
- Convert that number to a percentage by moving the decimal two positions to the left
- Add $100 from FIT to the net
$100 + $200 = $300
- Divide the new net amount by the amount in step
300 / .9235 = 324.85
- The gross amount to be used is $324.85.
The net amount will be $200 after withholding social security, Medicare, and $100 for FIT.