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Administrator Guide
Last Updated: 2023-06-23
Example: Gross Up at a Company-Defined Percentage (USA)

Example: Gross Up at a Company-Defined Percentage (USA)

This example illustrates how to gross up amounts at a company-defined percentage.
You want to give George a 1000 USD spot award. Global Modern Service's policy is to gross up spot awards at 35%, regardless of state and local tax requirements. As a result, some employees can receive more or less than 1000 USD.
  1. Access the
    Create Earning
     task.
    Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
  2. Enter these values:
    Option Description
    Name
    Spot Award
    Code
    S_AWARD
  3. Enter these values on the
    Effective Dated
     tab:
    Option Description
    Effective Date
    The effective date of the earning.
    Calculation
    Grossed Up Amount
    Input Amount Allowed
    Unchecked
    Gross Up Type
    Company Specific Percentage
    Gross-Up Percentage
    35
  4. Add a row to the
    Related Calculation
     grid.
    Related Calculation
    Default Calculation
    Input Allowed?
    Net Amount (for Gross-Up)
    Payroll Input
    Checked
  5. From the
    Groups
     prompt on the
    Non-Effective Dated
     tab, select:
    • Adds to Gross [CAN USA]
      , and
    • Either
      Supplemental Earnings - Standard [USA]
       or
      Supplemental Earnings - Alternate [USA]
      .
    You can add other taxable pay component groups according to your tax requirements.
  6. Click
    OK
    .
  7. Access the
    Add Payroll Input by Worker
     task, and enter these values:
    Option Description
    Worker
    George
    Start Date
    January 1
    End Date
    January 31
    Pay Component
    Spot Award
    One-time
    Selected
    Override
    Selected
    Regular Run Category
    Selected
    Security:
    Worker Data: Payroll (Payroll Input)
     domain in the Core Payroll functional area.
  8. Click
    OK
    .
  9. Enter these values on the
    Input
     grid.
    Option Description
    Input Details - Type
    Net Amount (for Gross-Up)
    Input Details - Value
    1000
When you run the January payroll calculation, Workday uses a total tax rate of 35% to:
  • Calculate a gross-up percentage of 65%.
  • A company-specific gross-up amount of 1538.46 USD. (1000/0.65 = 1538.46)
Pay Calculation
Result
Total tax rate
35%
Gross-up percentage
1- 0.35 = 0.65
Company-specific gross-up amount
1000/0.65=1538.45 USD
Workday then applies state and local taxes to the company-specific gross-up amount.
Pay Calculation
Result (USD)
Company specific gross-up amount
1538.45
1538.46 * OASDI Rate (6.2%)
(95.38)
1538.46 * Medicare Rate (1.45%)
(22.30)
1538.46 * Federal Withholding Rate (25%)
(384.61)
1538.46 * State Withholding Rate (9.3%)
(143.08)
Actual Net Pay
893.08