Payroll Standard Operating Procedure 5.0: Gross Up Process for Additional Pay Earnings

Subject: Gross Up Process for Additional Pay Earnings

Source: Financial Management Services

Original Date of Issue: March 2008

Date of Last Revision: August 2017

Rationale: To process a one-time exact NET payment amount for an employee.

Procedure

When a department “grosses up” a payment, the department is charged for both the payment itself and the additional amount to cover the employee's applicable taxes. A grossed up payment must be processed using the eligible earn codes on the Additional Pay eDoc and be submitted on an electronic adjustment voucher in the next available off-cycle payroll. The most common use of the gross up process involves one-time additional payments.

eDoc information:

  • Use an effective date from a previous pay period. The transaction should not be selected on the current payroll voucher.
  • Indicate the exact NET amount you want the employee to receive.
  • In the notes section, indicate that this payment will be “grossed up” to include taxes.

Adjustment Voucher information:

  • Gross up transactions must be processed in the off-cycle payroll or as on-line checks. They cannot be included in the regular on-cycle payroll.
  • Departments will not be charged an off-cycle fee if the transaction is processed in the off-cycle payroll using normal direct bank procedures. Departments will, however, be charged the on-line fee if they request a paper check.
  • Electronic adjustment voucher: After you enter the additional pay earn code/sequence number and tab out of the field, a GROSS UP box will be displayed. Click the box if you want the system to calculate the “grossed up” net amount. In the amount field, indicate the exact NET amount the employee should receive.

Cross Reference:

Responsible Organization: Financial Management Services