The formulas
- Gross = target net / (1 - federal rate - state rate - Social Security 6.2% - Medicare 1.45%)
- Each withholding = gross x its rate
How it works
To deliver a set net amount, divide it by one minus the combined withholding rates. Publication 15-A uses the same division when an employer pays the employee's Social Security and Medicare taxes: for 2026 the stated pay is divided by 0.9235. Publication 15 sets the 2026 employee rates at 6.2 percent Social Security on wages up to $184,500 and 1.45 percent Medicare with no wage base.
A flat federal rate fits a supplemental payment withheld at the optional 22 percent rate. For regular wages, withholding follows the Publication 15-T tables and is not a flat percentage, so a flat-rate gross-up does not match the table withholding. Additional Medicare Tax of 0.9 percent applies to wages above $200,000 in the year and is not included.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Is the grossed-up amount taxable wages?
Yes. Taxes the employer pays on the employee's behalf are additional wages, which is why the division method is used.
What if the payment crosses the Social Security wage base?
Only wages up to the base bear the 6.2 percent tax; split the payment at the base and gross up each part with its own rate.
Sources
- Publication 15 (2026), (Circular E), Employer's Tax Guide, Internal Revenue Service
- Publication 15-A (2026), Employer's Supplemental Tax Guide, Internal Revenue Service
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