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Former Member

Gross-up, Hypotaxes, Imputed Income....

Hi Experts,

Can someone please help me understand the Gross up concept? I am not very familiar with Imputed income, hypo taxes, and gross up calculations... Can someone please suggest how i can understand this process in US payroll?

Any documentation help or suggestions are welcome...

Thanks a ton.


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1 Answer

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    Former Member
    Oct 01, 2008 at 07:42 PM

    If you want to pay an employee 10000 net for a housing allowance for ex. you will set up your WT in PCL 68 with the val. 5.

    SAP will take the 10000 and will calculate the gross up using either the agregate method or the supplemental what ever you set up the wt.

    So your $10000 net will became $16435 gross ( exampl for IL state) because 6435 will be the taxes that needed to be paid:

    25% Federal 16435x25%=

    3% IL state 16435x3% (each state has his own supplemental rates)

    6.2% SOcial Sec (partial or none if the employee maxed out) 16435x6.2%=

    1.45% Medicare 16435x1.45%

    The hypotax is a different story. This is actualy a deduction that the company is taking from an employee pay because he doesn't have to pay a real tax due a foreign assignment.

    Imputed income is income that gets added to employees taxable wages for non cash benefits like life insurance, LTD premium, etc

    I hope this information helps.



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