The purpose of the Net to Gross Calculator is to automatically calculate what the equivalent gross amount should be based off a desired net amount. This calculation looks at an employee’s pay frequency, tax scale and any other earnings to be processed in that pay run.
The Net to Gross Calculator is available as an action within the pay run. Click on an employee’s name to expand their pay details, click on “Actions” and then “Calculate Gross Payment from Net”:
Once you’ve clicked on “Calculate Gross Payment from Net”, the following pop up will appear:
All you need to do is:
- Enter the desired net amount you want the employee to be paid;
- Select the appropriate pay category; and
- Click on “Add to Pay Run”.
In between steps 2 and 3, we will run the calculation for you!
The Net to Gross Calculator can be used for all pay category types. See examples below of the calculator in action.
Using the Net to Gross Calculator on fixed pay categories
Let’s process a bonus for a few employees. The employees are all to receive the same net bonus amount, being £1000.
We’ll start with Charlie:
For Charlie to be paid a net bonus amount of £1000, his gross bonus amount needs to be £1091.59
Now we’ll do the same for Jacob:
For Jacob to be paid a net bonus amount of £1000, his gross bonus amount needs to be £1047.73.
Obviously you can see that Charlie and Jacob’s gross bonus amounts are different – this is simply because the employee's tax codes are different.
Using the Net to Gross Calculator on hourly pay categories
Abby has worked additional hours, outside of her normal salaried hours, and the employer has agreed to pay her for these hours. The issue is that Abby cannot receive more than £1150 in net pay each week. Additionally, there is no obligation for the employer to pay these additional hours (salaried arrangements and all) and so there is no contracted minimum hourly rate to be applied for these additional hours.
Abby’s normal weekly pay is as follows:
Now we will add the additional hours:
- The desired net payment entered = £428.92. As Abby’s net earnings are already £721.08, we need to apply the difference between the two amounts needs as the desired net amount.
- The number of units = 4, being the number of additional hours Abby worked.
- The total gross payment is divided by the number of units entered to calculate the hourly rate of £111.15
The results in the pay run are as follows:
The Net to Gross Calculator is available within the pay run module and so is only accessible to admin (full access) users.
Creating a Net to Gross Pay Category
You can create or edit a pay category that will enable you to pay a net amount to an employee by ticking the 'Net Payment' box within the Pay Category settings. Instructions on how to create a Pay Category can be found in this support article.
This Pay Category can then be entered at either an employee level, or in the pay run. When entered using the Net to Gross Pay Category, the details for the gross and net figures will appear in the notes section of the pay run.
If you have any questions or feedback, please email us at firstname.lastname@example.org.