Did You Know a $10K Relocation Benefit Can Turn Into $15K With Poor Gross-Up Handling?
Offering a $10,000 relocation bonus may seem like a simple, generous benefit—but if your gross-up process is poorly managed, that $10K can easily cost your company $15,000 or more.
This hidden expense is more common than many HR and payroll teams realize—and as year-end approaches, gross-up accuracy is mission-critical.
Let’s break down how a well-intentioned relocation payment can balloon due to tax miscalculations, and how your team can avoid it.
What Is a Gross-Up, Really?
A tax gross-up is when an employer increases a taxable payment (like a relocation bonus or housing allowance) to cover the employee’s tax liability—ensuring they receive the full intended benefit after taxes.
For example, if you offer an employee $10,000 to help with their relocation and don’t gross it up, they may only receive around $7,000 after taxes. To “make them whole,” you might gross it up to around $13,000 depending on tax rates.
But if your calculations are off—or if you're layering gross-ups on gross-ups—you can end up overpaying by thousands.
How a $10K Benefit Turns Into $15K
Here’s how a simple relocation payment becomes a bloated line item:
Individually, these errors might seem small. But together, they can turn your $10,000 benefit into a $15,000 tax-time regret.
Real Cost, Real Risk
Aside from bloated spend, poor gross-up handling introduces:
W-2 inaccuracies
Time-consuming January corrections
Frustrated employees with unexpected tax bills
Compliance exposure during audits
And most of it is preventable with the right tools and processes in place.
What Smart Teams Are Doing in Q4
As year-end approaches, top HR and finance teams are already:
Auditing all relocation-related taxable payments
Aligning with payroll on what’s been reported YTD
Switching from flat-rate to marginal gross-up models
Partnering with providers who understand global compliance nuances
How Orion Mobility Protects You
At Orion, we help companies eliminate gross-up guesswork:
Automatically calculates accurate gross-ups by employee profile
Flags duplicate or inflated payments before they hit payroll
Adjusts for multi-state or international tax obligations
Provides clean, audit-ready documentation
Integrates with payroll teams to ensure smooth year-end processing
Whether you’re offering $5K, $10K, or $50K in relocation support, we ensure your net intention doesn’t become a gross mistake.
Final Takeaway
A $10,000 relocation benefit shouldn’t cost $15,000.
If it does, your gross-up strategy needs attention—before Q4 becomes damage control.
Let’s fix it now, not in February.
Ready to review your gross-up process before year-end?
Talk to the Orion Mobility team to make sure your relocation payments stay accurate, compliant, and cost-effective.