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Net to gross calculator

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3min read
Woman using a calculator and manual calculations.

When it comes to bonus time, most people are excited about the extra cash; but those running the payroll may not be as delighted. When bonuses are provided as net amounts, ‘spare’ time needs to be found to calculate what the equivalent gross amounts should be before processing in the pay run. Bring on the tax tables, formulas and excel spreadsheets, with a smidge of eye rolling! Users will be delighted to know that this nightmare can be automated within Employment Hero Payroll! Our Net to Gross Calculator removes all manual calculations and guesswork, thus saving payroll an inordinate amount of time.

Introducing our Net to Gross Calculator

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”:

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Net to Gross Calculator

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Once you’ve clicked on “Calculate Gross Payment from Net”, the following pop up will appear:

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Net to Gross Calculator

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All users need to do is:

  1. Enter the desired net amount the employee needs to be paid;
  2. Select the appropriate pay category; and
  3. Click on “Add to Pay Run”.

In between steps 2 and 3, Employment Hero Payroll 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 Karina:

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Net to Gross Calculator

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For Karina to be paid a net bonus amount of $1000, her gross bonus amount needs to be $1481.

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Net to Gross Calculator

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Now we’ll do the same for Argon:

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Net to Gross Calculator

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For Argon to be paid a net bonus amount of $1000, his gross bonus amount needs to be $1176.

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Net to Gross Calculator

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Obviously you can see that Karina and Argon’s gross bonus amounts are different – this is simply because their tax scales are different.

Using the Net to Gross Calculator on hourly pay categories

Karina 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 Karina 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.

Karina’s normal weekly pay is as follows:

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Now we will add the additional hours:

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Net to Gross Calculator

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  1. The desired net payment entered = $611. As Karina’s net earnings are already $539, we need to apply the difference between the two amounts needs as the desired net amount.
  2. The number of units = 4, being the number of additional hours Karina worked.
  3. The total gross payment is divided by the number of units entered to calculate the hourly rate of $226.25.

The results in the pay run are as follows:

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Net to Gross Calculator

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This tool is also really useful for tax accountants, saving a lot of time and effort in the management of Div7a loans (or debit loans) which has typically been a trial and error process.

The Net to Gross Calculator is available within the pay run module and so is only accessible to admin (full access) users.

The Team
Employment Hero -
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