Gross-Up

When an employer reimburses a relocation expense (move cost, temporary housing, home-sale assistance, etc.), the IRS often treats the reimbursement as taxable compensation. Without gross-up, an employee receiving a $20,000 relocation benefit might net only $13,000-$15,000 after federal income tax, FICA, and state tax. Gross-up calculates the additional amount the employer must pay so the post-tax net equals the original $20,000. The Relocation Management Company (Cartus, Sirva, Aires, etc.) typically handles the gross-up calculation as part of the corporate-relo file, working with the employer's tax team to determine the appropriate rate (which varies by employee tax bracket and state).

Gross-up is what makes a corporate relocation actually equal to its face value. Without it, the employee absorbs significant tax cost on a "benefit" that was supposed to make them whole. Most corporate-relo programs include gross-up by default, but some don't — and the difference can be thousands of dollars. Employees moving on a corporate-relo file should confirm gross-up coverage with their HR/Mobility team before accepting the offer. The Tax Cuts and Jobs Act of 2017 eliminated most moving-expense deductions (except for active-duty military), which made gross-up more important for civilians than ever — the employee can no longer deduct the moving expenses on their own return.

Gross-up calculation is not in our scope — it happens between the employer, the RMC (Cartus / Sirva / Aires / Graebel), and the employer's tax team. We coordinate timing of payments through the RMC schedule, provide the documentation the RMC needs for the gross-up calculation (invoices, weight tickets, valuation receipts), and ensure the move-cost portion of the relocation benefit is accurately calculated. We do not give tax advice; the employee's HR/Mobility coordinator and their personal tax advisor are the right contacts.

Does Muscleman Elite calculate gross-up for me?

No — gross-up is a tax calculation handled by your employer, your relocation administrator (RMC), or your tax advisor. We provide the move-cost documentation the RMC needs to perform the gross-up correctly: invoices, weight tickets, valuation receipts, COIs. The math itself is theirs.

Why does my corporate-relo offer mention gross-up?

Because without gross-up, the IRS treats your relocation reimbursement as taxable income and you would net far less than the offer states. Gross-up adds the additional payment needed to make you whole after taxes. Most Fortune 500 employers include gross-up by default; smaller employers sometimes don't. Confirm with HR before accepting.