Gross Up Clause

Add up all federal, state, and local tax rates. Subtract the total tax rates from the number 1. 1 tax = net percent. Divide the net payment by the net percent. net payment / net percent = gross payment. Check your answer by calculating gross payment to net payment.

This is the normal tax liability, but now as the company has to pay tax as a perquisite to the expatriate this amount will be grossed-up and that amount will be paid as salary tax perquisite. The amount of salary tax perquisite is 1743275 144.71/100 = 25,22,693.

Many commercial leases contain a gross-up provision to amplify the property's operating expenses to the amount of operating expenses that would be incurred if the building was fully occupied.This authorizes the landlord to restate the operating expenses as if the building was completely occupied for one year.

Correctly drafted, a gross up provision relates only to Operating Expenses that vary with occupancyso called variable expenses. Variable expenses are those expenses that will go up or down depending on the number of tenants in the Building, such as utilities, trash removal, management fees and janitorial services.

A gross lease allows the tenant to pay a flat fee in exchange for the exclusive use of the property.For example, a tenant may ask the landlord to include janitorial or landscaping services.

Simply stated, the concept of gross up provision stipulates that if a building has significant vacancy, the landlord can estimate what the variable operating expense would have been had the building been fully occupied, and charge the tenants their pro-rata share of that cost.

A gross-up is an additional amount of money added to a payment to cover the income taxes the recipient will owe on the payment.For example, a company may agree to pay an executive's relocation expenses plus a gross-up to offset the expected income taxes that will be owed on the salary payment.