Last updated for v.21.5
Common questions include “Where does this tax number come from?” or “How did the Tax Engine calculate this tax”?
This interactive guide demonstrates how the Cost Estimate Years 1-6 Summary is populated using values from the Calculation Detail Report.
Overview of calculation approach
When tax calculation method is set to Grossup Only, the Tax Engine calculates the tax gross-up using a “with-without” approach. Two separate tax calculations are run:
Actual taxes on total assignment income (with)
Actual taxes on base compensation only (without)
The difference between the with and without tax costs is the tax gross-up on the assignment-related income.
This guide demonstrates using an example on how the user can reconcile the home and host grossup taxes from the Calculation Detail Report to the Cost Estimate Years 1-6 Summary. Additionally, see how taxable income is derived and the taxes calculated on that income, for both the with and without calculations.