In calculating a "gross-up" amount of a bonus payment, an employer does not use the OASDI/HI tax rates in the formula.

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The employer does use the OASDI/HI tax rates in the formula to calculate the gross-up amount of a bonus payment. The gross-up amount is the additional amount added to the bonus payment to cover the employee's portion of the payroll taxes, including OASDI (Social Security) and HI (Medicare).

In Calculating a "Gross-Up" Amount of a Bonus Payment, an Employer