Relocation Bonus Gross-Up 2027 Calculator
Post-TCJA (2018+), ALL relocation expenses paid by employer — moving, temporary housing, miscellaneous allowance — are taxable W-2 income. To keep the employee 'whole,' employers gross-up the bonus to cover the tax, often adding 30-50% to the stated amount.
| Promised Net Amount | — |
| Required Gross Amount | — |
| Tax on the Gross-Up | — |
| Effective Multiplier (Cost/Net) | — |
| Total Employer Cost | — |
The Tax Cuts and Jobs Act of 2017 eliminated the moving expense deduction (except for active-duty military) for tax years 2018-2025. As a result, every dollar an employer pays toward relocation — moving truck, temporary housing, mileage, miscellaneous allowance — becomes taxable W-2 income. To deliver a promised NET amount, employers must 'gross-up' the bonus, paying the IRS portion themselves.
Why Gross-Up Math Matters in 2027
Without gross-up, a $25,000 promised relocation only delivers $15,000-$17,500 net to the employee (after 30-40% combined tax). Result: employees underestimate the cost and end up out of pocket. Gross-up makes the employer pay enough that the net equals the promised number. Standard for mid-senior+ hires; less common for entry level.
Flat vs Inverse Gross-Up Methods
Flat method: multiply the net by (1 + tax rate). Under-grosses because the gross-up itself is also taxed — leaves the employee 5-10% short. Inverse method: divide by (1 - tax rate). Mathematically exact. Always demand the inverse method in writing — many corporate relocation policies still use flat for cost savings.
What Counts as Taxable Relocation in 2027
Everything except active-duty military: moving truck and labor, temporary housing (over 30 days), house-hunting trips, miscellaneous allowance (often $5,000-$15,000), spouse job search assistance, lease-break fees, mortgage closing costs, even cash incentives. Even employer-paid moving expenses paid DIRECTLY to a vendor are taxable to the employee.
Last updated May 2026. Sources: IRS Pub 521 — Moving Expenses, IRS TCJA Comparison