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

question 3

True/False

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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Definitions:

Compounded Semi-annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods twice a year.

EAR

Effective Annual Rate is the actual return on an investment or the actual interest rate of a loan, taking into account the effect of compounding interest over the period.

Calculate

To calculate means to determine the amount or number of something by using mathematical processes.

Birth Rate

The number of live births per thousand of population per year.