In the offer letter, it states that “according to US Internal revenue code all relocation benefits provided to you are considered taxable compensation. Taxable moving expenses include relocation expenses paid to third party suppliers on your behalf. Payments that are considered taxable income are subject to tax witholding in compliance with IRS regualtions. To minimize your tax burden, Microsoft will provide tax gross-up on taxable moving expenses.”
I’m taking the relocation package option( the non lump sum option), I’m curious what do they mean by gross up on taxable moving expense.
- Microsoft giggitycoNothing for you. In simple terms when Microsoft pays for relocation services - it’s taxable component on your salary. To minimize effect on your net pay they will add tax amount to your first or second paycheck so that same can be deducted for tax purposes. If you owe $100 as tax, Microsoft will pay extra $100 to your paycheck