Gross-Up meaning is simple as it stands for the additional sum of money given to an employee by his/her employer to offset any income tax, which is likely additional Medicare, social security, etc.
Gross-Up is basically a one-time payment and is, however, optional.
For a better understanding of gross-up, the following examples are presented:
Suppose an employee is relocated by a certain company to a different place altogether, and he is paid an amount of Rs. 4,000 for his moving expenses. This reflected on his paycheck as well, but as he looks at the relocation reimbursement at his paystub, he sees that it equals Rs. 5,000. Here, the total amount that is 5,000 includes both the moving expenses as well as the withholding tax owned by the man on the 4,000 he received.
Good Up payment is often offered by the employer to employees in certain cases:
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