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Grading can shape students’ learning and encourage use of effective problem solving practices. Teaching assistants (TAs) are often responsible for grading student solutions and providing feedback, thus, their perceptions of grading may impact grading practices in the physics classroom. Understanding TAs’ perceptions of grading is instrumental for curriculum developers as well as professional development leaders interested in improving grading practices. In order to identify TAs’ perceptions of grading, we used a data collection tool designed to elicit TAs’ considerations when making grading decisions as well as elicit possible conflicts between their stated goals and actual grading practices. The tool was designed to explicate TAs’ attitudes towards research-based grading practices that promote effective problem solving approaches. TAs were first asked to state their goals for grading in general. Then, TAs graded student solutions in a simulated setting while explicating and discussing their underlying considerations. The data collection tool was administered at the beginning of TAs’ first postgraduate teaching appointment and again after one semester of teaching experience. We found that almost all of the TAs stated that the purpose of grading was formative, i.e. grading should encourage students to learn from their mistakes as well as inform the instructor of common student difficulties. However, when making grading decisions in a simulated setting, the majority of TAs’ grading considerations focused on correctness and they did not assign grades in a way that encourages use of effective problem solving approaches. TAs’ perceptions of grading did not change significantly during one semester of teaching experience.