This code shows how to zip while uploading the file.

Need to include System.IO.Compression namespace to zip the upload files. In click event write the below code.

using System.IO.Compression;
using System.IO;

protected void btnUpload_Click(object sender, EventArgs e)
{
string strName = Path.GetFileName( FileUpload1.PostedFile.FileName);
Stream myStream = FileUpload1.PostedFile.InputStream;
byte[] myBuffer = new byte[myStream.Length + 1];
myStream.Read(myBuffer, 0, myBuffer.Length);
myStream.Close();
FileStream myCompressedFile = default(FileStream);
myCompressedFile = File.Create(Server.MapPath(Path.ChangeExtension(strName, “gz”)));
GZipStream myStreamZip = new GZipStream(myCompressedFile, CompressionMode.Compress);
myStreamZip.Write(myBuffer, 0, myBuffer.Length);
myStreamZip.Close();
}

Here i am set size as +1 of upladed file size.