Does Box 1 on W-2 Include 401(k)? Traditional vs. Roth

Box 1 on your W-2 does not include your traditional pre-tax 401(k) contributions, but it does include your Roth 401(k) contributions. The two types of deferrals get opposite treatment because Box 1 reports wages subject to federal income tax, and only Roth contributions have already had that tax applied.

What Box 1 Actually Represents

Box 1 is labeled “Wages, tips, other compensation” and shows the income your employer reports as subject to federal income tax. It’s the number that flows onto your Form 1040 and drives your tax bracket.¹

Box 1 is almost always lower than your gross pay. Your employer starts with gross earnings, subtracts pre-tax deductions, and adds any taxable fringe benefits (such as employer-paid group life insurance above $50,000 in coverage). Common pre-tax reductions include traditional 401(k) deferrals, cafeteria-plan health insurance premiums, flexible spending account contributions, and payroll-deducted HSA contributions.²

If Box 1 looks lower than your salary, that’s usually correct. Pull your final pay stub, subtract year-to-date pre-tax deductions from gross earnings, and the total should closely match Box 1.

Traditional 401(k) Contributions Are Excluded From Box 1

When you contribute to a traditional 401(k), the money leaves your paycheck before federal income tax is calculated. Your employer subtracts those deferrals from gross pay and reports the reduced figure in Box 1.¹

Consider someone earning $100,000 who contributes $24,500 to a traditional 401(k) in 2026. Box 1 will show $75,500. That $24,500 isn’t tax-free forever. It’s tax-deferred, meaning you’ll owe income tax on it when you withdraw the money in retirement.

The exclusion only works up to the annual deferral limits. For 2026, the base limit is $24,500. Workers age 50 and older can add $8,000 in catch-up contributions, for a ceiling of $32,500. Under a SECURE 2.0 provision, employees who turn 60, 61, 62, or 63 during 2026 get a higher catch-up of $11,250, allowing total deferrals of $35,750.³

Still Counted for Social Security and Medicare

Traditional 401(k) deferrals reduce federal income tax, but they do not reduce Social Security or Medicare tax. Your employer includes those deferrals in Box 3 (Social Security wages) and Box 5 (Medicare wages).¹ That’s why, on a W-2 with pre-tax retirement contributions, Box 3 and Box 5 typically exceed Box 1.

Roth 401(k) Contributions Are Included in Box 1

Roth 401(k) contributions work the opposite way. You pay federal income tax on the money before it goes into the account, so your employer keeps those contributions in Box 1 exactly as if you’d taken them as cash.⁴ There’s no current-year deduction, but qualified withdrawals in retirement come out entirely tax-free, including investment gains.

The $24,500 base limit and the catch-up limits apply to the combined total of your traditional and Roth deferrals. You can split between the two in any proportion, but the total across both cannot exceed the cap.⁵

One recent wrinkle affects high earners. Starting with the 2026 tax year, if your FICA wages from the prior year exceeded the statutory threshold (set at $145,000, adjusted for inflation), any catch-up contributions you make must go into a Roth account rather than a traditional pre-tax one.⁶ For your W-2, that means the catch-up dollars will appear in Box 1 as taxable income instead of being excluded. Base deferrals up to $24,500 can still be traditional pre-tax.

Where to Find Your Contributions on the W-2

Whether traditional or Roth, employee 401(k) contributions are reported in Box 12 using specific letter codes:¹

Code D: traditional pre-tax elective deferrals to a 401(k). This is the amount excluded from Box 1.
Code AA: designated Roth contributions to a 401(k). This amount is already included in Box 1.

The IRS uses these Box 12 figures to verify you haven’t exceeded the annual deferral limit. Seeing both Code D and Code AA on the same W-2 means you split contributions during the year. Add them together to confirm the total stays within $24,500 (or the higher applicable catch-up limit).⁵

What About Your Employer’s Match?

Employer matching and non-elective contributions do not appear in Box 1, and they generally are not reported in Box 12 either. The W-2 instructions treat the match as a separate category from your elective deferrals, and employers aren’t required to report it on the form.¹ Some employers list the match in Box 14, an informational field with no tax impact on your return.

Your W-2 will not show total account growth. To see what your employer contributed, check your retirement plan statement or the plan’s annual summary.

Box 13 and the Retirement Plan Checkbox

Box 13 has a small checkbox labeled “Retirement plan.” Your employer checks it if you were an active participant in a qualified plan at any point during the year, including a 401(k). You count as an active participant if any contributions or forfeitures were credited to your account, even if you didn’t personally defer anything.⁷

The checkbox doesn’t change Box 1, but it does affect whether you can deduct traditional IRA contributions. If Box 13 is checked and your modified adjusted gross income exceeds certain thresholds, the traditional IRA deduction is reduced or eliminated.⁸ You can still contribute; the deduction is what phases out.

Checking Your Numbers

When your W-2 arrives, match Box 12 Code D or Code AA against your own records of what you deferred. Then confirm the relationship between the boxes:

If you contributed only to a traditional 401(k), Box 1 should be lower than Box 3 and Box 5 by roughly the Code D amount.
If you contributed only to a Roth 401(k), Box 1, Box 3, and Box 5 should be closer together, because Roth deferrals don’t reduce any of them.
If you contributed to both, expect Box 1 to be lower than Box 3 and Box 5 by roughly the Code D amount only.

If the numbers don’t line up, contact your payroll department before filing your return. Correcting a W-2 after you’ve filed means amending the return, which adds months to the process.

1
Internal Revenue Service. General Instructions for Forms W-2 and W-3 (2026)
2
Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans
3
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
4
Internal Revenue Service. Retirement Plans FAQs on Designated Roth Accounts
5
Internal Revenue Service. Retirement Topics – Contributions
6
Internal Revenue Service. Notice 2023-62 – Guidance on Section 603 of the SECURE 2.0 Act
7
Internal Revenue Service. Common Errors on Form W-2 Codes for Retirement Plans
8
Internal Revenue Service. Retirement Topics – IRA Contribution Limits