W-2 Wages: Box Differences, Codes, and Deadlines

W-2 wages are the taxable compensation your employer paid you during the calendar year and reported to you and the IRS on Form W-2, the Wage and Tax Statement. The form shows more than one wage figure, and those figures usually don’t match each other, because federal income tax, Social Security tax, and Medicare tax each measure your pay against a slightly different base. Once you understand what goes into each box and what pre-tax deductions pull out of each one, the form stops being a puzzle.

What Counts as W-2 Wages

W-2 wages include every form of taxable compensation your employer provides. The obvious pieces are base salary or hourly pay, overtime, commissions, and bonuses. The total also includes items that surprise people.

Tips you report to your employer are folded into your W-2 wages and appear in Box 1, Box 5, and Box 7.1Internal Revenue Service. Tip Recordkeeping and Reporting If your employer allocates tips to you (common in restaurants where reported tips fall below a threshold), those allocated tips appear separately in Box 8 and are not included in your other wage boxes. You still owe tax on them and must report them on your return.

Taxable fringe benefits count too. Group-term life insurance coverage above $50,000 adds the imputed cost of the extra coverage to your wages.2Internal Revenue Service. Group-Term Life Insurance Personal use of a company vehicle gets added, valued using IRS methods such as the 2026 standard mileage rate of 72.5 cents per mile or a flat $1.50-per-commute rule.3Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile Employer-paid educational assistance above $5,250 per year and dependent care assistance above $7,500 per year likewise become taxable wages.4Internal Revenue Service. Employer’s Tax Guide to Fringe Benefits, Publication 15-B

One boundary worth naming: only employees get a W-2. If you’re paid as an independent contractor, your pay goes on Form 1099-NEC and no taxes are withheld.5Internal Revenue Service. Form 1099-NEC and Independent Contractors Contractors pay self-employment tax of 15.3% on net earnings, covering both halves of Social Security and Medicare; W-2 employees pay only the employee half because the employer pays the other.

Why the Wage Boxes Don’t Match

Most W-2s show three different wage totals: Box 1 for federal income tax, Box 3 for Social Security, and Box 5 for Medicare. The differences come from two sources: the Social Security wage cap and pre-tax deductions that reduce some tax bases but not others.

For 2026, Social Security tax is 6.2% on wages up to a ceiling of $184,500. Anything you earn above that ceiling is exempt from Social Security tax, so Box 3 cannot exceed $184,500.6Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet Medicare tax is 1.45% on all wages with no cap, which is why Box 5 is often the highest figure on the form. Once your wages pass $200,000 in a calendar year, your employer must also withhold an Additional Medicare Tax of 0.9% on the excess, with no employer match.7Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates

Pre-tax deductions are the second reason the boxes diverge. Not every deduction reduces every tax.

Traditional 401(k) Contributions

Traditional 401(k) deferrals reduce Box 1 but not Box 3 or Box 5.8Internal Revenue Service. Common Errors on Form W-2 Codes for Retirement Plans You save federal income tax now but still pay full FICA on those contributions. Deferrals show in Box 12 with Code D. For 2026, the deferral limit is $24,500, with an $8,000 catch-up at age 50 and up, and an $11,250 catch-up for employees aged 60 through 63 under the SECURE 2.0 Act.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026

Roth 401(k) Contributions

Roth contributions are after-tax dollars, so they don’t reduce Box 1 at all. They appear in Box 12 with Code AA instead of Code D.8Internal Revenue Service. Common Errors on Form W-2 Codes for Retirement Plans The $24,500 limit is combined across traditional and Roth deferrals.

HSAs and Section 125 Cafeteria Plan Benefits

HSA contributions made through your employer (including amounts you elect through a cafeteria plan) reduce Box 1, Box 3, and Box 5, cutting federal income tax, Social Security, and Medicare.10Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3 They’re reported in Box 12 with Code W. For 2026, HSA limits are $4,400 for self-only coverage and $8,750 for family coverage.11Internal Revenue Service. Revenue Procedure 2025-19

Pre-tax health insurance premiums, health FSA contributions, and dependent care FSA contributions run through a Section 125 cafeteria plan also reduce all three wage boxes.12Internal Revenue Service. FAQs for Government Entities Regarding Cafeteria Plans The 2026 dependent care FSA exclusion is $7,500 per household ($3,750 if married filing separately).4Internal Revenue Service. Employer’s Tax Guide to Fringe Benefits, Publication 15-B

So the pattern is: HSA, cafeteria-plan premiums, and FSAs cut all three wage bases; traditional 401(k) cuts only Box 1; Roth 401(k) cuts none of them.

Reading the Main Boxes on Your W-2

You only need a handful of boxes to understand the form.

The Wage Boxes

  • Box 1, Federal Taxable Wages. This is the figure that flows to your Form 1040. It equals gross pay minus pre-tax deductions that reduce federal income tax, and it is usually the lowest wage figure on the form.
  • Box 3, Social Security Wages. The pay subject to the 6.2% Social Security tax, capped at $184,500 for 2026. Traditional 401(k) deferrals do not reduce this number.6Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
  • Box 5, Medicare Wages. Pay subject to the 1.45% Medicare tax, with no cap, so this is often the largest wage box.7Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
  • Box 7, Social Security Tips. Tips you reported that are subject to Social Security tax. Already included in Box 1.1Internal Revenue Service. Tip Recordkeeping and Reporting
  • Box 8, Allocated Tips. Tips your employer assigned to you based on sales formulas rather than what you reported. Not included in Boxes 1, 3, 5, or 7; you report them separately on your return.1Internal Revenue Service. Tip Recordkeeping and Reporting

The Withholding Boxes

  • Box 2, Federal Income Tax Withheld. What your employer sent the IRS on your behalf, based on your W-4. Unlike FICA, you can adjust this at any time by filing a new W-4.13Internal Revenue Service. About Form W-4, Employee’s Withholding Certificate
  • Box 4, Social Security Tax Withheld. Should equal 6.2% of Box 3. If it doesn’t, flag it with your employer.
  • Box 6, Medicare Tax Withheld. At minimum, 1.45% of Box 5. If your wages exceeded $200,000, this box also includes the 0.9% Additional Medicare Tax.7Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates

Boxes 15 through 20 report state and local wages and withholding, and they look very different depending on where you work. Seven states have no income tax, a few tax only investment income, and a handful require employee-paid disability insurance that typically shows up in Box 14 as informational.

Box 12 Codes Worth Knowing

Box 12 uses letter codes to break out specific items:

A Sanity Check You Can Run

Take Box 5 (usually your highest wage figure), subtract your Code D 401(k) amount, and the result should land close to Box 1. Any remaining gap is likely other pre-tax deductions that lowered Box 1 but aren’t broken out with their own Box 12 code, such as health insurance premiums or FSA contributions.

W-2 Deadlines and What to Do If Yours Is Missing or Wrong

Your employer must furnish your 2026 W-2 by February 1, 2027.15Internal Revenue Service. General Instructions for Forms W-2 and W-3 (2026) If you left a job mid-year, the same February 1 deadline applies.

If your W-2 hasn’t arrived by the end of January, contact your employer first. If you still don’t have it by the end of February, call the IRS at 800-829-1040 with your Social Security number, employment dates, and the employer’s name and address. The IRS will send the employer a letter requesting the form within 10 days.16Internal Revenue Service. If You Don’t Get a W-2 or Your W-2 Is Wrong

If the filing deadline arrives with no W-2, file using Form 4852, a substitute wage statement. Estimate wages and withholding from your final pay stub, explain how you arrived at the numbers, and attach it to your return.17Internal Revenue Service. Form 4852, Substitute for Form W-2, Wage and Tax Statement If the real W-2 shows up later with different figures, file an amended return on Form 1040-X.

When there’s an error on a W-2 that has already been filed (wrong Social Security number, wrong wage figure, missing Box 12 code), your employer fixes it with Form W-2c, the Corrected Wage and Tax Statement.18Social Security Administration. Helpful Hints to Forms W-2c/W-3c Filing Ask them to issue a corrected form as soon as you spot the mistake. If you already filed with the wrong numbers, use Form 1040-X once the W-2c arrives.

Accuracy on the form matters beyond this year’s return. Social Security and Medicare benefits are calculated from the wage data your employer reports over your working career.19Internal Revenue Service. Topic No. 752, Filing Forms W-2 and W-3 Understated wages today can mean smaller benefit checks decades from now.