This W-2 box comparison table outlines differences between reported wage values for payroll tax reporting purposes. Most filers notice discrepancies between these three boxes when they prepare their personal income tax returns each January, and many assume mismatches indicate a payroll error before reviewing standard statutory adjustments required by the IRS. This resource is built to help you cross-check your personal payroll records with your filed W-2 before submitting your tax return, or flag gaps to share with your company’s HR desk for correction if needed. All guidance here is educational only, per Margin Desk documentation standards, and does not constitute tax advice, so always consult a licensed CPA for formal filing questions.
Box 1 table rows listing federal taxable compensation
Box 1 reports all wages, tips, and other compensation subject to federal income tax, and is the value you will enter on line 1 of your Form 1040 as your primary earned income for the tax year. This value is calculated by taking your gross annual pay, minus all applicable pre-tax deductions that are excluded from federal income tax per IRS rules. Common pre-tax deductions that reduce Box 1 include traditional 401(k) and 403(b) contributions, pre-tax health, dental, and vision insurance premiums, health flexible spending account (FSA) contributions, dependent care FSA contributions, health savings account (HSA) contributions, qualified commuter and parking benefits up to annual IRS limits, and pre-tax adoption assistance benefits. Roth 401(k) contributions are deducted from your pay after federal income tax is calculated, so they are included in Box 1 values. Taxable fringe benefits are also added to Box 1, including group term life insurance coverage over $50,000, personal use of a company-owned vehicle, non-accountable expense reimbursements, bonuses, severance pay, and taxable moving expenses for non-military filers. Illustrative example: If you earned $90,000 in gross pay in 2024, contributed $12,000 to a traditional 401(k), $2,400 to a health FSA, and $1,800 to a dependent care FSA, your Box 1 value would be $73,800 before any taxable fringe benefits are added.
Box 3 column entries for social security wage bases
Box 3 reports all wages subject to the 6.2% Social Security payroll tax, which is matched by your employer and funds retirement, disability, and survivor benefits through the U.S. Social Security Administration. Unlike Box 1, Box 3 values do not exclude traditional retirement plan contributions, so pre-tax 401(k), 403(b), and 457(b) contributions are included in this value. The only pre-tax deductions that reduce Box 3 are pre-tax health, dental, and vision premiums, FSA contributions, HSA contributions, and commuter benefits, as these are exempt from Social Security tax per IRS rules. A key feature of Box 3 is the annual inflation-adjusted wage cap, which sets the maximum amount of earnings subject to Social Security tax each year. Illustrative example: The 2024 Social Security wage cap is $168,600, so any earnings above this threshold are not reported in Box 3, and no Social Security tax is withheld on amounts over the cap. If you earned $185,000 in gross pay in 2024, contributed $15,000 to a traditional 401(k), and $3,000 to pre-tax health insurance, your pre-cap eligible wages would be $182,000, so your Box 3 value would be capped at $168,600. If you work for a public sector employer that offers a state pension plan instead of Social Security participation, your Box 3 value may be $0, which is a standard reporting practice and not an error.
Box 5 data fields tracking Medicare taxable earnings
Box 5 reports all wages subject to the 1.45% Medicare payroll tax, which is also matched by your employer and funds federal Medicare health benefits for adults 65 and older and eligible disabled individuals. Like Box 3, Box 5 values include traditional retirement plan contributions, and only exclude the same pre-tax deductions (health premiums, FSAs, HSAs, commuter benefits) that are exempt from Medicare tax. The primary difference between Box 3 and Box 5 is that there is no annual wage cap for Medicare tax, so all eligible earnings are reported in Box 5 regardless of how much you earn in a year. High earners are also subject to an additional 0.9% Medicare surtax on earnings over $200,000 for single filers and $250,000 for joint filers, which is calculated based on your Box 5 value but reported separately on your individual tax return, not directly on the W-2. Using the same illustrative 2024 example as the Box 3 section: $185,000 gross pay, $15,000 traditional 401(k) contribution, $3,000 pre-tax health insurance, your Box 5 value would be $182,000, which is higher than the Box 3 cap of $168,600. If you participate in a non-qualified deferred compensation plan, your contributions may be subject to Medicare tax at the time of deferral rather than distribution, which can result in a higher Box 5 value in the year you make the deferral.
Comparison table row headers noting applicable tax types
| Category | Box 1 (Federal Taxable Wages) | Box 3 (Social Security Wages) | Box 5 (Medicare Wages) |
|---|---|---|---|
| Primary Tax Applied | Federal income tax, based on your filed W-4 withholding elections | 6.2% employee Social Security tax, matched 6.2% by your employer | 1.45% employee Medicare tax, matched 1.45% by your employer, plus 0.9% surtax for high earners |
| Pre-Tax Traditional 401(k) Treatment | Excluded from reported value | Included in reported value | Included in reported value |
| Pre-Tax Health Insurance/FSA/HSA Treatment | Excluded from reported value | Excluded from reported value | Excluded from reported value |
| Annual Wage Cap Applicable | No statutory cap, all eligible taxable income is reported | Capped at annual inflation-adjusted limit (Illustrative 2024: $168,600) | No statutory cap, all eligible taxable income is reported |
| Common Reasons for Mismatch Against Gross Pay | Taxable fringe benefits, pre-tax retirement contributions, pre-tax benefit deductions | Excess wages over annual Social Security cap, pre-tax benefit deductions | No applicable cap, pre-tax benefit deductions, non-qualified deferred compensation deferrals |
Form W-2 reference notes for cross-checking reported values
To cross-check the accuracy of the values in these three boxes, first pull your final pay stub for the applicable tax year, which will list your total gross pay, all pre-tax and post-tax deductions, and taxable fringe benefits issued during the year. Start by verifying Box 1: subtract all eligible pre-tax deductions that reduce federal taxable income from your gross pay, then add any applicable taxable fringe benefits to confirm the value matches your W-2. Next, verify Box 3: subtract only pre-tax deductions exempt from Social Security tax from your gross pay, add applicable taxable fringe benefits, then apply the annual Social Security cap if your eligible earnings exceed the limit. For Box 5, follow the same calculation as Box 3 but do not apply the wage cap to confirm the reported value. You should also cross-check the corresponding withholding boxes: Box 2 (federal income tax withheld) should align with your W-4 withholding rate applied to Box 1, Box 4 (Social Security tax withheld) should equal 6.2% of Box 3, and Box 6 (Medicare tax withheld) should equal 1.45% of Box 5 plus any applicable additional surtax for high earners. If you received W-2s from multiple employers in the same tax year, add up all Box 3 values across all forms: if the total exceeds the annual Social Security cap, you may be eligible for a refund of excess Social Security tax withheld when you file your Form 1040. If you identify a discrepancy that you cannot account for after reviewing your pay stub and the comparison table above, you should request a corrected Form W-2c from your employer’s payroll or HR desk as soon as possible, ideally before you file your tax return to avoid the need for an amended filing later. All cross-check guidance is for educational use only, per Margin Desk standards, and if you have questions about how discrepancies may impact your tax liability, you should consult a licensed tax professional.
Pull your final pay stub for the most recent tax year and your filed W-2 to cross-check the values in these three boxes against the comparison table above, and reach out to your employer’s payroll team if you identify unaccounted-for discrepancies greater than $100.