Why Box 1, Box 3 and Box 5 are different numbers
Last updated:
Three boxes on your W-2 all claim to be your wages, and all three say something different. That is normal. They are three different definitions, used for three different taxes, and the gaps between them are almost always your retirement contributions and your health insurance. The short version: money you put into a traditional 401(k) comes out of Box 1 but not out of Box 3 or Box 5 — you skip income tax on it now, you do not skip Social Security and Medicare tax. Fill in the amounts below and the tool will show you where each gap on your own form came from.
Reconcile your three wage boxes
| Amount | Value | Box 1 | Box 3 | Box 5 | Why |
|---|
Nothing you type is uploaded — the whole calculation happens in your browser. For general information only, not tax advice. This explains a W-2 you already have; it does not prepare your return.
The one rule that explains most of it
Two kinds of money come out of your pay before tax, and they do not behave the same way.
| What came out | Box 1 (income tax) | Box 3 (Social Security) | Box 5 (Medicare) |
|---|---|---|---|
| Traditional 401(k), 403(b), 457(b) | Comes out | Stays in | Stays in |
| Health, dental, vision premiums | Comes out | Comes out | Comes out |
| Health FSA, dependent-care FSA, payroll HSA | Comes out | Comes out | Comes out |
| Roth 401(k) | Stays in | Stays in | Stays in |
So if the only thing that came out of your pay was a traditional 401(k) contribution, Box 1 will be lower than Box 3 and Box 5 by exactly that contribution, and Box 3 and Box 5 will be identical to each other. That is a correct W-2, not a payroll error, and it does not mean you were taxed twice. Retirement money escapes income tax now and pays it later; it pays Social Security and Medicare tax now and never again.
The other reason: Social Security stops, Medicare doesn't
There is a ceiling on the wages Social Security tax applies to, called the wage base. For 2026 it is $184,500. Earn more than that and Box 3 simply stops there while Box 5 keeps counting, so Box 3 comes out lower than Box 5 by however much you earned above the ceiling. Medicare has no ceiling at all, and above $200,000 there is an extra 0.9% on top, withheld regardless of your filing status.
If you want to know the date in the year you personally stop paying Social Security tax, that is what the wage base max-out calculator works out.
Common questions
Why is my W-2 Box 1 lower than Box 3 and Box 5? Almost always because of a traditional 401(k), 403(b) or 457(b) contribution. Money you defer into a traditional retirement plan is exempt from federal income tax, so it comes out of Box 1, but it is not exempt from Social Security and Medicare tax, so it stays in Box 3 and Box 5. If the gap equals your contributions for the year, the form is correct and you were not taxed twice.
Do health insurance premiums lower all three W-2 wage boxes? Yes, when they run through a Section 125 cafeteria plan, which is how nearly all employer payroll deductions for medical, dental and vision premiums are set up. The same is true of a health FSA, a dependent-care FSA and an HSA funded through payroll. Unlike a retirement deferral, these come out of Box 1, Box 3 and Box 5 alike.
Does a Roth 401(k) change any of my W-2 wage boxes? No. Roth contributions are made from pay that has already been taxed, so they do not reduce Box 1, Box 3 or Box 5. The amount appears in Box 12 with code AA or BB as information only.
Why is my Box 3 lower than my Box 5? Because Social Security tax stops at the wage base — $184,500 for 2026 — and Medicare tax has no ceiling at all. Once you earn more than the wage base, Box 3 stops there while Box 5 keeps counting, so the gap between them is exactly the wages you earned above the ceiling.
All three of my wage boxes are the same number. Is that a mistake? No. If nothing came out of your pay before tax — no traditional retirement contribution and no Section 125 benefits — and your pay was under the Social Security wage base, then all three definitions of wages land on the same figure. Identical boxes are what a simple W-2 looks like.
Box 1 is higher than Box 5. Less common but legitimate: income counted for income tax in a different year than it was counted for Social Security and Medicare, usually deferred compensation or equity. Worth confirming with payroll.
Why does my last payslip's gross not match any box? Because no box is your gross. Box 1 is gross minus pre-tax retirement and pre-tax benefits, Box 3 and Box 5 are gross minus pre-tax benefits only.
Which W-2 box goes on my tax return as wages? Box 1. Box 3 and Box 5 are the wage figures Social Security and Medicare tax were computed from, and Box 4 and Box 6 are the amounts withheld for each of those two taxes.
What about the codes in Box 12 and Box 14? Different question, different tool: the W-2 Box 12 code decoder covers TA, TP and TT and the Box 14b tipped occupation codes.
Related
- W-2 Box 12 decoder and tipped occupation lookup — what the letter codes mean.
- Social Security wage base max-out date — when Box 3 stops growing.
- 401(k) calculator — what the contribution that created the Box 1 gap is doing for you.
- 2026 federal tax brackets — the rates Box 1 runs through.