How to Read Your W-2 Form - W-2 Tax Form - Wage and Tax Statement

Sep 19, 2026

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Guide to understanding the W-2 tax form, explaining how each labeled section is calculated and what the figures represent. Covers employee identifiers, employer details, wages, tips, and other compensation, plus deductions and inclusions such as taxable fringe benefits, stock option exercise income, deferred compensation, and Cafeteria 125 pre-tax benefits. Describes Social Security and Medicare wage rules, tips reporting, and federal income tax withheld. Also explains state and local wage, tax withholding, and related fields.

LanguageEnglish

CategoryForms

FormatPDF

Pages3

Reading Time1 min

AccessFree to download

Understanding Your W-2 Form

Form W-2 field overview

Income: wages, tips, and other compensation

Social Security and Medicare wages, tips, and withholding

State and local wages and income tax withholding

Taxes: federal income tax withheld

W-2 TAX FORM UNDERSTANDING YOUR W-2 Form This is a guide to understanding your W-2 tax form. If you have any questions that are not addressed in this diagram and information, please contact your customer support team. | | Employee’s social security number | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | B
| | | | | | 1 Wages, tips, other compensation
| | | | | | 2 Federal income tax withheld
| | | | | C Employer’s name, address, and ZIP code
| | | | | | 3 Social security wages
| | | | | | 4 Social security tax withheld
| | | | | | | | | | | 5 Medicare wages and tips
| | | | | | 6 Medicare tax withheld
| | | | | | | | | | | 7 Social security tips
| | | | | | 8 Allocated tips
| | | | | D Control number
| | | | | |

9 | | | | | | 10
| | | | | E
| | Last name | | | | 11
| | | | | |
12
C e | See instructions for box 12
| | | | F Employee’s address and Zip code
| | | | | |
13 | Statutory employee
| | Retirement plan
| Third-party sick pay
| | 12b C
e | | | | | | | | | | | 14 Other
| | | | | | 12c C e | | | | | | | | | | | | | | | | |
12d C e | | | | | 15 State Employer’s state ID number

| | | 16 State wages, tips, etc.
| 17 State income tax
| | | | 18 LocalWages, tips, etc.
| | | 19 Local income tax
| | | | 20 Locality name
| | | | | | | | | | | | | | | | | | A Form W-2 Wage and Tax Statement Department oftheTreasury–Internal Revenue Service INCOME 1 WAGES, TIPS, OTHER COMPENSATION – The earnings reflected in this box are calculated as follows: Gross Wages Includes all earnings plus Taxable Fringe Benefits and the income realized from the exercise of Stock Options. Deferred Compensation Includes contributions to 401(k) plans, 403(b), SEP, SERP, etc. Cafeteria 125 Benefits Includes deductionstaken on a pre-tax basis for voluntary benefits, including Healthcare, Parking and Transit reimbursement, Dental, Vision, Medical Flexible Spending Account (FSA), Supplemental Short Term Disability, and Cancer insurance. Group Term Life, Third Party Sick Pay (Taxable cost for coverage provided in excess of $50,000), Other Compensation 3 SOCIAL SECURITY WAGES – The wage base for the social security portion of FICA changes annually. ($160,200 for 2023) In other words, eligible earnings in excess of the annual wage base do not get taxed. Gross Wages Includes all earnings plus Taxable Fringe Benefits and the income realized from the exercise of Stock Options. Social Security Exempt Wages Includes the income realized on the exercise of qualified (incentive) stock options. Cafeteria 125 Benefits Includes deductionstaken on a pre-tax basis for voluntary benefits, including Healthcare, Parking and Transit reimbursement, Dental, Vision, Medical Flexible Spending Account (FSA), Supplemental Short Term Disability, and Cancer insurance. Group Term Life, Third Party Sick Pay (Taxable cost for coverage provided in excess of $50,000), Other Compensation copyright 2021 • [www.isolvedhcm.com](www.isolvedhcm.com) INCOME MEDICARE WAGES AND TIPS – There is no wage base associated with the Medicare portion of FICA. Eligible wages are calculated as follows: Gross Wages Includes all earnings plus Taxable Fringe Benefits and the income realized from the exercise of Stock Options. LESS LESS PLUS Medicare Tax Exempt Wages Includes the income realized on the exercise of qualified (incentive) stock options. Cafeteria 125 Benefits Includes deductionstaken on a pre-tax basis for voluntary benefits, including Healthcare, Parking and Transit reimbursement, Dental, Vision, Medical Flexible Spending Account (FSA), Supplemental Short Term Disability, and Cancer insurance. Group Ter

FAQs

What does Box 1 on a W-2 represent?

It reports wages, tips, and other compensation, calculated from gross wages and related taxable items such as taxable fringe benefits and income from stock option exercises, plus other specified components.

How are Social Security wages and withholding determined on the W-2?

Social security wages follow an annual wage base (e.g., $160,200 for 2023). Eligible earnings beyond the wage base are not taxed for Social Security, and the form explains the withheld portion accordingly.

What does Box 2 and Box 4 cover on the W-2?

Box 2 shows federal income tax withheld. Box 4 shows Social Security tax withheld based on a specified withholding rate applied to Social Security wages.

Sep 19, 2026

Upload by Angel