Why Don’t My W-2 Wages Match My Final Pay Stub?
Many employees notice that the wage amounts on their Form W-2 do not match their final pay stub for the year. This is normal and expected. The difference is caused by how various types of pay and deductions are taxed.
This tip sheet explains how W-2 wages are calculated and how to reconcile them with your year-end pay records.
Start With Your Gross Pay
Your gross pay is the total amount you earned during the calendar year before any deductions.
Gross pay includes:
- Regular pay
- Overtime
- Shift differentials
- Bonuses or incentive pay
- Other taxable earnings
You can usually find your year-to-date gross pay on your final pay stub of the year.
Note: Gross pay does not appear in any single W-2 box.
W-2 Box 1: Federal Wages
Box 1 shows wages subject to federal income tax.
Federal wages equal gross pay minus pre-tax deductions excluded from federal tax.
Common UVA Pre-Tax Deductions That Reduce Box 1 Wages:
- ORP / 403(b) employee contributions (traditional, pre-tax elections)
- Health, dental, and vision insurance premiums
- Health Savings Account (HSA) employee contributions
- Flexible Spending Accounts (Health Care and Dependent Care FSAs)
- Pre-tax parking or transit deductions, if elected
Because of these deductions, Box 1 wages are often lower than your gross pay.
W-2 Box 16: State Wages
Box 16 shows wages subject to state income tax.
In many cases, Virginia state wages match federal wages. However, they may differ if you work in another state or worked in more than one state during the year.
W-2 Boxes 3 and 5: Social Security & Medicare Wages
- Box 3 – Social Security Wages
- Box 5 – Medicare Wages
These boxes often show higher wages than Boxes 1 and 16 because fewer deductions are exempt from Social Security and Medicare taxes.
UVA Deductions That Generally Do Not Reduce Boxes 3 and 5:
- ORP / 403(b) employee contributions
These retirement contributions are excluded from federal and state income tax but remain subject to Social Security and Medicare taxes.
Important Differences:
- Social Security wages stop increasing once the annual wage limit is reached
- Medicare wages have no wage limit and may include Additional Medicare Tax for higher earners
Why the Boxes Are Different (At a Glance)
- Gross pay = total earnings
- Federal/State wages = gross pay minus income-tax-exempt deductions
- Social Security/Medicare wages = gross pay minus fewer deductions
Because the tax rules differ, no single W-2 box will match your final pay stub exactly.
How to Reconcile Your W-2
1. Start with your gross year-to-date pay
2. Subtract pre-tax deductions (such as ORP/403(b), insurance, FSA, HSA) to calculate Federal/State wages
3. Add back deductions that are taxable for Social Security and Medicare (such as retirement contributions)
4. Compare your totals to the amounts in Boxes 1, 3, 5, and 16
If the amounts align, your W-2 is correct.
When to Contact Payroll
Contact Payroll if:
- A W-2 wage box appears clearly incorrect
- Earnings or deductions are missing or duplicated
- You had multiple jobs, appointments, or payroll groups and believe not all pay is included
If differences are due to tax treatment, no correction is required.
For more help: Keep your year-end pay stub handy when reviewing your W-2—it is the best tool for understanding how your wages were calculated.
For a more detailed walkthrough of the boxes on your W-2, visit our resource "How do I read my W-2?"