W-2 Doesn't Match Your Final Pay Stub? Here's Why

This article is for general information, not tax or legal advice. Tax figures change most years. Verify current numbers with the IRS or talk to a tax professional before you file.

Your W-2 does not match your final pay stub, and that is almost certainly fine. The stub’s year-to-date gross is every dollar you were paid. Box 1 is only the slice of that subject to federal income tax. Two different definitions, two different numbers.

The question worth asking is whether your gap adds up. Below are four pieces of arithmetic you can run on your own two documents. If the numbers reconcile, you are done. If they don’t, the last section covers what to do about it.

A matching W-2 and pay stub is the exception

A pay stub is a cash record. It tells you what you earned and what came out, adding up to a year-to-date total at the bottom.

A W-2 is a tax record. It reports four separate definitions of “wages” across four boxes, each starting from your gross pay and applying a different set of rules. There is no box on the form that means “everything you were paid.”

For the two documents to agree, you would need an unusual year: no retirement contributions, no pre-tax health premiums, no FSA, no employer-paid life insurance above $50,000, and no check that straddled the December pay-date boundary. Most people fail at least one of those tests.

One example runs through the rest of this article. A single hourly employee, paid biweekly, whose final stub of the year shows:

• YTD gross pay: $58,000
• YTD traditional 401(k) at 5%: $2,900
• YTD pre-tax medical, dental, and vision premiums: $3,120
• YTD health FSA: $1,200
• Employer-paid group-term life coverage above $50,000: $84 of imputed income

That single stub produces four different W-2 numbers. Watch how.

Box 1 vs. your YTD gross: the pre-tax subtraction

Box 1, “Wages, tips, other compensation,” is federally taxable wages. The formula:

YTD gross − pre-tax deductions − non-taxable reimbursements + taxable fringe benefits = Box 1

For the example employee:

$58,000 − $2,900 − $3,120 − $1,200 + $84 = $50,864

That is a $7,136 gap between the stub and Box 1, and every dollar of it is explained.

These reduce Box 1: traditional 401(k), 403(b), and 457(b) deferrals; pre-tax health, dental, and vision premiums; HSA contributions made through a cafeteria plan; health FSA; dependent care FSA; qualified commuter and parking benefits.

These do not: Roth 401(k) contributions (already taxed), after-tax insurance premiums, union dues, wage garnishments, and loan repayments. If your entire gap is Roth, your Box 1 should equal your gross.

The contribution ceilings work as a sanity check on the size of your gap. The 2026 elective deferral limit for a 401(k) is $24,500 ($23,500 for 2025), the health FSA cap is $3,400, and HSA contributions top out at $4,400 individual or $8,750 family. A $9,000 gap on a $58,000 salary is plausible. A $40,000 gap is not, and that is worth a phone call.

To see how one deduction moves the whole chain, our 401(k) paycheck impact calculator shows the effect on taxable wages and take-home pay side by side. The gross pay vs. net pay guide covers the same distinction from the paycheck side.

Boxes 3 and 5 follow different rules, and that’s the giveaway

This is where a normal gap separates itself from a real error.

Box 3 is Social Security wages. Box 5 is Medicare wages. They follow different rules than Box 1, because retirement deferrals are still FICA wages even though they escape federal income tax.

Section 125 cafeteria plan items (pre-tax medical, FSA, HSA through the plan) reduce all three boxes. Traditional 401(k) deferrals reduce Box 1 only.

Back to the example. Boxes 3 and 5 subtract the $3,120 of premiums and the $1,200 FSA, add the $84 of imputed income, but leave the $2,900 deferral in place:

$58,000 − $3,120 − $1,200 + $84 = $53,764 in both Box 3 and Box 5.

Now the diagnostic. Compare your own three numbers:

• Box 1 < Box 3 = Box 5. Retirement deferrals. The difference should equal your YTD traditional 401(k) or 403(b) contributions almost to the dollar. In the example: $53,764 − $50,864 = $2,900. Exact.
• Box 3 < Box 5. You crossed the Social Security wage base. For 2026 that is $184,500 ($176,100 for 2025). Box 3 stops there while Medicare keeps counting. The Social Security wage base guide walks through mid-year truncation.
• Box 1 = Box 3 = Box 5. You had no pre-tax deductions at all, or only Roth ones.

Then check the withholding against the wages. This is the fastest way to catch a genuine payroll error:

• Box 4 ÷ Box 3 should equal 6.2%. Example: $53,764 × 6.2% = $3,333.37.
• Box 6 ÷ Box 5 should equal 1.45%, or slightly more if you crossed the Additional Medicare Tax threshold. Example: $53,764 × 1.45% = $779.58.

If either ratio is off by more than a rounding penny or two, something upstream is wrong. High earners should expect Box 6 to run above 1.45%, because the extra 0.9% Additional Medicare Tax kicks in on wages above $200,000.

Box 2, federal income tax withheld, has no equivalent formula. It depends on your Form W-4, your pay frequency, and any supplemental wages you received, so there is no percentage it “should” be. If you want to understand that number, see how federal withholding is calculated.

When your W-2 is higher than your pay stub

Almost every article on this topic assumes your W-2 came in low. Sometimes it comes in high, and the causes are different.

Imputed income. Benefits you receive without cash changing hands still count as wages. The common ones: employer-paid group-term life insurance on coverage above $50,000, personal use of a company vehicle, third-party sick pay, taxable relocation assistance, gift cards and other cash-equivalent awards, and health coverage for a domestic partner who is not a tax dependent.

These usually show up in Box 12 or Box 14 rather than in the stub’s gross pay line, which is why they are easy to miss. In the example, that $84 of group-term life is invisible on a casual read of the stub but sits inside all three wage boxes.

The pay-date boundary. W-2s are cash-basis. The date you were paid decides which year the wages land in, not the period you worked. A check covering the last week of December but issued on January 3 belongs on next year’s W-2, even though the stub for it says “December.”

The exception is constructive receipt. If the money was available to you in December, say a direct deposit that settled on December 31, it counts as December regardless of the check date printed on it.

A prior-year correction. If payroll fixed a mistake from last year during this year, the adjustment can land in the current W-2 without a matching line on any stub you recognize.

Box 16 state wages won’t match Box 1 either

Box 16 is state taxable wages, and states define that phrase however they like.

Pennsylvania taxes 401(k) deferrals, so a PA resident in our example would see Box 16 sitting above Box 1 by roughly the $2,900 deferral. New Jersey taxes many cafeteria plan and HSA contributions that federal rules exclude, pushing Box 16 higher still. Neither is an error, just two governments disagreeing about what counts as wages.

Multi-state and remote workers have a second wrinkle: your W-2 may carry several state rows, and their Box 16 amounts can sum to more than Box 1 when two states both claim the same wages under different sourcing rules. Credits on your state returns are what prevent you from paying twice.

What’s new on the 2026 W-2, and the mismatch it will cause

The IRS released the final 2026 Form W-2 in January 2026. It is the form you will receive in January 2027 for tax year 2026, and it introduces changes from the One Big Beautiful Bill Act that will generate a new category of “my W-2 doesn’t match my stub” confusion.

Box 12, code TP: total cash tips reported to your employer.

Box 12, code TT: qualified overtime compensation. This is the one that trips people up. TT reports only the premium portion of overtime, the extra half-time in time-and-a-half, not the full overtime dollars.

Work it through. At a $20 base rate, overtime pays $30 per hour. The premium is $10. If you worked 120 overtime hours, your stub shows $3,600 in overtime pay while Box 12 code TT shows $1,200. Both are right. They measure different things.

Box 12, code TA: employer contributions to a Trump account. Not relevant to wage reconciliation for most people.

Box 14 now splits into 14a (Other) and 14b, which holds up to two Treasury Tipped Occupation Codes.

TP and TT amounts do not reduce Box 1. The OBBB tips and overtime benefits are deductions you claim on your individual return, not wage exclusions on the W-2. Your tips and overtime are still fully inside Box 1. The codes exist so you can substantiate the deduction, nothing more.

How to tell a normal difference from a real error

Run this checklist. Anything that fails is worth a call to payroll.

1. Box 5 is greater than or equal to Box 3. Always. Medicare wages can never be less than Social Security wages. If they are, it is an error.
2. Box 3 does not exceed the year’s Social Security wage base ($184,500 for 2026, $176,100 for 2025).
3. Box 4 equals 6.2% of Box 3, and Box 6 equals 1.45% of Box 5 (plus 0.9% on wages above the Additional Medicare threshold). Off by more than rounding? Error.
4. Your Box 1 gap is fully explained by your YTD pre-tax totals from the final stub, plus or minus imputed income.
5. Your name, Social Security number, and address are correct. A transposed SSN causes real problems at the IRS.
6. You recognize the employer. A W-2 from a job you never held is an identity theft issue, and that follows a different path: report it to the IRS rather than treating it as a payroll correction.

If something genuinely looks wrong, the escalation ladder is short. Start with payroll or HR and ask for a Form W-2c, the corrected wage statement. Most discrepancies are fixed here, usually because a manual check or an imputed income entry got posted late.

If it is not resolved by the end of February, call the IRS at 800-829-1040 and the IRS will send your employer a letter requesting the correction.

If the filing deadline arrives before the correction does, you can still file. Form 4852 works as a substitute for a missing or incorrect W-2, using your final pay stub as the basis for your figures. If a corrected W-2 shows up afterward and the numbers differ, amend with Form 1040-X.

For employers: reconcile before you file, not after

If you run payroll, this question arrives in your inbox every January, and answering it well means your own books already tie out.

The chain to reconcile is payroll register → quarterly Forms 941 → W-2s → Form W-3. The four quarterly 941s should sum to your register totals, and the W-3 should sum to the W-2s you issued. The IRS publishes a year-end reconciliation worksheet built for exactly this comparison.

Breaks tend to come from the same handful of places:

• A manual or off-cycle check that never posted to the register.
• Imputed income booked in December without the corresponding tax gross-up.
• A voided check reissued in the following year, landing in the wrong period.
• An employee whose work state changed mid-year, splitting their state wages.
• Wage-base caps that failed to truncate correctly after an acquisition or a mid-year YTD import.

That last one causes the most damage, because it is silent. If Social Security stopped at the wrong dollar for a high earner, both Box 3 and Box 4 are wrong, and you will not notice until someone runs the 6.2% check on their own form.

Per-employee year-to-date tracking is what keeps that from happening. WorkLogs44 computes each employee’s gross, pre-tax deductions, federal taxable wages, Social Security, Medicare, and net pay in one pass, and carries YTD FICA, FUTA, and SUTA taxable earnings per person so the wage base truncates on the right paycheck rather than at year end. Running a whole team at once makes the employer-side totals easy to cross-check against what you filed.

For the recurring problems that create these breaks in the first place, see our guide to common payroll mistakes, or run quarterly numbers with the Form 941 tax calculator.

Frequently Asked Questions

Should my W-2 match my last pay stub?

No. Unless you had zero pre-tax deductions and no taxable fringe benefits all year, the two will differ. Your stub's YTD gross is everything you were paid. Box 1 is only the portion subject to federal income tax, after pre-tax deductions come out.

Why are Boxes 3 and 5 higher than Box 1?

Retirement deferrals reduce federal taxable wages but not Social Security or Medicare wages. The difference between Box 1 and Box 3 is usually your traditional 401(k) or 403(b) contributions for the year, almost to the dollar.

Why is Box 3 lower than Box 5?

Social Security tax stops at an annual wage base, $184,500 for 2026, while Medicare has no cap. If you earned more than the wage base, Box 3 stops at the cap and Box 5 shows your full Medicare wages.

My W-2 is higher than my pay stub. Is that possible?

Yes. Taxable fringe benefits get added to your W-2 wages without ever reaching your paycheck as cash: group-term life coverage above $50,000, personal use of a company car, third-party sick pay, and taxable relocation. Payroll calls this imputed income.

My last check of the year is not on my W-2. Why?

W-2s go by pay date, not by the period worked. Hours worked in late December but paid in January land on the following year's W-2. The exception is constructive receipt: if the money hit your account in December, it counts as December.

Why doesn't Box 16 match Box 1?

States define taxable wages their own way. Pennsylvania taxes 401(k) contributions, and New Jersey taxes many cafeteria plan and HSA contributions. In those states Box 16 will be higher than Box 1, and that is correct rather than an error.

Why is Box 12 code TT so much smaller than my overtime pay?

Code TT reports only the premium half of overtime, the extra half-time in time-and-a-half. On a $20 base wage paid $30 per overtime hour, TT captures $10 per hour, not $30. Your pay stub shows the full amount, so the two differ by design.

What should I do if my W-2 is genuinely wrong?

Contact payroll or HR first and ask for a Form W-2c. If it is not fixed by the end of February, call the IRS at 800-829-1040 and they will contact your employer. If the filing deadline arrives first, file using Form 4852, then amend with Form 1040-X if a corrected W-2 arrives later.