Updated October 17, 2026. Quick answer: Boxes 1, 3 and 5 of Form W-2 are three different wage totals. Box 1 is the taxable wages figure that goes on the wages line of your return, box 3 is wages subject to social security tax, and box 5 is wages and tips subject to Medicare tax. They differ mainly because of elective deferrals and because only social security has a wage base limit.
Read box by box from the IRS form text: Form W-2c boxes c to i and Form W-2c boxes 1 to 20.
Form lines read one part at a time: Form 8959 Part I, Form 8959 Part III and Form 8959 Parts IV and V.
The three boxes in one place
Each box has a one-line definition in the General Instructions. Box 1: “Show the total taxable wages, tips, and other compensation that you paid to your employee during the year.” Box 3: “Show the total wages paid (before payroll deductions) subject to employee social security tax”. Box 5: “The wages and tips subject to Medicare tax are the same as those subject to social security tax (boxes 3 and 7) except that there is no wage base limit for Medicare tax.”
Each box has its own page: the box 1 page, the box 3 page and the box 5 page. The full set of boxes is in the W-2 boxes 1 to 8 guide.
Which pay or deduction changes which box
The table below lists only the entries where the instructions speak to both box 1 and box 3. Box 5 follows the box 3 list, which the next section explains.
| Kind of pay or deduction | Box 1 instructions | Box 3 instructions |
|---|---|---|
| Elective deferral (401(k), 403(b) and similar) | “do not include elective deferrals (such as employee contributions to a section 401(k) or 403(b) plan)” | “even though the deferrals are not includible in box 1” |
| Designated Roth contribution | “Designated Roth contributions made under a section 401(k) plan, a section 403(b) salary reduction agreement, or a governmental section 457(b) plan.” | “Also report in box 3 designated Roth contributions made under a section 401(k) plan” |
| Signing bonus | “Total wages, bonuses (including signing bonuses), prizes, and awards paid to employees during the year.” | “Signing bonuses an employer pays for signing or ratifying an employment contract.” |
| Taxable group-term life insurance cost | “Taxable cost of group-term life insurance in excess of $50,000.” | “Taxable cost of group-term life insurance over $50,000 included in box 1.” |
| Employee HSA contribution | “Employee contributions to a health savings account (HSA).” | “do not include employee contributions to an HSA that were made through a cafeteria plan” |
| Tips you reported to your employer | “Total tips reported by the employee to the employer (not allocated tips).” | “but not including social security tips and allocated tips” |
Read each row across: the box 1 cell says what box 1 does with the item, and the box 3 cell says what box 3 does with it. A deferral is the clearest case. Box 1 leaves it out, while box 3 includes it.
How box 5 relates to the other two
Box 5 does not have its own long list. The instruction sends the employer back: “payments to report in this box.” So the rows in the table above apply to box 5 as well as box 3, with two differences. The first is the wage base: box 5 has no limit. The second is tips: box 3 does not include social security tips, but box 5 covers wages and tips, and the instructions say to include tips reported in box 7 in box 5. For box 3, “The total of boxes 3 and 7 cannot exceed $176,100 (2025 maximum social security wage base).” For box 5, “There is no limit on the amount reported in box 5.”
The instruction example puts the two side by side: “Enter in box 3 (social security wages) 176100.00, but enter in box 5 (Medicare wages and tips) 199750.00.” When wages are at or below the base, “the amounts entered in boxes 3 and 5 will be the same”.
A worked comparison
A labelled illustration, not an IRS example. Take a worker with $60,000 in wages, a $5,000 401(k) elective deferral and no other items, using the rules in the table. Box 1 is $60,000 minus $5,000 = $55,000. Box 3 is $60,000 because the deferral is reported there. Box 5 follows box 3, so it is also $60,000.
Now take a worker with no deferrals and pay above the base, using the instructions’ own example figures. Box 1 and box 5 would be $199,750 and box 3 would be $176,100. The difference is $199,750 minus $176,100 = $23,650. The actual box 1 figure on a real form depends on every item in the employer’s records, so use the printed numbers on your own W-2 and not this arithmetic.
Where each box goes
Only some of these totals are entered directly on your return. For box 1: “Enter this amount on the wages line of your tax return.” For box 5: “You may be required to report this amount on Form 8959.” See the Additional Medicare Tax page for that form. The social security tax withheld on box 3 wages is on the box 4 page, and the withholding boxes 2 and 6 are on the box 2 page and the box 6 page.
If your form carries a box 12 code that you do not recognize, the box 12 vs box 1 page and the box 12 codes page cover how those items relate to box 1. The wage base for later years is on the social security wage base page.
Edition and box numbers
The primary read for this page is the 2025 edition of Form W-2, the one an employee receives in early 2026 for tax year 2025. The printed form carries the line “Wage and Tax Statement 2025”, and the matching General Instructions for Forms W-2 and W-3 (2025) were read alongside it. The 2026 edition of the form and of the General Instructions was the current one irs.gov was serving on 2026-10-17, and both were compared. The box definitions are the same in both editions. The figures that differ are the wage base: the 2025 General Instructions use $176,100 and the 2026 edition uses “$184,500 (2026 maximum social security wage base)”, and the box 1 line on the form itself also differs. The 2026 form adds the words “unless those instructions direct you to report it elsewhere”. Boxes 1, 3 and 5 keep their numbers in both editions. Check the tax year printed on the form you received, because the figures and wording on your copy come from that year’s edition, and the box numbers on your copy are the ones to follow.
Common mistakes
- Reading the three boxes as one number. The box 1 instructions say “do not include elective deferrals”, while box 3 says “even though the deferrals are not includible in box 1”.
- Assuming box 3 and box 5 always match. The instructions say they match when “wages paid was $176,100 or less” for 2025, and box 5 has no wage base limit.
- Entering box 3 or box 5 on the wages line. The form sends box 1 there with “Enter this amount on the wages line of your tax return.”.
Related: W-2 box 12 vs box 1, W-2 box 12 codes explained, the Additional Medicare Tax, the social security wage base, and Form W-4.
Sources
- General Instructions for Forms W-2 and W-3 (2025): IRS archived PDF (irs.gov)
- General Instructions for Forms W-2 and W-3 (2026): https://www.irs.gov/pub/irs-pdf/iw2w3.pdf
- Form W-2, Wage and Tax Statement (2025), with the Notice to Employee and Instructions for Employee: IRS archived PDF (irs.gov)
- Form W-2, Wage and Tax Statement (2026), with the Notice to Employee and Instructions for Employee: https://www.irs.gov/pub/irs-pdf/fw2.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.