W-2 Box 1 — Wages, tips, other compensation
Your taxable federal wages for the year — gross pay minus pre-tax deductions like traditional 401(k), Section 125 cafeteria plan contributions, and pre-tax HSA.
At a glance — Box 1
- Box name
- Wages, tips, other compensation
- Reports to
- Form 1040, Line 1a
- Check against
- Your final (year-end) pay stub's YTD taxable federal wages. Box 1 is almost always less than Box 3 and Box 5 if you contribute to a traditional 401(k).
What Box 1 means
Box 1 reports the wages subject to federal income tax withholding for the year. It is your gross pay reduced by pre-tax deductions such as traditional 401(k)/403(b) elective deferrals (Box 12 code D/E), Section 125 cafeteria plan contributions (health/dental premiums, FSA, dependent care FSA), and pre-tax HSA payroll contributions (Box 12 code W). It does not include non-taxable reimbursements or most employer-paid benefits.
Box 1 is typically less than Box 3 (Social Security wages) and Box 5 (Medicare wages) because FICA does not exempt most 401(k)/403(b) deferrals the way federal income tax does. Roth 401(k) contributions (code AA) are the opposite — included in Box 1 because they are after-tax.
If you had multiple employers, each issues its own W-2 and each Box 1 is reported separately on Line 1a (they sum).
Tax return implications
- Flows to Form 1040, Line 1a (total W-2 wages).
- Combined with other income to compute federal income tax, EITC eligibility, IRA deduction phase-outs, and the Saver's Credit.
- Determines Roth IRA contribution limits (which phase out based on MAGI).
Common pitfalls & things to check
- If Box 1 is higher than you expect, check whether you had Roth 401(k) contributions (code AA) — those are after-tax and included in Box 1.
- Imputed income from group-term life insurance over $50,000 (code C) is added to Box 1 even though no cash changed hands.
- If you exercised nonqualified stock options (code V) or had ISO AMT preference items, Box 1 may be noticeably higher than your normal salary.
For 2025 returns (filed by April 15, 2026)
- Standard deduction (single / MFJ)
- $15,750 / $31,500
- MFS $15,750 · HoH $23,625. Box 1 wages below this threshold may owe no federal income tax.
Values sourced from central tax-year config at build time — update automatically on FY rollover.
FAQ
Why is my Box 1 less than my salary?
Pre-tax deductions reduce Box 1 below your gross salary. The most common are traditional 401(k)/403(b) deferrals, Section 125 health premiums, FSA contributions, and pre-tax HSA contributions.
Does Box 1 include my bonus?
Yes — cash bonuses are part of Box 1 (and Boxes 3 and 5). The higher tax rate you see on a bonus check is a withholding convention (22% supplemental rate), not a higher tax rate — year-end reconciliation happens on your 1040.
Related W-2 boxes
Box 2 — Federal income tax withheld
Total federal income tax your employer withheld from your paychecks during the year, based on your Form W-4 elections.
Box 3 — Social security wages
Your wages subject to Social Security tax, capped at the annual wage base. Differs from Box 1 because traditional 401(k) deferrals are not excluded.
Box 4 — Social security tax withheld
The Social Security tax your employer withheld — exactly 6.2% of Box 3 (plus Box 7 tips), capped at 6.2% of the annual wage base.
Box 5 — Medicare wages and tips
Your wages subject to Medicare tax. Unlike Social Security, there is no wage base cap — Box 5 can exceed Box 3 on high salaries.
Reconciling your W-2 at tax time? Use the paycheck calculator to verify expected federal, Social Security, and Medicare withholdings on your salary, and the federal income tax calculator to estimate your refund or balance owing before you file.
Sources
W-2 box definitions per IRS General Instructions for Forms W-2 and W-3 and IRC §6051. Rates and thresholds current for tax year 2025 (file by April 15, 2026); 2026 figures included where published.