W-2 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.
At a glance — Box 5
- Box name
- Medicare wages and tips
- Reports to
- Not reported on 1040 directly.
- Check against
- Gross wages (minus Section 125 pre-tax deductions; not minus 401(k)).
What Box 5 means
Box 5 reports your wages subject to Medicare (HI) tax. It is calculated the same way as Box 3 — gross pay minus Section 125 pre-tax deductions, but NOT minus 401(k)/403(b)/457(b) deferrals — except Medicare has no wage base cap. For this reason, Box 5 equals Box 3 up to the Social Security wage base and then exceeds it for high earners.
Medicare tax is 1.45% on all wages, with an Additional Medicare Tax of 0.9% on wages above $200,000 (withheld by employer regardless of filing status). The true liability is computed on Form 8959 based on your filing status threshold ($250,000 MFJ, $200,000 single).
Tax return implications
- Used to verify Box 6 (Medicare tax withheld at 1.45%, plus 0.9% Additional Medicare Tax above $200,000).
- Feeds Form 8959 for Additional Medicare Tax reconciliation — you may owe more or be refunded depending on your filing status threshold.
- Unlike Social Security, Medicare does not build retirement benefits — it funds Medicare Part A.
Common pitfalls & things to check
- If you earn above $200,000 at one employer, expect 0.9% extra withheld automatically. If you have two employers each paying under $200k but combined above $250k MFJ, you may still owe Additional Medicare Tax on your 1040.
- Employer-paid health insurance premiums are excluded from Box 5 (they are not wages for any tax purpose).
Related W-2 boxes
Box 6 — Medicare tax withheld
1.45% of Box 5, plus 0.9% Additional Medicare Tax on the portion of Box 5 above $200,000 at any single employer.
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.
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.
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.