6 Tips for Reviewing Your W-2: Why Your Wages May Not Match Your Pay Stubs
Each January, employees receive their Form W-2 and immediately do what most of us do: compare it to year-to-date (YTD) wages on their final pay stub. When the numbers don’t match, it can raise questions, or even concern, that something is wrong.
In most cases, differences between YTD wages and W-2 wages are expected, normal, and correct. Understanding what each figure represents can help you review your W-2 with confidence and avoid unnecessary confusion during tax season.
Below are key tips to help you understand what you’re seeing and what actually matters.
Tip #1: Understand the Difference Between YTD Wages and W-2 Wages
YTD wages reflect your total gross earnings for the year before deductions. This includes all regular pay, overtime, bonuses, commissions, and other earnings.
W-2 wages, on the other hand, reflect taxable wages, which are calculated according to IRS rules. These wages appear in different boxes on the W-2 and may exclude certain earnings or include adjustments that don’t show up the same way on your pay stubs.
Because these figures measure different things, they are not expected to match exactly.
Tip #2: Know That Pre-Tax Deductions Reduce W-2 Wages (But Not Gross Pay)
One of the most common reasons YTD wages and W-2 wages differ is pre-tax deductions.
Examples include:
401(k) contributions
Health, dental, or vision insurance premiums
Health Savings Account (HSA) or Flexible Spending Account (FSA) contributions
These deductions reduce your taxable wages, which lowers what appears in certain W-2 boxes, but they do not reduce your gross YTD earnings.
If you participated in any pre-tax benefit during the year, your W-2 wages will almost always be lower than your YTD wages.
Tip #3: Compare the Right W-2 Boxes (They Don’t All Follow the Same Rules)
Many people assume all W-2 wage boxes should match. They won’t.
Box 1 – Federal taxable wages
Box 3 – Social Security wages
Box 5 – Medicare wages
Each box follows different tax rules. For example:
Some deductions reduce Box 1 wages but not Boxes 3 or 5
Social Security wages are capped annually, while Medicare wages are not
Certain benefits may be taxable for one purpose but not another
As a result, it’s common - and correct - for these boxes to differ from each other and from YTD wages.
Tip #4: Look for Imputed Income
Some benefits are considered taxable income even though you never received cash for them. This is known as imputed income.
A common example is:
Employer-paid life insurance coverage over $50,000
Imputed income increases your W-2 taxable wages, but it may not appear as regular earnings on your pay stubs. This can make W-2 wages appear higher than expected when compared to YTD totals.
Tip #5: Account for Payroll Adjustments During the Year
Payroll activity doesn’t always happen cleanly in a straight line. W-2 totals may reflect:
Payroll corrections
Voided or reissued checks
Manual checks or off-cycle payrolls
Retroactive adjustments
These corrections are included in taxable wage calculations even if they don’t line up neatly with a single YTD figure on a pay stub.
Tip #6: Watch for Timing Differences at Year-End
Timing matters, especially around December and January.
If a payroll is:
Earned in December but paid in January, or
Paid in December for work performed earlier
Your final YTD wages and W-2 wages may reflect different reporting periods. W-2s are based on when wages are paid, not when they are earned.
This is a very common and completely normal source of differences.
The Bottom Line
YTD wages reflect gross earnings.
W-2 wages reflect taxable earnings.
Because they serve different purposes, differences between the two are expected and do not indicate an error.
If your W-2 reflects the benefits you elected, your earnings throughout the year, and standard tax rules, it is very likely accurate, even if it doesn’t match your final pay stub dollar-for-dollar.
Understanding these distinctions can make tax season less stressful and help you focus on what really matters: filing accurately and on time.