Understanding your W-2 Wage & Tax Statement

Updated January 14, 2026

BOXES a – e: The information in these boxes identifies you, the taxpayer, and your employer and appears on the left-hand side of the form. If your employer has a co-employment contractual arrangement with Xenium HR, then one of Xenium HR’s entities may be listed as your employer.

***Please verify the accuracy of your Social Security Number***

BOXES 1-20:  These boxes are used to report dollars and other codes that may be necessary for filing your tax report and your personal financial records.

Box	1:	Wages, tips, other compensation Reports your taxable wages, tips and other compensation. Taxable wages are your gross wages from which are subtracted any pre-tax deferrals such as deferred compensation plans, retirement plans, 401(k) plans, medical or dental premiums, HSA plan deductions, Section 125 Cafeteria Plan deductions.
Box	2:	Federal Income tax withheld Reports the total amount of federal income taxes withheld from your pay during the year. This amount is determined by the elections on your W-4 Certificate based on exemptions and any additional withholding. If you find that this number is too low or too high, you’ll want to make an adjustment to your withholding in 2026. https://www.irs.gov/pub/irs-pdf/fw4.pdf
Box	3:	Social security wages Reports your total wages subject to Social Security Tax. This figure is your gross wages less any pre-tax deferrals as identified above. 401(k) and deferred compensation plans are included in your Social Security taxable wages. It may be higher or lower than the number in Box 1. Social Security taxable wages cannot exceed $176,100 FOR 2025.
Box	4:	Social security tax withheld Reports the total of Social Security taxes withheld for the year. Social Security taxes are calculated based on a flat rate. The rate is 6.2%. The amount in this box should be equal to the amount in box 3 times 6.2%.
Box	5:	Medicare wages and tips Reports your total wages subject to Medicare taxes. The same reporting rules apply as Social Security wages except there is no cap on the Medicare wages
Box	6:	Medicare tax withheld Reports the total of Medicare taxes withheld for the year. Medicare taxes are figured based on a flat rate of 1.45%. For most taxpayers, this means that the figure in box 6 is equal to the figure in box 5 times 1.45%. If your earnings exceed $200,000, an additional .9% of Medicare is required to be withheld from your pay. This box should be equal to the amount in box 3 times 1.45%
Box	7:	Social security tips Tips reported by your employer and subject to Social Security tax are reported in box 7.
Box	8:	Allocated tips Tips that have been attributed to you and are considered as income. The reported amount is the difference between 8% of your gross sales for the employer less any tips reported in box 7. The amount reported here is not included in box 1, 3, 5 or 7.   *** if you receive tips, add the amounts in box 3 and box 7 to get your Social Security wages
Box	10:	Dependent care benefits Reports the total benefits paid on your behalf under a dependent care assistance program and consists of employer and employee pre-tax contributions toward the care of your eligible dependents. This amount (maximum of $5,000 for 2025) is excluded from your taxable federal, Social Security, Medicare and state wages shown in boxes 1, 3, 5 and 16.
Box	12:	Code See inst. For box 12 There may be several codes listed in box 12. Not all codes/amounts are taxable. The most common codes and amounts listed in this box are the following: Code C – Taxable cost of group-term life insurance over $50,000 (included in your wages in boxes 1, 3, 5 and 16). Code D – Elective deferrals to a 401(k) or deferred arrangement plan Code E – Elective deferrals under a section 401(b) salary reduction agreement Code F – Elective deferrals under a section 408(k)(6) salary reduction SEP Code J – Nontaxable sick pay Code S – Salary reduction contributions under a section 408(p) SIMPLE Plan Code V – Income from exercise of non-statutory stock option(s) Code W – Employer contributions (including employee contributions through a cafeteria plan) to an employee’s health savings account (HSA) Code AA – Designated Roth contributions under a 401(k) plan Code BB – Designated Roth contributions under a 403(b) plan Code DD – Cost of employer-sponsored health coverage

Box	13:	Statutory employee / Retirement plan / Third-party sick pay If any of the above apply to your wages or benefits, the appropriate box will be checked
Box	14:	Other This box is a “catch all” box and various items may be reported in this box if it doesn’t fit anywhere else. Common abbreviations: STT – Oregon Transit Tax WCT – Oregon Workers Compensation Tax (OR WBF) S125MV – Flexible Spending
Box	15:	State Employer’s state I.D. number State(s) in which your wages were reported.
Box	16:	State wages, tips, etc. Total amount of taxable wages, tips or other income subject to state tax.
Box	17:	State income tax Total amount of state income taxes withheld during the year.
Box	18:	Local wages, tips, etc. Your local taxable wages, tips or other income if you live and/or work in a locality that requires local tax withholding.
Box	19:	Local income tax Total amount of local income taxes withheld during the year.

An explanation of the differences between final pay stubs and the 

W-2 Wage and Tax Statement?

When you receive your W-2 you may notice that the earnings on your last paycheck stub are different from the reported earnings on your W-2. The scenarios below may provide clarification as to why there may be differences.

Scenario	Explanation	Example
You are enrolled in a health insurance plan that you pay through a pre-tax deduction.	If your insurance premiums were paid through pre-tax deductions, then the taxable wages in Boxes 1,3,5 and 16 will be lower than the year-to-date gross wages by the total amount of the pre-tax deductions.	Jane’s gross wages for the year were $30,000. During the year she paid $3,000 in pre-tax health insurance deductions. Jane’s W-2 wages are $27,000 ($30,000 - $3,000 = $27,000)
You contributed funds on a pre-tax basis to your company’s retirement plan	Retirement plans (such as a 401k) reduce only the taxable federal and states wages, and no impact on social security or Medicare wages. The retirement pre-tax deductions impact the wages reported in Boxes 1 and 16.	Cindy’s gross wages for the year were $30,000. During the year she contributed $2,500 in pre- tax deductions towards her retirement plan. Cindy’s federal and state wages on her W-2 are $27,500 ($30,000=$2,500=$27,500).
YTD gross payroll wages include non-taxable income items	Non-taxable income such as reimbursement for mileage or other non-taxable expenses that were reimbursed through payroll, are included in the YTD gross wages on paychecks. The removal of these non-taxable income items from gross wages lowers the taxable wages reflected on your W-2.	Joe’s gross wages are $30,000, but over the course of the year he received $500 in mileage reimbursement. Joe’s taxable Form W-2 wages are $29,500. ($30,000-$500 = $29,500).

***Your W-2 payroll and tax data is reported on your behalf as part of Xenium’s Services. Xenium is providing this summary as general information to assist you in understanding your W-2 Wage & Tax Statement. Pleas seek the advice of your certified tax accountant on specific personal tax matters.