Field-by-Field Guide
How to Read a W-2
Form W-2, the Wage and Tax Statement, is the form your employer files with the Social Security Administration each year to report what you were paid and what was withheld from your paychecks. Employers send employees their copies by the end of January, and the numbers on it flow directly into your federal and state income tax returns.
A W-2 looks dense, but it follows a fixed layout: lettered boxes on the left identify the employer and employee, numbered boxes on the right carry the money. Once you know what each box means, you can read any W-2 — from any employer or payroll provider — in about a minute.
Every section of a w-2, explained
Boxes a–f — identification
Box a is your Social Security number, box b the employer's EIN, box c the employer's name and address, box e your name, and box f your address. Check your SSN and the spelling of your name first — an SSN error here causes IRS and SSA matching problems.
Box 1 — Wages, tips, other compensation
Your federally taxable wages. This is usually lower than your gross salary because pre-tax items like traditional 401(k) contributions and pre-tax health premiums are excluded. This number goes on the wages line of your Form 1040.
Box 2 — Federal income tax withheld
The total federal income tax your employer withheld during the year. It is a prepayment, not your final tax — your 1040 reconciles it against what you actually owe.
Boxes 3 and 4 — Social Security wages and tax
Box 3 is the portion of wages subject to Social Security tax (capped at the annual wage base, so high earners may see box 3 lower than box 1 logic would suggest), and box 4 is the 6.2% tax withheld on it.
Boxes 5 and 6 — Medicare wages and tax
Box 5 is wages subject to Medicare tax — there is no cap, so it is often the biggest wage figure on the form. Box 6 is the Medicare tax withheld: 1.45%, plus the 0.9% Additional Medicare Tax on wages above $200,000.
Boxes 7 and 8 — tips
Box 7 reports tips you told your employer about (already included in boxes 1 and 5); box 8 reports allocated tips your employer assigned, which are not in box 1 and may need to be added on your return.
Box 10 — Dependent care benefits
Employer-provided dependent care assistance, such as a dependent care FSA. Amounts over the exclusion limit are taxable and appear in box 1.
Box 12 — coded amounts
A catch-all with letter codes. The ones you will see most: code D (traditional 401(k) deferrals), code W (employer + employee HSA contributions), code DD (cost of employer health coverage — informational only, not taxable), and code C (taxable group-term life insurance over $50,000).
Box 13 — checkboxes
Three checkboxes: statutory employee, retirement plan, and third-party sick pay. The retirement plan box matters because it can limit how much of a traditional IRA contribution is deductible.
Box 14 — Other
A free-form box employers use for anything else: state disability insurance, union dues, tuition assistance, or employer-specific items. Labels vary by employer, so read them literally.
Boxes 15–17 — state wages and tax
The state, the employer's state ID, state taxable wages, and state income tax withheld. If you worked in more than one state, each state gets its own line — some multi-state W-2s continue onto a second form.
Boxes 18–20 — local wages and tax
Local or city wages, local income tax withheld, and the locality name — only used where local income taxes apply.
How to read a w-2, step by step
- 1
Verify the identification boxes
Confirm your SSN (box a), your name (box e), and the employer EIN (box b) are correct before looking at any numbers.
- 2
Read box 1 against your final pay stub
Box 1 should equal your gross pay minus pre-tax deductions like traditional 401(k) and pre-tax health premiums. Your last December pay stub's YTD figures are the cross-check.
- 3
Check the withholding boxes
Boxes 2, 4, 6, and 17 are the taxes already paid on your behalf. Box 4 should be about 6.2% of box 3, and box 6 about 1.45% of box 5 — big deviations are worth questioning.
- 4
Decode box 12
Match each letter code against the code list printed on the back of the W-2 (or the IRS instructions) so you know which amounts are retirement, HSA, or informational.
- 5
Confirm the state lines
If you lived or worked in more than one state, make sure every state you earned in has its own line with sensible wage and withholding splits.
Red flags worth a second look
- ⚠An SSN or name that doesn't match your Social Security card — fix this with your employer before filing.
- ⚠Box 1 differing from your final pay stub by more than your pre-tax deductions explain.
- ⚠Box 4 or box 6 that isn't roughly 6.2% / 1.45% of its wage box.
- ⚠Missing state lines when you worked in multiple states.
- ⚠Receiving a W-2c (corrected W-2) after filing — you may need to amend.
What W2 Converter extracts automatically
Once you know how to read a w-2, you also know how tedious it is to copy the values out by hand. W2 Converter extracts these fields as structured data in seconds:
- ✓Wages, tips, other comp (Box 1)
- ✓Federal income tax withheld (Box 2)
- ✓Social Security wages & tax (Boxes 3-4)
- ✓Medicare wages & tax (Boxes 5-6)
- ✓State wages & tax (Boxes 15-17)
- ✓Employer EIN & name
FAQ
Why is box 1 lower than my salary?
Pre-tax deductions — traditional 401(k) contributions, pre-tax health/dental/vision premiums, HSA and FSA contributions — reduce federally taxable wages. Box 1 is your salary minus those items, which is why boxes 3 and 5 (different tax bases) are often higher.
Why are boxes 1, 3, and 5 different numbers?
Each box uses a different tax base. 401(k) deferrals reduce box 1 but not boxes 3 and 5; Social Security wages (box 3) are capped at the annual wage base while Medicare wages (box 5) are not. All three being different is normal.
What is code DD in box 12?
Code DD is the total cost of employer-sponsored health coverage — both what your employer paid and what you paid. It is informational only and is not taxable income.
What do I do if my W-2 is wrong?
Contact your employer's payroll department and ask for a corrected form (a W-2c). Do not just file with numbers you know are wrong — the IRS matches your return against the employer's copy.
Can I extract W-2 data automatically instead of typing it?
Yes — upload the W-2 (PDF, scan, or photo) and the parser returns every box as structured data with confidence scores, exportable to JSON, CSV, or Excel.