My W2 and Last Pay Stub Don’t Match: What to Do

Your W-2 form summarizes annual earnings and taxes withheld. Your last pay stub details income and deductions for a specific pay period, often the final one of the year. Finding a mismatch between these documents can be concerning, but it is common. Resolving discrepancies ensures accurate tax filing and correct financial records.

Common Reasons for Discrepancies

A common reason for differences between a W-2 and a final pay stub involves timing. Your W-2 reports wages paid within the calendar year. However, your last pay stub might cover a pay period extending into the next year, or reflect payments processed in the new year for work completed in the old year. This can cause a variance in reported year-end totals.

Pre-tax deductions also contribute to discrepancies. Contributions to plans like a 401(k), health insurance premiums, or Flexible Spending Accounts (FSAs) reduce your taxable wages reported in Box 1 of your W-2. However, these amounts are still part of your gross pay shown on a pay stub. For instance, if your gross pay is $50,000 but you contribute $5,000 to a 401(k), your W-2 Box 1 will show $45,000. These deductions lower your taxable income, potentially reducing federal, Social Security, and Medicare tax liability.

Non-taxable benefits or reimbursements can also lead to differences. Items like mileage reimbursements or specific allowances may appear on your pay stub, increasing your gross pay. However, they are not included in taxable wages on your W-2 because they are not considered taxable income by the IRS.

Year-end adjustments made by employers can also affect figures. Imputed income, the cash value of certain non-cash benefits like group-term life insurance or personal use of a company car, is added to your taxable wages on the W-2. These adjustments might not be fully reflected on your final pay stub. Simple human or system errors in payroll processing or reporting can also lead to incorrect calculations on either document.

How to Identify the Discrepancy

To identify differences between your W-2 and final pay stub, gather both documents for the relevant tax year. Compare them side-by-side. Your pay stub shows earnings and deductions for each pay period, including year-to-date totals.

Next, focus on key figures. Compare the amount in Box 1 (Wages, Tips, Other Compensation) of your W-2 to your year-to-date (YTD) taxable gross pay on your final pay stub, accounting for any pre-tax deductions. For Social Security and Medicare wages, compare W-2 Boxes 3 and 5 to your YTD Social Security and Medicare wages on the pay stub; these often include pre-tax deductions that affect Box 1 wages. Compare federal income tax withheld in W-2 Box 2, and Social Security and Medicare taxes withheld in Boxes 4 and 6, to the corresponding YTD withheld amounts on your pay stub.

If applicable, review W-2 Box 16 (State Wages, Tips) and Box 18 (Local Wages, Tips) against your YTD state and local wages and taxes on your pay stub. Systematically review all pre-tax and post-tax deductions, and any benefits listed on both documents, to understand their treatment. Creating a simple spreadsheet or list to track each figure and calculate the difference for each category can help identify where the mismatch lies.

Steps to Correct a Discrepancy

Once you identify a discrepancy between your W-2 and last pay stub, the first step is to contact your employer’s payroll or Human Resources department. Approach them politely and be prepared to provide all relevant documentation. This includes your W-2 form, the final pay stub for the tax year, and any calculations you made to highlight the discrepancy.

Your employer will review their records against the documentation you provide. If an error is confirmed, the employer is responsible for issuing a corrected W-2, formally known as a Form W-2c. Employers must address errors promptly to ensure accurate reporting to the Social Security Administration (SSA) and the IRS. If the issue is not resolved in a timely manner, you may follow up with your employer or contact the IRS for assistance; they can send a letter to your employer requesting a corrected form. Maintain copies of all communications and documents related to the discrepancy for your records.

Understanding Corrected W-2s (Form W-2c)

A Form W-2c, or Corrected Wage and Tax Statement, is an official IRS form employers use to rectify errors on a previously issued W-2. This form is used for inaccuracies in an employee’s name, Social Security number, or reported wage and tax amounts. The W-2c shows both the originally reported incorrect figures and the newly corrected figures for each affected box, providing a clear record of the adjustment.

If you receive a W-2c, use this corrected form when filing your tax return, rather than the original W-2. The information on the W-2c is what the IRS and Social Security Administration (SSA) will have on record. If you already filed your taxes using the incorrect W-2, you will likely need to file an amended tax return using Form 1040-X, Amended U.S. Individual Income Tax Return, along with the W-2c. This ensures your tax filing aligns with the corrected information reported by your employer.