W-2 Filing Variance

The variance between the W-2 wages and the 941 totals usually indicates a difference in how taxable wages were accumulated throughout the year vs. how year-end wages are calculated. This commonly occurs with retro pay adjustments, manual check adjustments, taxable benefits, supplemental wages, or void/reissued checks.

To identify the source of the mismatch, the following reports are the most helpful:

• PR640503 – Payroll Register Summary (YTD wages/taxes by employee)
• PR642090 – Employee Wage & Tax Summary (differences by tax type)
• PR642100 – Tax Summary by Tax Code (compare to 941 totals)
• PR620500 – Earnings Summary by Employee (verify taxable vs non-taxable earnings)

Things to verify during reconciliation:
• Taxable benefits that hit W-2 but not 941 quarterly totals
• Voids/reissues that crossed quarters
• Retro adjustments
• Supplemental FIT wage handling
• FICA wage limits on high earners
• Pay code taxability setup

For the employee showing $3,018 wages and $214 taxes, that pattern often points to FICA-only wages (6.2% SS + 1.45% Medicare) with no FIT withholding, which can happen with specific earnings types or supplemental pay. Reviewing the employee’s taxability matrix and earnings type will likely clarify that case.

After reconciling these items, re-running the W-2 process will typically bring the totals back in line.

The payroll register matches the 941.  Taxes and wages were reported to the IRS. 

The W2 must match the 941s submitted, we are unsure why they are different and how can they be fixed?

If the payroll register matches the 941, then the variance is almost always coming from year-end taxable wage adjustments rather than the quarterly payroll filings. The 941 reports are driven by taxable wages throughout the year, while the W-2 uses the final YTD taxable wages after adjustments (including fringe/taxable benefits and voided/reissued checks).

A couple targeted checks that typically reconcile this scenario:

1. Taxable Benefits / Fringe Items
   These increase W-2 wages without impacting the quarterly 941 totals.

2. FICA / Medicare Base Adjustments
   Prior-year adjustments or supplemental wages can add FICA-only wages (common in the pattern you mentioned).

3. Voids/Reissues Across Quarters
   Voids hit the W-2 year, but won’t affect earlier 941 filings.

4. Employee Taxability Matrix
   Differences between FIT taxable vs. FICA taxable wage definitions can push W-2 wages higher than the 941.

If you run the PR642090 (Employee Wage & Tax Summary) side-by-side with the PR642100 (Tax Summary by Tax Code) for YTD, it will usually show exactly where the divergence starts.

Once you identify whether it’s fringe, supplemental, or voids, the W-2 will line up with the 941 totals once the year-end adjustments are finalized.