What Are FIT Taxable Wages?
FIT taxable wages (Federal Income Tax taxable wages) is the portion of your earnings subject to federal income tax withholding. This number appears on your pay stub and is usually less than your gross pay because certain pre-tax deductions reduce it.
Understanding FIT taxable wages is critical because it determines how much federal tax is withheld from each paycheck. If you see a discrepancy between your gross pay and FIT taxable wages, it typically means you have pre-tax deductions working in your favor.
How FIT Taxable Wages Are Calculated
The formula is straightforward:
FIT Taxable Wages = Gross Pay − Pre-Tax Deductions
Common pre-tax deductions that reduce your FIT taxable wages include:
- Traditional 401(k) contributions — the most impactful deduction for most workers. A $500/paycheck contribution reduces your FIT taxable wages by $500 each period.
- Health insurance premiums — employer-sponsored medical, dental, and vision premiums paid by the employee are typically pre-tax under Section 125 cafeteria plans.
- HSA contributions — Health Savings Account contributions (up to $4,300 individual / $8,550 family in 2025) are pre-tax.
- FSA contributions — Flexible Spending Account elections for healthcare or dependent care expenses.
- Commuter benefits — pre-tax transit and parking benefits up to $325/month (2025).
FIT Taxable Wages vs. Other Wage Types on Your Pay Stub
Your pay stub may show several different wage figures. Here is how they differ:
| Wage Type | What It Means | Pre-Tax 401(k) Deducted? |
|---|---|---|
| Gross Pay | Total earnings before any deductions | No |
| FIT Taxable Wages | Subject to federal income tax | Yes |
| SS Taxable Wages | Subject to Social Security tax (up to $176,100) | Yes |
| Medicare Taxable Wages | Subject to Medicare tax (no cap) | Yes |
| State Taxable Wages | Subject to state income tax (varies by state) | Usually yes |
Why FIT Taxable Wages Matter for Your Tax Return
Your W-2 Box 1 shows your annual FIT taxable wages. This is the starting point for your federal tax return (Form 1040). If it does not match your expectations, review your pre-tax deduction amounts. The most common reasons for a discrepancy between gross pay and Box 1 are 401(k) contributions, health insurance premiums, and HSA/FSA contributions.