Why aren't the amounts in boxes 3 and 5 the same as box 1?

Box 1 (Wages, Tips and Other Compensation) represents the amount of compensation taxable for federal income tax purposes while box 3 (Social Security Wages) represents the portion taxable for social security purposes and box 5 (Medicare Wages) represents the portion taxable for Medicare tax purposes.

One of the most common differences between box 1 and boxes 3 and 5 is the amount of employee contributions to deferred compensation plans such as traditional 401(k) and 457. In the year the contributions are made, deferred compensation contributions reduce the employee's taxable income for income tax purposes, but not for social security or Medicare taxes.

NOTE: Employee contributions to deferred compensation plans are indicated on Form W-2 in box 12; code D for traditional 401(k) and code G for 457.