Year to Date (YTD): What It Means for Employers

What it means in practice

On a pay stub or in a payroll register, the YTD column adds the current payment to everything paid since January 1: gross pay, wages subject to each tax, each tax withheld, and each deduction. The federal payroll tax limits on this page all run on the calendar year, so for payroll tax purposes YTD means calendar YTD by pay date.

Paid, not earned. The Social Security wage limit "relates to the amount of remuneration received during any 1 calendar year" and "not to the amount of remuneration for employment performed in any 1 calendar year" (26 CFR 31.3121(a)(1)-1(a)(2)). The 2026 Form W-2 and W-3 instructions give the practical example: wages for work from December 13 through December 26, 2026, paid on January 1, 2027, go on the 2027 Form W-2. Publication 15 adds that federal deposit rules "are based on the dates when wages are paid (cash basis)." So the pay date decides which year's YTD a payment joins, and every YTD total resets with the first payroll of the new year.

YTD is counted per employer. The Social Security wage base applies to the wages each employer pays, not to the employee's combined earnings. If an employee works for more than one employer in a year, "the annual wage limitation does not apply to the aggregate remuneration received from all of such employers" (26 CFR 31.3121(a)(1)-1(a)(3)). Publication 15 says it generally does not matter whether a worker "has the maximum amount of social security tax withheld by another employer." An employee with too much Social Security tax withheld across several jobs may claim the excess as a credit on the income tax return; if one employer withheld too much, the IRS says "your employer should adjust the excess for you" (IRS Topic 608).

The successor exception. When an employer acquires substantially all the property of a business, or of a separate unit of it, and keeps an employee on, wages the predecessor paid that employee earlier in the same calendar year count toward the successor's Social Security wage base (26 CFR 31.3121(a)(1)-1(b)). Publication 15 says the same carryover applies to the $200,000 Additional Medicare Tax threshold. Its example: an employee who received $2,000 from the seller before an early 2026 asset purchase is subject to Social Security tax on only the first $182,500 ($184,500 minus $2,000) of the buyer's wages.

Social Security wage base. For 2026 the rate is 6.2% each for the employer and the employee, and the wage base is $184,500 (IRS Publication 15; IRS Topic 751). The Form 941 instructions say to "stop paying social security tax on and entering an employee's wages on line 5a when the employee's taxable wages and tips reach $184,500 for the year," and to keep withholding income tax and Medicare tax on all wages for the whole year. On the year-end Form W-2, boxes 3 and 7 together cannot exceed $184,500, and box 4 "should not exceed $11,439 ($184,500 x 6.2%)." See FICA for the full tax.

Additional Medicare Tax. Employers must withhold 0.9% on wages paid to an employee "in excess of $200,000 in a calendar year," starting in that pay period and continuing each pay period through year end; there is no employer share (Publication 15). The IRS Q&A says withholding applies without regard to filing status or other employers' wages, that an employer "cannot honor a request to cease withholding" when it is required, and that there is no requirement to notify the employee. An employer that fails to withhold is liable for the tax unless the employee pays it. Only the part over the threshold is subject to the tax: in the IRS example, an employee with $180,000 of YTD wages who receives a $50,000 bonus has Additional Medicare Tax withheld on $30,000 of it.

FUTA wage base. For 2026, FUTA tax is 6.0% on the first $7,000 paid to each employee during the year, and the employer may take a credit of up to 5.4% for state unemployment tax, leaving 0.6% (Publication 15). Only the employer pays it. For deposits, figure FUTA each quarter on taxable wages paid that quarter and "stop depositing FUTA tax on an employee's wages when taxable wages reach $7,000 for the calendar year." On Form 940, line 5 reports the total paid to each employee above the $7,000 wage base. A successor may count wages the predecessor paid to continuing employees if the predecessor had to file Form 940 (Form 940 instructions). Publication 15 notes, "Your state wage base limit may be different."

Supplemental wages over $1 million. If a supplemental payment, "together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess is subject to withholding at 37%," without regard to the employee's Form W-4, and payments from all businesses under common control count (Publication 15 (2026)). This test runs on YTD supplemental wages only, not total pay. For payments at or below the threshold, see supplemental wages for the 22% flat rate and aggregate method.

401(k) deferral limit. For 2026, the limit on 401(k) elective deferrals is $24,500, plus an $8,000 catch-up for employees 50 or older, or $11,250 instead for ages 60 to 63 (IRS News Release IR-2025-111). The IRS says an individual must "aggregate all elective deferrals you made to all plans," and for plans of unrelated employers "it is up to you to monitor your deferrals." Excess deferrals should be reported to the plan administrator before April 15 of the following year for distribution. The W-2 instructions show that excess deferrals still appear in full in box 12 with code D; in their 2026 example, an employee who deferred $26,500 is reported as D 26500.00.

HSA contribution limit. For calendar year 2026, the HSA limit is $4,400 for self-only and $8,750 for family coverage under a high deductible health plan (Rev. Proc. 2025-19), plus $1,000 for an eligible individual 55 or older (IRS Publication 969). Employer contributions that are excludable from income reduce what anyone else can contribute, including amounts the employer contributes through a cafeteria plan, and excess employer contributions are included in the employee's gross income (Publication 969). Report all employer contributions, including the employee's cafeteria plan contributions, in box 12 of Form W-2 with code W (W-2 instructions). See health savings account (HSA).

How YTD ties to Form 941 and Form W-2. Form 941 reports each quarter's wages, so the four quarters added together should equal the YTD figures at December 31. Publication 15 and the W-2 instructions say to make sure Form W-3 totals equal the Forms W-2, then compare Form W-3 with the four quarterly Forms 941 for income tax withheld, Social Security and Medicare wages, and Social Security and Medicare taxes. The 941 tax amounts "should be approximately twice the amounts shown on Form W-3," because Form 941 includes both shares. Additional Medicare Tax is a valid reason for a mismatch, since it has no employer share. Publication 15 says to keep the reconciliation "so you'll have a record of why amounts didn't match."

Pay stubs: the federal baseline. DOL says "the FLSA does not require an employer to provide employees pay stubs," though it does require accurate records of hours worked and wages paid (DOL FLSA FAQ). The required FLSA records include "total wages paid each pay period" and the "date of payment and the pay period covered by payment" (29 CFR 516.2(a)(11) and (12)), and the Act "requires no particular form for the records" (DOL Fact Sheet #21). The per-payment records are the building blocks of YTD, but federal law does not require a YTD column.

Where states differ. States decide what a pay stub must show, so check your own state through DOL's state labor offices directory. Two examples, not national rules. California: the Labor Commissioner lists the Labor Code 226(a) items for the itemized wage statement given semimonthly or with each payment, including gross wages, total hours (not for salaried exempt employees), all deductions, net wages, pay period dates and all hourly rates with hours worked at each; YTD totals are not on that list. Employers must also show available paid sick leave on the pay stub or a document issued the same day as the paycheck (DIR Paid Sick Leave FAQ). Illinois: since January 1, 2025, employers must provide pay stubs each pay period showing hours worked, pay rates, overtime pay and deductions, keep a copy of each for three years from the payment date, and let current or former employees request copies at least twice in a 12-month period (Illinois Department of Labor). State payroll taxes have their own YTD caps: California's 2026 unemployment insurance taxable wage limit is $7,000 per employee, but State Disability Insurance has had no taxable wage limit since January 1, 2024 (California EDD DE 44).

Recordkeeping. FLSA payroll records are kept at least three years and the records wage computations are based on at least two years (DOL Fact Sheet #21; 29 CFR 516.5 and 516.6). The IRS says to keep employment tax records at least 4 years, including "amounts and dates of all wage, annuity, and pension payments," Forms W-4 and dates and amounts of tax deposits (Publication 15).

Questions employers ask. Does a new hire's YTD from a prior job count? Not for the Social Security wage base or the $200,000 threshold, unless you are a successor employer (26 CFR 31.3121(a)(1)-1; Publication 15; IRS Q&A). Can an employee ask us to stop Additional Medicare Tax? No, if withholding is required (IRS Q&A). Does FUTA appear in the employee's YTD deductions? No; it "isn't withheld from the employee's wages" (Publication 15). Confirm specifics with a qualified professional.

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