7 — Social Security Tips Updated for tax year 2025

What this line means

The amount of tips you reported to your employer that are subject to Social Security tax. These tips are already included in Box 1 (your total wages) and Box 5 (Medicare wages), but they are broken out separately here because Social Security tax on tips is calculated and reported distinctly. Box 7 combined with Box 3 should not exceed the Social Security wage base of $176,100.

Does this apply to you?

• You work in a tipped occupation (restaurant server, bartender, valet, hairstylist) and reported tips to your employer
• You reported tips of $20 or more in any month to your employer as required
• You want to verify that your reported tips are included in your Social Security earnings record

Easy to overlook

Tips in Box 7 are already in Box 1 Filers sometimes add Box 7 to Box 1 when preparing their return, double-counting their tip income. Box 7 is an informational breakout, not an additional amount. Your total compensation in Box 1 already includes these tips. The same tips are also already included in Box 5. ¹ [SOURCE: IRS Publication 531 — Reporting Tip Income]

Unreported tips still owe Social Security and Medicare tax If you earned tips but did not report them to your employer, they do not appear in Box 7 — but you still owe Social Security and Medicare tax on them. You must use Form 4137 to calculate and pay the FICA tax on unreported tips. The IRS uses tip allocation reports and industry averages to identify underreporting. ² [SOURCE: IRS Form 4137 — Social Security and Medicare Tax on Unreported Tip Income]

Watch out for this

Failing to report cash tips to your employer by the 10th of the following month. Tips under $20 in any single month are exempt from this reporting requirement, but once you cross $20, all tips for that month must be reported. Unreported tips reduce your Social Security earnings history, which can lower your future Social Security benefits.

Related lines on your return

• Box 1 — Form W-2 — Total wages; already includes the tips shown in Box 7
• Box 8 — Form W-2 — Allocated tips; tips your employer assigned to you that you did not report
• Box 3 — Form W-2 — Social Security wages; already includes the tip amounts shown in Box 7