Form W-2 Box 1 Wages, Tips & Other Compensation
This should equal the gross wage that the employer paid plus tips the employee received from customers, that the
employee reported to the employer.
Box 3 Social Security Wages
This should equal the gross wage that the employer paid
Box 7 Social Security Tips
This should equal the tips that the employee received from customers, that the employee
reported to the employer
Box 3 + Box 7 equals Box 1
The gross wage expense to the employers business is what the employer paid to the employee. The employee received tips from the customers not the employer.