It's the same as why you wouldn't measure your weight in ounces, but neither would you weigh something very light in pounds - you want a convenient number which is easy to interpret. PC is short for parsec and it's a unit of measurement equal to 3,000,000,000,000,000,000 cm!
Take your annual covered earnings (the earnings on which you pay Social Security payroll taxes), multiply it by that year's index factor and you will obtain your indexed wage for each year you have worked. Next, add up all these indexed wages and divide them by 35 to determine your average wage.
If you are adjusting an employee's social security or Medicare wages or tips for a prior year, you must file Form W-2c, Corrected Wage and Tax Statement, with Form W-3c, Transmittal of Corrected Wage and Tax Statements.o not include tips on this line. Stop reporting an employee's wages (including tips) when they reach $84,900 for 2002. However, continue to withhold income and Medicare tax for the whole year on wages and tips even when the social security wage base of $84,900 is reached.