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.
Medicare wages and Social Security Wages. aliaricam3. On most W-2s, they are the same amount. However, employee contributions to either a Flexible Spending Account or to a 401K/403B pension plan may reduce the wage figure in Block #1. These contributions have NO EFFECT on the Block #3 (social security wages) or Block #5 (medicare wages) figure.