Solc Compiler Versions – Resolving Source File Compiler Version Issues in Solc

First you have to decide which solidity version you want to choose for your project. Its not necessary that you choose the latest version(my opinion). You have to consider the solidity version of external packages that you wish to use in your project.

For example, if you are using Openzeppelin, you can find different versions here: @openzeppelin/contracts.

Here is the updated code compatible with Solidity:0.8.3 with Openzeppelin:

// SPDX-License-Identifier: MIT
pragma solidity >=0.4.23 <0.9.0;

import "https://github.com/OpenZeppelin/openzeppelin-contracts/blob/master/contracts/utils/math/SafeMath.sol";
import "https://github.com/OpenZeppelin/openzeppelin-contracts/blob/master/contracts/token/ERC20/ERC20.sol";
import "https://github.com/OpenZeppelin/openzeppelin-contracts/blob/master/contracts/access/Ownable.sol";

contract StakingToken is ERC20, Ownable{
    using SafeMath for uint256;
    
    constructor()ERC20("MyCoin", "XMC"){}
    
    function addNumber(uint256 number) public pure returns(uint256) {
        return number.add(5);
    }
}

I went through this error recently.

This is happening because the compiler version configured on VS Code workspace is different from the version you want.

To fix that just right click on the error and select the option

Solidity: Change workspace compiler version (Remote)

It will open a drop-down with the available versions and you just pick the 0.7.6.

You can check this info on Solidity VSCode extension repository https://github.com/juanfranblanco/vscode-solidity/