Guide · updated 2026-08-01
Why your paycheck changed when nothing else did
The usual explanations for a take-home figure that moved without a raise: the Social Security wage base, a new Form W-4, a bonus withheld at the supplemental rate, and the Additional Medicare threshold.
Social Security stops mid-year for higher earners
Social Security tax applies at 6.2% only until wages for the year reach the annual wage base — $184,500 in 2026. Once you pass it, the tax stops entirely for the rest of the year and take-home pay rises noticeably, then drops again in January when the base resets. Medicare has no ceiling and keeps applying, which is why the increase is smaller than people expect.
The Step 2 checkbox on Form W-4 is the biggest single lever
Checking it tells payroll you have more than one job or a working spouse. It removes the annual reduction built into the withholding formula and switches to a schedule with brackets roughly half as wide, so withholding rises on each job to cover the combined income. Leaving it unchecked across two jobs is the most common cause of an unexpected balance at filing; checking it when only one job exists over-withholds instead.
A bonus is withheld differently, not taxed differently
When a bonus is paid separately from regular wages it is supplemental pay, commonly withheld at a flat 22% federal rate — 37% above $1 million for the year. That often exceeds the recipient's real marginal rate, which is why bonuses feel punitively taxed and why the difference returns at filing. Employers may instead use the aggregate method, which withholds as though the bonus were part of a normal paycheck.
Pre-tax deductions change the base the percentages apply to
Health premiums under a section 125 plan, HSA contributions, and traditional retirement deferrals reduce the wages the percentages are computed on — though not identically: retirement deferrals reduce income-tax wages but not Social Security and Medicare wages. That asymmetry explains most stubs where FICA does not look like a clean 7.65% of gross.
The 0.9% that appears late in the year
Once wages pass $200,000 for the year, employers must withhold an extra 0.9% Additional Medicare Tax. The threshold is flat regardless of filing status, so a married couple filing jointly can see it withheld and then reconciled — in either direction — when they file.
Official sources for this guide
Now do the math →
🔎 Paystub Checker — Is My Paycheck Right?
Annual update alerts — new IRS and state figures the week they drop
One email when the numbers change. Double opt-in, no spam, unsubscribe anytime.