Originally Posted by CA1900

Pepole are using "withheld" and "taxed" interchangeably, and they shouldn't.

Withholding is done so estimated taxes are paid throughout the year. If you don't have enough withheld, you'll owe interest and penalties on the taxes you were supposed to pay. (Independent contractors, for example, have to send check to the IRS throughout the year to account for this.) If you don't withhold enough, you have to write a check when you do your taxes. If you withhold too much, you get a refund.

The software that companies use -- like Workday -- figure out how much to withhold by estimating what your total salary will be for the year, and thus how much you'll owe in taxes. They do this by looking at your gross pay and extrapolating it to be your annual salary. That works fine unless you get an abnormally large check that's all calculated as normal salary, as our RB will. It'll see something like $150K and think you make $1.8M a year, and withhold taxes commensurate with that number. Yes, it'll be too much, but it will be refunded when you do your taxes. (Not with interest, unfortunately.)

So no, you're not going to get taxed at 35-37%. The software just isn't set up to handle it as a bonus for tax withholding purposes, so it'll withhold too much from that check.