diff --git a/cosmic-applet-audio/src/mouse_area.rs b/cosmic-applet-audio/src/mouse_area.rs
index 38306e45..94efb4f7 100644
--- a/cosmic-applet-audio/src/mouse_area.rs
+++ b/cosmic-applet-audio/src/mouse_area.rs
@@ -307,6 +307,19 @@ fn update<Message: Clone, Theme, Renderer>(
     shell: &mut Shell<'_, Message>,
     state: &mut State,
 ) {
+    // Handle wheel events before the bounds check. The panel's nested
+    // compositor routes axis events to this surface only when the pointer
+    // is over the applet, but the cursor coordinates it sends may be in
+    // panel-local space rather than surface-local space. This makes
+    // cursor.is_over() unreliable for scroll events.
+    if let Event::Mouse(mouse::Event::WheelScrolled { delta }) = event {
+        if let Some(message) = widget.on_mouse_wheel.as_ref() {
+            shell.publish((message)(*delta));
+            shell.capture_event();
+            return;
+        }
+    }
+
     if !cursor.is_over(layout.bounds()) {
         if !state.is_out_of_bounds {
             if widget
@@ -416,12 +429,4 @@ fn update<Message: Clone, Theme, Renderer>(
             }
         }
     }
-
-    if let Some(message) = widget.on_mouse_wheel.as_ref() {
-        if let Event::Mouse(mouse::Event::WheelScrolled { delta }) = event {
-            shell.publish((message)(*delta));
-            shell.capture_event();
-            return;
-        }
-    }
 }