If you pay your employees on a weekly or bi-weekly basis, the 2026 or 2027 calendars may include an “extra” payday. Many employers pay employees every week (usually 52 paydays per year), or every other week (usually 26 paydays per year). These regular paydays account for 364 days each year. But, since there are actually 365-366 days per year, the extra day or two that is unaccounted for adds up to an extra payday every 11 years. This “extra” payday can create a dilemma for employers who are not prepared, particularly when paying salaried employees.
Biweekly example for 2026: In a normal year, for example, a salaried employee who makes $52,000 per year and is paid biweekly receives $2,000 every two weeks. For employers who pay on Fridays every two weeks and issue the first paycheck of the year on Friday, January 2, 2026, the 26th payday will fall on December 18, 2026. The next payday is then scheduled to fall on Friday, January 1, 2027. Since New Year’s Day is a national holiday, most employers will pay the day before (Thursday, December 31, 2026), which then becomes the 27th payday in 2026. In our example, the salaried employee will receive $54,000 in 2026, instead of $52,000. For employers with a large number of salaried employees, this additional pay could be fairly significant, especially if it has not been accounted for in the company’s budget.
Weekly example for 2027: Even if you decide not to accelerate the January 1, 2027, paycheck to December 31, 2026, employers who pay salaried employees once a week on Fridays may still have an issue in 2027 because there are 53 Fridays in 2027.
Option #1—Spread annual salary over more paydays: Employers have options for handling this situation besides paying salaried employees for an extra payday. One option for employers is to spread the employee’s annual salary over 27 biweekly paydays instead of 26 in 2026 (or 53 weekly paydays instead of 52 in 2027). In our example above, the employee who is paid every two weeks would receive $1,926 each payday instead of $2,000.
Cautions for Option #1: This option would probably require adjustments to some payroll deductions, such as medical benefits and 401(k), and is not likely to be well received by employees. You may also incur costs to change your payroll system to reflect the adjustments for one year and then back to the regular system in the following year. Also, if the employee is classified as salaried exempt (i.e., not eligible for overtime), you will need to ensure that any reductions in salary don’t bring the wage below the allowable salary threshold under federal or state law. Federal law requires at least $684 per week for salaried exempt employees, but California and Washington impose higher levels. See our Legal Guides, State Laws on the White Collar Exemptions from Overtime and When Is an Employee Exempt Under Federal Law?.
Option #2—Delay first paycheck of 2027: Another option is to shift the Friday, January 1, 2027, payday to Monday, January 4, 2027 (instead of Thursday, December 31, 2026). This option eliminates the “extra” payday in 2026, but will result in an “extra” payday in 2027 instead, merely delaying the problem. Since there is never a calendar year with only 25 bi-weekly (or 51 weekly) paydays, there’s no way to catch up or even out the paydays over time—eventually the “extra” payday will need to be addressed. This may be a viable option, however, for companies that need time to address the extra payroll in their budget.
Option #3—Switch to semi-monthly pay periods: Some employers may decide to eliminate this extra payday problem once and for all by switching to semi-monthly pay periods.
Tips: Whichever system you use, be sure to clearly communicate your plans to employees with as much advance notice as possible, and give them a chance to ask questions so they can fully understand the impact of your upcoming payroll changes. Questions? Members, contact your Vigilant Law Group employment attorney.
