Every 10–11 years, the calendar creates an unusual payroll scenario for companies that run bi-weekly payroll schedules: instead of the usual 26 pay periods, there are 27 pay periods in the year.
For some businesses, 2026 will be one of those years.
If your organization issued its first paycheck of 2026 on January 2, the calendar alignment means a 27th paycheck will fall on December 31, 2026. While this might sound like a minor scheduling quirk, it can have real implications for budgets, payroll planning, and employee communication.
Here’s what employers should know, and why it’s important to address it sooner rather than later.
Bi-weekly payroll schedules typically produce 26 pay periods per year (52 weeks ÷ 2). However, because the calendar year doesn’t align perfectly with payroll cycles, every decade or so, the dates shift enough to create an extra pay period.
When that happens, employers face a decision about how salaried employees will be paid across those 27 checks instead of 26.
For hourly employees, there’s no adjustment to consider.
Hourly team members are paid for the hours they work, so if the payroll calendar produces an additional pay period, they will simply receive an extra paycheck based on their hours worked.
From a budgeting standpoint, employers should be aware that total wages paid for hourly staff may be slightly higher than originally projected for the year.
For salaried employees, employers typically choose one of two approaches.
Some employers choose to keep the standard bi-weekly salary amount the same and issue the 27th paycheck at that rate.
In this scenario, employees would receive slightly more than their stated annual salary for the year.
While this approach is simple administratively, it can increase payroll expenses beyond what was budgeted, particularly toward the end of the year.
The second option is to spread the employee’s annual salary across 27 pay periods instead of 26.
This results in a slightly smaller bi-weekly paycheck, but employees still earn their exact annual salary.
Employers typically calculate the new amount using the following formula:
While this option maintains payroll budgets, it can raise employee perception concerns, since workers may notice their paycheck decrease.
Employees often build their personal budgets around a predictable paycheck amount.
If an organization decides to adjust salaries to account for 27 pay periods, clear communication is essential. Employers should explain:
Providing advance notice helps employees adjust their budgets and avoids unnecessary confusion. Truthfully, the sooner the better.
Some states require employers to provide advance notice before changing an employee’s compensation structure.
In many cases, this can require at least two weeks of notice, though requirements vary by state.
Because of this, employers should make their decision early in the year to ensure they remain compliant.
Another commonly overlooked issue involves benefit deductions.
Many benefits, such as health insurance contributions, are calculated assuming 26 payroll deductions per year.
If deductions continue across all 27 pay periods, employees could overpay for their benefits.
For companies affected by the 27-pay-period year, employers may need to pause benefit deductions for the final paycheck on December 31, 2026 to avoid overcharging employees.
While the 27-pay-period year doesn’t happen often, employers need to identify it early and decide how they want to handle it. Taking action now can help avoid:
But don’t worry we can help….
For companies managing payroll, HR compliance, and employee communication, situations like this are exactly where having the right partner matters.
If you’re unsure whether your business will be impacted or want help determining the best path forward — our team is happy to talk through the options and help you plan ahead.
Reach out to our HR experts today!
Enter your email address to sign up for our free and informative newsletter.
