For employers who run payroll bi-weekly, a salaried employee’s annual salary is typically divided across 26 pay periods, corresponding to 52 weeks of work. However, roughly every 11 or 12 years, a 27th pay period occurs. This situation will arise again in 2026.
ASE’s 2025 Pay Administration Survey reports that overall, 66% of employers payroll schedule is on a bi-weekly basis. 15% pay weekly, 11% pay semi-monthly, and 3% pay on a monthly basis.
For those that make payroll on a bi-weekly basis, you (or your payroll service) will have to make a change to accommodate next year’s extra week.
Rob Pritcher at Littler Mendelson law firm provides some guidance in his article “Employers That Pay Bi-weekly May Have 27 Paydays in 2026.” Using the example of a worker making $52,000 per year and paid bi-weekly he outlines how in 2026 the calendar year will start on January 2nd and end on December 18th for 26 paydays. On a bi-weekly pay schedule it will be making a 27th paycheck to this worker on December 31st because January 1 is a holiday. Should the worker’s employer have its pay divided by 27 pay periods instead of 26? Or should the employer skip the December 31st payday altogether because the employee would have made his or hers $52,000 salary on December 18th? Or just make the extra payday and pay the worker an additional $2,000 per the normal pay schedule?
Pritcher points out that in his example the employer had not planned on there being one more payday in the year. By dividing the worker’s annual salary by 26 pay periods the company has in fact been overpaying the worker all year. This is because 26 biweekly pay periods only cover 364 calendar days and we know a year has 365 days and even one more in a leap year.
For a salary that is meant to be exactly $52,000 the worker should have been paid $1,994.52 not using 26 or 27 weeks to divide the year up but using 14/365 in a non-leap year. Pritcher points out that in the short run it’s a small difference ($5.48 per pay period. But across 26 pay periods it is $142.48 ($284.18 in a leap year) Pritcher further makes his point by showing that over 11 years (with 3 leap years included) that comes to just under $2,000.
Pritcher recommends employers using a bi-weekly pay schedule communicate that they pay to a specific bi-weekly amount. If you have not made this clear or have been doing the bi-weekly pay calculations incorrectly it is recommended you tell employees that “going forward” the bi-weekly salary will be calculated by multiplying their salary by 14/365 method to account for the way the Julian calendar works (365 days and also leap years).
Pritcher reminds employers that ultimately a salary and how it is paid is a matter of agreement between the employer and employee. But remember state law may require you to provide notice about reductions in pay. And don’t forget about employee relations issues when workers find out their check is not what it once was. Pritcher suggests an employer may also make this change when a merit increase is implemented to make the transition not feel as bad. One other approach suggested is to pay the annual salary for the year only based upon the work time performed in that year. This would mean in these odd years the employer would provide an “off cycle” check paid on December 31st to cover any balance owed. The check that would normally come up on January 2nd would be skipped and the next check on January 16th would only cover 1/1 through 1/10/ 2026. Pritcher points out that this approach has its complications too.
Also do not forget that other pay issues arise when 27 paydays arise. Deductions from pay for health benefits, flexible spending accounts, and other benefits that require employee contributions also have to be reconciled.
Pritcher also looks at the accounting considerations that must be implemented when accounting for a year with 27 paydays. He points out that due to the expense associated with the additional payrolls in that year, employers on the accrual basis of accounting (per the Generally Accepted Accounting Principles or GAAP) a pro-rata accrual of payroll expenses must be made at the end of each year based upon when the work that was performed. Check with your accounting professionals on that one.
Sources: Littler Mendelson PC. Employers That Pay Bi-weekly May Have 27 Paydays in 2026. (12/2/2026); ASE 2025 Pay Administration Survey