Payroll usually runs quietly in the background. When it works, no one notices. When it does not, everyone notices.
For many employers running biweekly payroll, 2026 is shaping up to be one of those years where payroll gets attention for all the wrong reasons. Due to how the calendar lines up, some organizations will process 27 paychecks instead of the usual 26.
That extra payroll run may sound minor. It is not. It can impact salary budgets, benefit deductions, overtime eligibility, and employee trust if it is not handled carefully.
Most biweekly payroll schedules are built around the assumption that there will be 26 pay periods each year. That works most of the time.
Biweekly payroll pays employees every 14 days. A calendar year, however, has 365 days, or 366 in a leap year. Because 14 does not divide evenly into either, small gaps accumulate over time. Every decade or so, those extra days turn into an additional paycheck.
That is how a 27-pay-period year is created.
Learn More About How To Choose The Right Pay Frequency For Your Company
In 2026, many biweekly payroll calendars begin with a first payday on January 2. Following the normal 14-day cycle, the expected final paycheck would fall on January 1, 2027.
January 1 is a federal holiday. In most cases, wage payment laws require employees to be paid on the prior business day. That moves the paycheck to December 31, 2026.
The result is 27 paychecks issued during the 2026 calendar year.
This issue mainly impacts employers that:
Use a biweekly payroll schedule
Pay salaried employees based on annual compensation
Budget payroll costs annually
Deduct benefits on a per pay period basis
Employers using weekly or semi-monthly payroll schedules generally do not encounter this problem.
According to data from the U.S. Bureau of Labor Statistics, biweekly pay is one of the most common pay frequencies in the private sector, which makes this a widespread planning issue rather than an edge case.
The financial impact becomes clear quickly.
Consider an employee earning $78,000 annually. On a standard biweekly schedule, that salary is typically divided by 26, resulting in a gross paycheck of $3,000.
If the same calculation is used during a 27 pay period year, the employee will be paid $81,000 instead of $78,000.
That additional cost multiplies fast across a workforce. Even organizations with modest headcounts can see meaningful budget overruns if they do not plan for the extra payroll.
One approach employers consider is dividing annual salaries by 27 instead of 26 for that year. This keeps total annual compensation unchanged.
While mathematically sound, this approach can be challenging from a communication standpoint. Employees tend to focus on what they see in each paycheck. A slightly smaller deposit can raise concerns, even when the annual total remains the same.
Some states also require advance notice before changes to pay calculations are implemented. Employers should review state wage notice requirements before making any adjustments.
Check out our HR Compliance Tool, which helps you manage state guidelines.
Payroll adjustments rarely stop at wages.
Health insurance premiums, retirement contributions, and other deductions are often set up on a per-pay-period basis. A 27-pay-period year raises important questions:
Should benefit deductions occur 26 times or 27 times?
Will employees overpay for benefits if deductions are not adjusted?
Could retirement contributions exceed annual IRS limits?
This is where coordination between payroll, benefits, and HR becomes critical.
Adjusting salary amounts can have unintended consequences.
Lowering per-paycheck salary figures may cause some employees to fall below federal or state salary thresholds for exempt status. Under the Fair Labor Standards Act, exempt employees must meet minimum salary requirements. Failing to account for these rules can create overtime liability and classification issues.
There is no universal fix. Common strategies include:
Adjusting salary calculations for the year
Planning for the additional payroll cost
Reviewing benefit deduction schedules
Communicating early and clearly with employees and payroll provider
The best solution depends on workforce structure, state laws, and financial priorities. What matters most is addressing the issue well before payroll is processed.
A 27-pay-period year is not a payroll mistake. It is a predictable calendar event that rewards early planning and punishes last-minute decisions.
Employers who address it early protect their budgets, their employees, and their peace of mind. Those who wait will feel the impact when it is hardest to fix.
If you are unsure how 2026 will affect your payroll, now is the time to talk with a payroll partner who can help you plan with clarity and confidence.
©2026 - Content on this blog is intended to provide helpful, general information. Because laws and regulations evolve, please consult an HR professional or legal expert for guidance specific to your situation.