2026 Is a 27 Pay Period Year: What Employers Need to Know Now (January 2026 TogetHR Times)
For most employers running biweekly payroll, the assumption is that there are 26 paychecks each year. But every so often, the calendar shifts just enough to create an extra payday. 2026 is one of those years, with 27 biweekly pay periods. This is not an error, but it does require planning.
Organizations that are not prepared often run into budget surprises, payroll errors, or confused employees. Understanding the impact ahead of time allows employers to stay compliant, control costs, and communicate clearly.
Why this happens is tied to the structure of biweekly payroll. A biweekly schedule runs on a 14-day cycle, resulting in 26 pay periods across 52 weeks. Because a calendar year actually contains slightly more than 52 weeks, pay dates gradually shift forward. Eventually, a year accommodates a 27th payroll date. This typically occurs about every 11 years, depending on the weekday on which a company’s payroll cycle begins.
One of the most immediate areas employers must evaluate in 2026 is salary pay calculations. For salaried employees, annual pay does not change, but per paycheck amounts often must. If an employee’s salary is spread across 27 pay periods instead of 26, each paycheck will be slightly smaller. If paycheck amounts are left unchanged, employees may unintentionally be overpaid for the year. Employers should decide early how salaried pay will be handled and confirm payroll systems are configured correctly before the first payroll of 2026 is processed.
Another important consideration is budgeting and cash flow. An extra payroll increases expenses beyond wages alone. Employers should anticipate additional employer payroll taxes, higher workers’ compensation costs tied to payroll totals, increased employer retirement match costs if matching occurs per pay period, and greater cash flow demands in months with three payroll dates. Including the 27th payroll in annual budgeting helps avoid unexpected financial strain.
Benefits and payroll deductions also require close attention. Most benefit premiums and deductions are designed around 26 pay periods. Without adjustment, employees may overpay for benefits or exceed annual contribution limits. Employers should review medical, dental, and vision premiums, health and dependent care FSAs, HSA contributions, voluntary benefits, and wage garnishments to ensure per paycheck deductions are aligned with the annual total.
Retirement plans are another area where a 27-pay period year can create complications. Employees contributing a percentage of pay may reach IRS limits earlier than expected, while flat dollar contributions may exceed allowable totals if not adjusted. Employer match costs may also increase if matching occurs each pay period. Coordination with retirement plan administrators is strongly recommended.
Employers should also review PTO accruals and leave policies. If paid time off accrues per pay period, an additional payroll may result in extra accruals for the year. Reviewing accrual formulas and policy language helps ensure consistency and avoids unintended liability.
Finally, employee communication is critical. Employees will notice smaller paychecks, deduction changes, or an unexpected extra pay date. Proactive communication explaining why 2026 has 27 pay periods and what employees can expect throughout the year reduces confusion and builds trust.
Preparing early makes all the difference. Employers should review their 2026 payroll calendar, coordinate with benefits and retirement providers, adjust payroll system settings, and plan employee communications well in advance. A 27-pay period year is manageable, but only with preparation. Addressing it now ensures a smoother payroll experience throughout 2026.
By Sunny Jonckheere
