You might have an extra pay period in 2026- What that means and what to do.

We want to flag an important payroll issue for the calendar year 2026 that potentially affects employers who run bi-weekly or weekly payroll with Friday pay dates.

What's the problem? 

In 2027, January 1, 2027 falls on a Friday and is a bank holiday. As a result, many payroll providers will shift that pay date back one day to Thursday, December 31, 2026.

This means that an extra pay date is being added to the 2026 payroll calendar (53 will occur if you pay weekly, and 27 if you pay bi-weekly). This will not affect those employees paid based on actual time worked data (non-exempt, hourly), but will affect employees paid on a salaried basis, as this extra pay date will mean an extra salary payment this year (if you don't recalculate salary payments), which means you will be collectively overpaying all salaried employees for 2026 by an entire paycheck. If you have many of these employees, or high paid salaries, this could be a big deal financially. This extra pay period also means an extra set of deductions, 401k contributions, etc. that may not be warranted or cause other issues if not addressed. 

Here's a visual to help explain (specific to a bi-weekly pay cycle but this also affects weekly the same way)

Paycheck coverage:

Check 1  = Weeks 1–2  

Check 2  = Weeks 3–4

…

Check 26 = Weeks 51–52 

Check 27 = Weeks 53–54 (do not exist)

 You’ve paid for 54 weeks, but the year only has 52.

If you already identified this issue prior to the start of 2026 and/or you have a sophisticated enough payroll setup that caught this and readjusted all salaries and deductions automatically (unlikely), you do not need to take any action. But you may still want to review this summary to make sure you've considered everything. 

If this is a problem you didn't know about until now PLEASE read below thoroughly and carefully. 

What you can do now (options)

First: Confirming whether your payroll provider will move the January 1, 2027 pay date to December 31, 2026. If this is happening and affects you. 

If this has not yet been addressed, here are your practical options:

Option 1: Absorb the cost (least work, highest cost)

• Continue paying salaries as-is

• Accept the extra paycheck(s) as employer expense

⚠️ This is not recommended if you have salaried, non-exempt employees or a large salaried population.

Option 2: Adjust remaining paychecks (most common)

• Leave prior pay unchanged

• Recalculate salaries across the actual number of pay periods

• Slightly reduce remaining paychecks to limit overpayment

This minimizes disruption, the worst of employee reaction, and avoids clawbacks, while substantially correcting the math.

Option 3: Fully re-spread remaining salary (most precise)

• Calculate salary already paid

• Re-spread remaining annual salary across remaining pay periods

• Results in no annual overpayment

This option is the cleanest mathematically, but the hardest for employees to understand and accept.

Note: If you have salaried, non-exempt employees, there may need to be additional considerations made, and I encourage you to reach out about those scenarios. 

What you definitely should not/cannot do: 

• Do not claw back past pay. Based on adjusted salary amounts for the increased pay periods. The only way to "recover" this is reducing future payments documented in option 3 above.

• Do not decide you can just skip the extra pay periods because you've made the annual salary number whole by then. This is not compliant with salary/exempt pay status and setup and will certainly result in claims and penalties.

• Do not do any of this without communicating the adjusted salary amounts to employees first, and have them sign off on the adjusted amounts (always required when adjusting pay for any reason, up or down).

• You shouldn't underestimate what eating this extra pay period could cost you- make sure you look at this number before deciding this isn't worth the headache. Especially if you have many salaried employees or high paid salaries.

• You should not forget and/or fail to explore the implications of this on benefit deductions, 401k contributions (max limits), expense reimbursements that may be auto, etc. These may also need to be recalculated/adjusted with any other changes you make.

Communication Points/Tips: 

• If you don't eat the extra payment it but adjust pay, points to emphasize: 

• “Your annual salary didn’t/isn't changing”

• “This is a timing and distribution issue based on a calendar year anomaly that occurs every several years and often requires adjustment  ”

• “We’re correcting how your pay spread over more pay periods this year, not what you’re paid total for the year"

Points for the future on this topic (Use this as the moment to also
Lock your payroll policy- make sure you're defining salary in both annual amounts and pay period totals. 

• Documents how extra-period years are handled in the future and whose job it is to ID and take care of this issue.

• Don't forget to change back to the standard 52/26 week numbers in 2027!!! (salary amounts and deductions, etc.)

• Future-you will be grateful.

This situation is confusing. I encourage you to reach out with any questions and with help walking through options and actions to make this right.