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Employers Should Plan For a Potential Extra Pay Period in 2026

As we get closer to ringing in the New Year, employers that pay salaried employees on a biweekly schedule should plan for an additional pay period in 2026. This extra pay period raises several employment-related considerations, including the risk of overpaying salaried employees.

In most years, there are 26 pay periods for salaried employees who are paid biweekly. However, 26 biweekly periods, multiplied by 14 days within the pay period, only add up to 364 calendar days, which is one day short of a typical year. So, one day every year, or two days in a leap year, is not covered by the 26-pay period schedule. Every 11 to 12 years, these uncovered days accumulate to reach 14 days, thus requiring an additional pay period.

With an extra pay period in 2026, employers may either budget for the additional pay period or reduce the biweekly installment that salaried employees are to be paid to account for the extra pay period. If no adjustment is made, employees may be overpaid by one biweekly installment in the 27th pay period, which could be costly. Employers that decide to reduce the biweekly installment amount should be sure the weekly pay of their exempt employees does not fall below the minimum threshold to be considered exempt. At the federal level, this threshold is $684 per week, but state wage laws may have higher thresholds.

Employers should be aware that state and local law may require advance notice if an employee’s pay per pay period will be reduced, even if the employee still will be receiving their full salary within the year. Maryland, for example, requires at least a pay period’s notice before reducing pay. In D.C., employers must provide notice of any change in an employee’s rate of pay within 30 days of making the change. Virginia does not have a change in compensation notice requirement.

Employers also must consider how this additional pay period will affect payroll deductions, tax withholdings, and employee benefits. We are here to assist in navigating this unusual situation. Please do not hesitate to reach out.