Employers use one of a few standard payroll cycles. While some follow a monthly or weekly period, most have a semi-monthly (twice per month) or biweekly (every other week) schedule. In fact, biweekly is one of the most common payroll cycles, with nearly half (43%) of employers following it.
For employers that run biweekly payroll, 2026 introduces a unique scheduling challenge. Because Friday, Jan. 1, 2027, is a federal holiday, many employers that use a Friday pay date will need to shift that payday earlier in the week—placing it in 2026. As a result, under most payroll structures, Thursday, Dec. 31, is likely to become the final payday of 2026.
The cadence of 27 payroll dates occurs slightly less than once per decade due to mismatches between days (365 days per year and 14-day pay cycles) and the extra day in leap years.
Impact on Payroll
A year with a potential extra pay period can create several payroll challenges, particularly for employers with salaried employees who must be paid a predetermined amount each pay period. Due to this distinction, most employers are either planning a pro-rated adjustment (dividing the annual salary by 27 rather than 26) or continuing pay cycles as usual, adding an extra pay date on Dec. 31 and paying employees an extra 3.85% in 2026.
Generally, even employers planning for 27 payroll cycles complete benefits deductions for the first 26 paychecks.
This additional cycle can introduce compliance issues and operational complexities impacting:
- FLSA compliance
- Salaried employee requirements
- Notice requirements
- Tax withholdings
- Payroll budgets and accuracy
- Benefits contributions
Employer Takeaway
In 2026, an extra biweekly payroll period presents operational and compliance challenges for employers. Employers are responsible for complying with all applicable laws and regulations and should consult local legal counsel for guidance.
Contact us to see how you could minimize risk:
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