Employers that pay their employees on a biweekly pay cycle often determine the amount of an employee’s biweekly salary by dividing their designated annual salary by 26, reasoning that there will be 26 pay cycles in a 52-week year. Makes sense, right? Not so fast! Once every 11 or 12 years, employers that pay biweekly will be faced with an unexpected payroll budget surprise – a 27th payday. For many employers, 2026 will be that year. How should an employer manage this unexpected payroll obligation?
The Story of Acme, Inc. and Jane Doe
To understand this issue fully, let us consider the example of Acme, Inc., which pays its employees on a biweekly basis. Acme’s designated workweek is Sunday through Saturday, and payday is the Friday following the end of each biweekly pay period. Acme pays Jane Doe an annual salary of $52,000. Acme divided Jane’s annual salary by 26 to determine her biweekly salary of $2,000. Jane’s 26th and final wage payment in 2025 will take place on December 19, bringing her total compensation paid in 2025 to the promised $52,000. So far, so good.
Acme’s payroll department is now planning for 2026. It marks the 26 paydays on the calendar, starting with January 2 and ending on December 18. Then, it realizes that because the next payday after December 18 would be January 1, 2027 (a...
[OSEN=Kim Nayeon Reporter] Ms. A, who is under suspicion of illegal medical practices due to the 'injection aunt' controversy involving broadcaster Park Na-rae, expressed her grievance. On the 24t...