In 2026, many employers will encounter an unusual payroll challenge: 27 pay periods instead of the usual 26 for weekly payrolls (and in some cases 53 instead of 52). While this is a predictable calendar effect, it can still create confusion, budgeting issues, and employee relations problems if not handled properly. The impact will be felt by salaried employees because their annual salary is typically divided by 26 (or 52) not 27 (or 53). If the 27th payroll is not planned for, employers may face overpayment of salary if an extra full payment is made, budget overruns, incorrect pension or benefit contributions, employee dissatisfaction if pay is reduced unexpectedly or handled inconsistently, and compliance risks, depending on local payroll and tax regulations.

Employers should review their payroll calendar for 2026 as early as possible. Payroll software providers or payroll bureaus can usually confirm whether an extra pay period applies. Early identification allows time for planning and communication so the employer can decide whether they want to spread salary across all pay periods (resulting in slightly lower payments each period),absorbing the extra payroll cost for one year, or even making the final payroll a reduced or zero-salary run. There is no single “correct” method, but consistency and transparency are essential.

Also important is that employers review Employment Contracts (if any) to see they address an annual salary or a weekly amount. If contracts refer to annual salary, employers generally have more flexibility to adjust per-period payments — provided changes are communicated clearly and in advance. They should also check for any impact on 401K contribution, benefits, and deductions to ensure systems are configured correctly and that annual limits are not breached.

Employers who plan early, communicate clearly, and apply a consistent approach can manage the situation smoothly and avoid unnecessary cost or employee dissatisfaction. Clear communication is key and helps avoid misunderstandings and maintains trust.

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