Heads Up on Payroll: Preparing for a 27-Pay-Period Year in 2026

Most employers who run payroll every other week are used to 26 pay periods each year. However, depending on your payroll processing dates, 2026 may include a 27th pay period. If this isn’t planned ahead of time, it can create issues with salaried pay, benefit deductions, cash flow, and payroll compliance.

If you haven’t addressed this yet, now is the time to align with your payroll administrator and legal advisor. A little proactive planning can prevent surprises later in the year.

Below are the most common mistakes to avoid, and the five steps employers should take now to stay ahead of them.

5 Common Payroll Mistakes to Avoid in a 27-Pay-Period Year

1. Ignoring salaried employee adjustments

Salaried employees paid biweekly may be overpaid if annual salaries aren’t properly recalculated for 27 pay periods.

2. Failing to review benefit and deduction caps

Health insurance, retirement contributions, and other deductions may need adjustment to avoid over- or under-withholding.

3. Assuming payroll software will automatically fix it

Many systems process what they’re told—without flagging compliance or salary discrepancies unless configured correctly.

4. Not planning for the cash-flow impact

An extra payroll run can strain cash flow if it’s not included in annual budgeting and forecasting.

5. Waiting until year-end to address the issue

Delaying action increases the risk of payroll corrections, employee confusion, and compliance headaches.

5 Smart Steps Employers Should Take Now

1. Confirm whether you’ll have 27 pay periods in 2026

Review your payroll calendar early to determine if this applies to your business.

2. Review salaried employee pay structures

Work with your payroll provider to confirm salaries are allocated correctly across all pay periods.

3. Audit benefit deductions and contribution limits

Ensure deductions are spread appropriately and comply with annual caps and plan documents.

4. Update cash-flow forecasts and budgets

Factor in the additional payroll cycle so it doesn’t create unexpected financial pressure.

5. Communicate proactively with employees

Clear communication helps manage expectations and reduces confusion around pay and deductions.

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Compliance Disclaimer

This information is provided for general educational purposes only and should not be considered legal, tax, or payroll compliance advice. Payroll rules and requirements may vary based on your location, industry, and employee classifications. Employers should consult with their payroll provider, legal counsel, or tax advisor to ensure compliance with applicable laws and regulations.