Are There 27 Pay Periods in 2024? What You Need to Know

For those on bi-weekly payroll, the number of pay periods in a year can vary. This question becomes particularly relevant in certain years, such as 2024, when the calendar alignment can lead to an unexpected extra paycheck. Understanding this occurrence is important for both employees managing their personal finances and employers handling payroll operations.

The 27-Pay-Period Occurrence Explained

For many businesses operating on a bi-weekly payroll cycle, 2024 is indeed a year that includes 27 pay periods instead of the usual 26. This occurs due to the mathematical relationship between the number of days in a year and the bi-weekly pay cycle. A standard year has 365 days, while a leap year, like 2024, has 366 days. Dividing these by 14 days, which constitutes a bi-weekly period, results in approximately 26.07 or 26.14 pay periods, respectively.

These fractional remainders accumulate over time, eventually adding up to an extra full pay period. This phenomenon leads to a 27th bi-weekly pay period roughly once every 11 years. While bi-weekly payrolls are affected, weekly payrolls can also experience an extra pay period, resulting in 53 paychecks in a year. In contrast, monthly payrolls always have 12 pay periods, and semi-monthly payrolls consistently have 24, as their schedules are tied to specific dates within each month rather than a repeating weekly cycle.

Employee Financial Implications

An additional paycheck can significantly impact an employee’s personal budgeting and financial planning. Employees accustomed to managing their expenses over 26 bi-weekly payments will receive an extra influx of cash, which can be used for savings, debt reduction, or other financial goals. However, this extra pay period also affects various deductions, such as health insurance premiums or 401(k) contributions. These deductions might be taken out 27 times, potentially leading to a slight over-collection or reaching annual contribution limits earlier than anticipated.

Employees contributing to retirement plans like a 401(k) need to be particularly mindful of annual contribution limits set by the Internal Revenue Service (IRS). If an employee aims to maximize their contributions, they might need to adjust their per-pay-period contribution amount to ensure they do not exceed the annual limit or miss out on employer matching contributions by front-loading their savings too early. The increased gross income from an extra paycheck can also slightly alter annual taxable income, potentially influencing tax withholding. Employees might consider reviewing their W-4 form to prevent under-withholding.

Employer Payroll Adjustments

When a 27-pay-period year occurs, employers must make specific adjustments to their payroll and budgeting processes. The primary consideration involves forecasting and allocating funds for the additional payroll run, as this directly impacts the annual payroll budget. Many employers budget for 26 bi-weekly pay periods, so the 27th can represent a significant, unplanned expenditure if not accounted for in advance.

Managing employee benefits also requires careful attention, especially for deductions that are fixed monthly amounts, such as health insurance premiums. Employers may need to decide whether to spread these deductions over 27 periods, suppress them on the extra paycheck, or adjust the per-pay-period amount to ensure the correct annual total is collected. Communicating these changes to employees is important to manage expectations and avoid confusion regarding their take-home pay or benefit deductions. For salaried employees, employers may choose to divide the annual salary by 27 instead of 26 for the year, resulting in slightly smaller individual paychecks, or simply pay the extra check, which means the employee receives more than their standard annual salary.

Determining 27-Pay-Period Years

Identifying whether a particular year will have 27 bi-weekly pay periods depends primarily on the calendar alignment and the specific day of the week payroll is processed. If January 1st or January 2nd (in a leap year) falls on the same day as an employer’s regular bi-weekly payday, it is highly likely that the year will contain 27 pay periods. For instance, if an organization pays employees every other Friday, and January 1st of a given year is a Friday, that year will have 27 paydays.