Payroll Leap Year: Will it Benefit your Bank Account?
The last Leap Year was on February 29, 2012. The next one will come around on February 29, 2016.
While you have to wait another year to experience this, there is something even more exciting to take advantage of this year: a "payroll leap year."
If you are a salaried worker who is paid every two weeks, 2015 may bring a little something special to your bank account.
This year is known as a payroll leap year because there are 27 pay periods, as opposed to the typical 26. Since this only happens once every 11 years (approximately), you better enjoy the extra money this time around.
How you get the money will depend on your employer. According to this article, companies can take one of two approaches, as explained in the following excerpt:
"Some employers will be paying that 27th paycheck on top of regular salary, resulting in about a 4 percent annual raise, while others will redistribute the set salary among 27 checks."
How does this happen? Many people overlook the payroll leap year because they don't understand the math behind it. In short, 26 pay periods only make up for 364 days per year. For this reason, the 365th and final day of the year accumulates over time, eventually working out to an additional paycheck.
As excited as you may be about this extra money, remember one thing: this is not a bonus. You worked for the time you are getting paid, so you should expect this money to make its way to you at some point.
If you want to impress your company's human resources department, contact the appropriate party regarding how you will be impacted by the payroll leap year.