Every fourth year, the complicated mathematics of the solar system give us a special gift: a whole extra day! Next year, 2020, we will again see an extra day tacked onto the end of February, but that doesn't just mean one more day to get all our errands or TV show binge watching done.
Next year, leap year will hold a special importance for many companies that pay their employees biweekly, as they will see a whole extra pay period. This means that instead of the standard 26 pay periods, many of our customers will see 27 pay periods instead.
To see if your company falls into this scenario, access the Actions/Analyze Client Activity menu in myPay Solutions Direct and click on Payroll Schedule. If your biweekly or weekly payroll schedule is paid out on January 1st or 2nd, you will likely see an extra pay period in 2020.
This means salary employees could possibly get another paycheck; it also means that annualized deductions like healthcare premiums may need to be adjusted to avoid over-payment.
What does this mean for those of our clients who fall into this scenario? Well, there are two main options that you as the employer will need to decide between:
1. You could leave everything as it is and treat the extra payroll as an additional payment for your employees. You'll still want to review deductions and the like to ensure they are not being overpaid.
2. You could skip a payroll early in the year, making sure to communicate your plan of action effectively to all employees. Depending on the laws in your state, the second option may not be available to you.
Whichever you choose, it is a good idea to consult with your accountant prior to making the decision as it may have tax and legal implications for your company.
Need help implementing either of the above options? See your payroll specialist for more information!