Does a leap year mean that staff will receive an extra days’ pay?
2024 is a leap year with 366 days rather than the usual 365.. but what does that mean for payroll?
2024 is a leap year with 366 days rather than the usual 365, and so employees will have to work an additional day, but what does that mean for payroll?
Hourly paid employees
It goes without saying, that if you pay your staff according to the hours they work, regardless of the number of working days in the year, if they work on 29 February 2024, they are paid for the hours they work on that day.
Salaried employees
For those of us who are salaried, we won’t be entitled to extra salary in February to take account of the additional day worked. This is because we are paid a set annual salary regardless of whether a particular year includes an extra working day.
It is worth checking whether your employee’s employment contract specifies anything around leap year pay. For example, it may state that they’re entitled to receive additional pay in a leap year, such as an extra 1/260th of their salary; or their annual salary relates to a set number of hours per year and any hours in excess of that number are additionally paid. In those cases, you’ll need to comply with the contract’s terms.
Working days
Not all years have 260 working days (Mondays to Fridays including bank holidays). Some already have 261 working days – because a year is 365 days, but seven days multiplied by 52 weeks is only 364 days. It will depend on what day 1 January falls. In a leap year, working days can rise to 262, as is happening in 2024. By contrast, both 2022 and 2023 only had 260 working days because 1 January in those years both fell at the weekend. So, there are actually two extra working days this year compared with the last two years.
Spectra HR’s Opinion
If you want to explicitly address the issue of leap years in the employment contracts of your salaried staff, you may want to include a brief clause clarifying that there’s no extra salary in a leap year.
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