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27th Pay Period Questions and Answers

Q. Why is there an extra payday?

A. At the University of Minnesota, a typical fiscal year (July 1-June 30) has 26 paydays. However, with a bi-weekly payroll schedule, every 11 years we experience an anomaly where there are 27 paydays in a fiscal year (FY).

This 27th payday occurs because there are only 364 days in a 26 pay period payroll cycle while there are actually 365 days (or 366 days in a leap year) in a calendar year. So, each fiscal year there are actually 26.09 paydays (365.24/14). Because the payroll cycle at the University of Minnesota is based on a flat 26 pay periods, the 26th pay date shifts earlier in June each year until reaching the point where an additional bi-weekly pay date occurs in a given fiscal year.

In other words, the University’s typical bi-weekly payroll schedule results in 26 Wednesday paydays in a fiscal year. However, every 11 years, both July 1 and the following June 30 are paydays, resulting in 27 paychecks in that particular fiscal year.

Q. When will the extra payday occur?
A. This 27th pay period phenomenon would have occurred on June 30, 2010 (in FY10). However, anticipating that the budget shortfall for FY10 would be more significant than in FY11, a decision was made to move the financial impact of the extra pay day to FY11 by shifting the actual pay date from Wednesday, June 30, 2010 to Thursday, July 1, 2010.  This shift means that all University employees will receive their June 30, 2010 paycheck on July 1, 2010, moving it only one day but thereby accounting for it in the next fiscal year.
Q. What do I need to do?
A. All employees should review banking transfers or automatic payments for items such as mortgages, car payments, etc, particularly those which are scheduled to occur on June 30, 2010 because the actual pay won’t be received until July 1, 2010.
Q. Does the shift to a July 1, 2010 pay date impact appointment terms?

A. Yes. The two-week work period reflected in this check will be considered the beginning of the full year (A term) appointment term for FY11. So, faculty and P&A appointment dates are as follows:

  • For FY10: June 8, 2009 through June 6, 2010
  • For FY11: June 7, 2010 through June 19, 2011
Q. Will non-academic Bargaining Unit employees see a change in bi-weekly pay as a result of the extra payday?
A. No. Non-academic Bargaining Unit employees are hourly, so bi-weekly pay is based on actual hours worked multiplied by their hourly rate. Consequently, the extra paycheck will reflect the hours worked in that pay period.
Q. Will Civil Service employees see a change in bi-weekly pay as a result of the extra payday?
A. No. Civil Service employees will continue to have their bi-weekly pay calculated from their hourly rate.  Consequently, the extra paycheck will reflect the hours worked in that pay period or your percentage appointment.
Q. Will Faculty and P&A employees on a full year (A term) appointment see a change in bi-weekly pay as a result of the extra payday?
A. Yes. Academic employees receive a Notice of Appointment with an appointment term salary. For full year (A term) term Faculty and P&A employees, bi-weekly pay is calculated by dividing the appointment term salary by the number of pay periods. In FY11, the denominator will be 27 pay periods rather than the typical 26, so bi-weekly paychecks will be smaller; however, over the appointment term, the total salary remains the same.
Q:  Will academic employees on 9, 9.5, or 10 month appointments see a change in bi-weekly pay as a result of the extra payday?
A:  No. Appointment terms having less than 26 pay periods are not affected. However, for academic employees who receive their pay in the 9-over-12 cycle, there will be an extra paycheck in FY11, so bi-weekly paychecks will be smaller; however, over the appointment term the total salary remains the same.
Q. How will this extra pay period affect tax withholdings?
A. Bi-weekly taxes withheld for faculty and P&A employees will be less because the taxable gross will be less per paycheck (given the division by 27 pay periods versus the typical 26).  Total taxes will be withheld appropriately for each calendar year.
Q. Will I see a change in my benefit deductions?
A.  No. There is no change in deductions for FY11. Benefit rates are calculated over 26 pay periods in a January to December calendar year. Since both the 2010 and 2011 calendar years contain 26 pay periods, there is no change in how health, dental, life, disability, long term care, retirement benefits, life insurance, and flexible spending accounts are elected and deducted each payday.
Q. How will the extra pay period affect vacation leave accruals?
A. For all employees who accrue vacation, the accrual will continue as usual for each pay period, and balance maximums will remain the same.
Q. How will the extra pay period affect sick leave accruals?
A. For all employees who accrue sick leave, the accrual will continue as usual.
Q.  How will this impact my pay in FY12?
A. In FY12, and for several years after that, there will again be just 26 pay periods. The appointment term salary total will be divided by the typical 26 in order to determine the bi-weekly pay amount.

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