Leap Year Finances

When leap year comes around every 4 years, it does more than just add an extra day to the calendar – it also affects your finances. From payroll management to a “free” pass for monthly billing, we’re diving into fun facts and unexpected ways that leap year impacts us. 

  1. Additional pay period. If your business pays employees on a weekly or biweekly basis, that extra day can create an additional (and unintentional) pay period. So if your payday lands on leap day, consider re-calculating your pay periods based on 53 weeks rather than 52. Or just leave it and let your employees enjoy the security of one extra paycheck.
  2. A “free” day of usage. If you rent an apartment, pay for a public transportation pass, or any other monthly service, you can enjoy the perks of a “free” usage day. Leap days aren’t usually budgeted into monthly billing calculations, meaning you’ll get an extra day of use at no extra cost.
  3. An extra day off. Some businesses give employees an extra day off during a leap year. If you’re lucky enough to have a free bonus day, you can use it to work on your budget and financial planning or win time back by checking a few lingering items off your to-do list.
  4. Excess costs. Another day, another round of necessities to purchase. From gas for your car to grocery bills, you’ll need to account for one more day’s worth of expenses, so don’t forget to factor in leap-year costs.
  5. More expensive utility bills. Leap years add an extra 24 hours to your utility bill. And since leap day falls at the end of chilly February, your heating bill might be more expensive than usual.
  6. Extra interest. During leap years, you pay an extra day of interest on loans, mortgages, and more.

When leap years roll around, it’s important to factor one extra day into your budgeting or business considerations. But with a little forethought and careful planning, you can enjoy the perks of an extra day without any financial setbacks. Contact the Origin team for more information if you have any questions about budgeting or personal finances.