Advertisement
UK markets close in 8 hours 13 minutes
  • FTSE 100

    7,978.93
    -16.65 (-0.21%)
     
  • FTSE 250

    19,716.03
    -5.21 (-0.03%)
     
  • AIM

    756.41
    +0.50 (+0.07%)
     
  • GBP/EUR

    1.1701
    +0.0007 (+0.06%)
     
  • GBP/USD

    1.2466
    +0.0015 (+0.12%)
     
  • Bitcoin GBP

    53,215.05
    +1,261.23 (+2.43%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,123.41
    -75.65 (-1.46%)
     
  • DOW

    37,983.24
    -475.86 (-1.24%)
     
  • CRUDE OIL

    84.86
    -0.80 (-0.93%)
     
  • GOLD FUTURES

    2,372.20
    -1.90 (-0.08%)
     
  • NIKKEI 225

    39,232.80
    -290.75 (-0.74%)
     
  • HANG SENG

    16,600.13
    -121.56 (-0.73%)
     
  • DAX

    18,025.38
    +95.06 (+0.53%)
     
  • CAC 40

    8,058.89
    +48.06 (+0.60%)
     

The lucky few who will get a ‘leap year bonus’ in 2024

leap year bonus
leap year bonus

They say that when you find a job you love, you never work a day in your life. Well, hopefully you’ve found that job because later this month it’s very likely you’ll be working an extra day for absolutely no extra pay.

This year, 2024, is a leap year and if it feels like a long time since you last worked one, that’s because four years ago February 29 fell on a Saturday.

You have to cast your mind back to February 2016, when David Cameron was prime minister and had only just announced the date for the Brexit referendum, for the last time salaried workers had to work an extra day without getting increased pay.

ADVERTISEMENT

But some people will find they’ll earn more this year. Here, Telegraph Money explains whether or not you can expect to benefit from an extra day’s work.

How leap years work if you’re a salaried worker

Despite there being 254 working days this year, rather than 253, salaried workers won’t see any difference to their annual pay because they are paid with reference to the year and not the specific hours worked.

Your employment contract will usually specify how many hours you’re contracted to work each week, which won’t be affected by a leap year.

It’s the same for staff who are paid weekly, as a leap day does not change the length of a seven-day week.

The exception to this is workers earning the National Minimum Wage.

Charlie Barnes, head of employment law at accounting firm RSM UK, explains: “Leap years can create National Minimum Wage compliance issues for businesses that employ salaried workers. This is because workers are paid in equal monthly instalments, based on the annual hours they are contracted to work.

“However, in a leap year, those basic annual hours increase because of the additional day. Given how infrequently this occurs, it’s common for employers to forget to increase workers’ pay to account for the additional hours worked on February 29.

“For those workers whose salary is based on National Minimum Wage rates, this creates an underpayment. This underpayment may occur in February, or towards the end of the year, depending on the type of contract the worker is on.”

If HM Revenue and Customs finds out companies have been underpaying staff – even if it’s by accident – the consequences can be quite severe.

Last summer, an investigation by HMRC found more than 200 companies, including Marks & Spencer, WH Smith and Argos, owed almost £5m to 63,000 employees for failing to pay the minimum wage to their lowest paid staff.

The companies were ordered to pay back what staff were owed, as well as receiving a £7m fine.

Nimesh Shah, chief executive of accountants Blick Rothenberg, warns employers need to be “careful” they don’t break the law.

“Because of the way pay is typically calculated, the number of working weeks in a leap year is slightly longer – and this might result in a person’s pay falling below the legal minimum of £10.42 per hour for a worker aged 23 and over,” Mr Shah says.

“The employer should carefully check their records to ensure that they do not fall foul of this important legal obligation.

“For most employees, they will be working an additional day in 2024 for no further pay; those that are paid the National Minimum Wage (or slightly higher) should definitely confirm with their HR department that their pay will be adjusted to reflect the additional working day to ensure that they don’t drop below the hourly National Minimum Wage.”

There is more good news for those on minimum wage as their salaries will increase from April 1, as the National Minimum Wage is set to rise above £11 for the first time to £11.44 for those aged 21 and above.

Leap years for workers on hourly pay

The rules are different again if you’re paid by the hour.

However, Alan Price, chief executive of HR software provider BrightHR, says: “Hourly paid workers who are paid monthly, will see a [pay] increase because the number of days worked in the pay reference period has changed.

“Look at it this way: they will have worked for 21 days in February rather than the usual 20 days.

“It might seem cause for celebration for an employee should they receive an inflated pay packet. But no one gets anything for free – if a worker’s pay increases, it’s because they have worked the extra time.”

Mr Shah adds: “Workers who are paid hourly won’t necessarily have an issue around the National Minimum Wage – they are simply paid their hourly rate for the time they work.

“This could mean a bit extra in their February pay packet, or some may treat themselves to a day off (if their employer allows).”

Recommended

The pay rises you need to beat inflation

Read more