Today is Feb. 29, Leap Day. That extra day added to the calendar every four years may seem innocent enough, but is it costing you money?
Every four years we add a day to the calendar to balance out our trips around the sun. It takes the Earth approximately 365 days and six hours to make the annual trip. So, we push the cosmic leftovers to the side for the first three years and then add them all back in to give us 24 hours on the fourth year.
The addition of that day to the calendar, though, has some who work on a salary wondering if they are working for free. The short answer is no, you aren't working for free on Leap Day ... you're just working for less than normal.
So, how does that one extra day on the calendar impact your bottom line? Let's do a little math.
In a typical year, an average annual salary covers 261 working days (365 days per year minus 104 weekend days). In a leap year, an extra day is added which brings the total number of working days to 262.
Let's assume you make $50,000 per year in a non-Leap Year. If we take that salary and divide it by the 261 work days, that breaks down to $191.57 gross income, per day. During a Leap Year, with 262 work days, that breaks down to $190.84 gross income, per day. That means during a leap year you will make .73 cents less per day in order to fund your salary on Feb. 29.
Not a big deal, right? After all, the entire point of a Leap Year is to balance things out ... and making less per day does that without requiring anyone work for nothing.
What about hourly employees? With the extra day of work added to the calendar, they are the real winners here with a full additional days pay added to their annual income.
See you in 2016.