There are many payment models for employees, everything from ride share’s flaunted “cash out up to 5 times per day!” to getting paid once a month is common.

In between is getting paid bi-weekly. That usually means getting paid twice a month. But every approximately 6 months, an extra payday squeaks into the month. That’s how biweekly pay has an average of 26.1 paychecks per year (and the years there are 27, oh boy, everyone gets very confused on what happens with that 27th paycheck).

Some of our expenses (called deductions) covered directly out of our paychecks are calculated on a per-month basis, so in those extra (3rd) paychecks we get to take a little more money home.

What might those include? That’s employer specific, and of course depends on what you’re having deducted in the first place. But potentially that might be:

• A variety of health plan / insurance costs (medical, dental, vision, life)
• Anything associated with insurance, such as a side fund contribution to a life insurance account
• Other benefits contributions (again, that’s employer specific), such as DCFSA’s, HCFSA’s, HSA’s, 401k’s, 403b’s
• Transportation expenses

With those things, many of which are pre-tax, not being withheld from your paycheck, you will likely pay slightly more in taxes. But the net change will be more money headed to your pocket than even a usual check, besides the fact it’s an extra check in a world that usually revolves around months.

If you’re having a tight time financially right now, a 3rd paycheck in a month, and a slightly bigger one at that, is a great planning opportunity. If you’ve got a 3rd paycheck month right now, then it’s likely your next 3 paycheck month will be December 2020.

What are you doing with your extra, larger, paycheck?