There are going to be some major payroll changes in 2026 right from the start. At least two stem from The One Big Beautiful Bill (OBBBA):
- FLSA Overtime
- Tip Reporting
Then there’s the odd, but natural, quirk of the calendar cycle potentially giving us 27 instead of the usual 26 pay periods.
Let’s take a deeper look at all three of these to understand how they can impact your business and what you can do to make the adjustments less stressful.
OBBBA Compliance Issues: Key Concerns for Business Owners
What is OBBBA FLSA Overtime?
The OBBBA has created new employer reporting requirements for overtime pay. It doesn’t change the Fair Labor Standards Act (FLSA) requirements for employers to pay overtime. But it did create a new federal tax deduction for employees based on their overtime pay. Employers must track and document overtime hours in a way that employees can reference when filing their returns.
New Rules for OBBBA Tip Reporting
Tip reporting requirements are also changing. Employers must start reporting qualified tips and an employee’s tipped occupation code starting in 2026. To count as a qualified tip, it must be voluntarily given by a customer to an employee in a qualifying occupation in a cash medium. Examples of qualifying occupations include traditionally tipped jobs in the food service and hospitality industries. The tip also must be a non-negotiated amount, decided upon by the customer only. A new box, 14b, will have the occupation code. Qualifying tips will appear with the code “TP” in box 12 of the W2.
To get a better understanding of these two requirements, please refer to this IRS article outlining the new tax deductions.
Managing the 27 Period Payroll Change in 2026
A typical calendar year has 52 weeks. Due to the normal shift that occurs in the calendar cycle, 2026 will have 53 weeks. This means there is potentially an extra 27th or 53rd pay period to account for, either at the end of 2026 or the beginning of 2027. That change can have ripple effects on:
- Benefit plan deductions
- Paycheck amounts (based on whether people have a fixed annual salary)
- Holidays
- Budgeting
There are a variety of ways a company can approach this problem. But it is very important that you consult with experts in accounting and law to make a decision that works best for your organization.
Workforce Management Software Eases the Stress
If handling all these changes seems like a daunting task, there is a solution. A modern workforce management platform can easily keep up with these changes–and any more that may come up throughout the course of 2026. A cloud-based system incorporates those updates especially quickly, with no need for downtime. It also handles the complicated tracking and calculation needed to stay compliant with changing laws and regulations.
Workforce Go: Your Trusted Partner in Payroll Management
Whatever your vision is for 2026, Workforce Go can help get you there. For years, we’ve helped small to mid-sized businesses automate their payroll workflows, saving them time and money. No matter how complicated your payroll structure is, we have a solution to handle it.
Our software automatically handles the new OBBBA reporting requirements, with little fuss on your end. Our platform will automatically populate the FLSA overtime information in box 14 of the W2 and provide documentation for tips. We don’t just help you stay on top of the OBBBA either. Workforce Go always stays up to date with all federal, state, and local requirements, including union regulations. You never have to worry about blowback from non-compliance.
Workforce Go also can be configured to support your business decisions regarding the extra week/ pay period for 2026. Our platform organizes all of your time, payroll, and people workflows, helping to minimize the disruptions caused by the calendar shift. It also seamlessly integrates with popular ERPs like Sage and Acumatica. You get unified data, no information silos, and greater efficiency all across the board.
If you love the idea of a modern payroll system, but are nervous about the cost, we’ve got that covered too. Our latest innovation, Payroll on Us, takes advantage of FICA tax savings to completely offset the cost of payroll.
Conclusion
Change can be very unsettling. Let Workforce Go help bring some steadiness to your organization with our reliable and adaptable platform. We’ll smooth out the rough spots of payroll management so you can focus more on growing your business.
Ready to overcome the first major payroll challenges in 2026? Contact Workforce Go for a demo today!
