how the extra day could boost your bank balance
Much like the Olympics or the World Cup, leap years come around every four years. Just like those events, there are also winners and losers thanks to the extra day.
On February 29, self-employed people and contractors will rejoice at the possibility of boosting their earnings. However, employees paid an annual wage will effectively spend the day working for free.
Outgoings such as food, gas and electricity will rise because of the extra day, but other costs such as mortgages and rent are fixed.
Analysis by accountancy firm HW Fisher of data published by the Office for National Statistics showed that paying for an extra day of food, gas, electricity, water and running a car would cost an average person £16.60.
However, non-variable costs will typically outweigh this loss. The average person would enjoy an additional day of accommodation, phone and broadband, TV licence, Netflix subscription and gym membership for “free”, a gain of £26.
Salaried workers will receive no boost for working an extra day this year, but those who are self-employed will receive an extra day of income, should they choose to work.
The leap year also has tax implications which must be considered. Some overseas citizens or expats can be ordered to pay tax in Britain if they exceed the number of days allowed in the country. They must be careful not to incur a hefty bill by spending longer in Britain than the rules allow.
Tim Walford-Fitzgerald, of HW Fisher, said: “Having an extra day in the year may mean you will spend more, but it doesn’t necessarily mean everybody will earn more.
“If you are a salaried worker, then you will be working an extra day for free. Those who are on an hourly or daily rate will have the potential to earn an extra day of pay.”
He added: “However, for overseas citizens who pay tax liabilities according to the number of days spent in Britain, make sure you keep tally this year and account for the extra day.”
As February 29 falls on a Saturday this year, technically the extra working day falls on December 31, which is a Thursday. This means that there will be 53 Thursdays this year, as opposed to 52.