You’ll find a detailed employee worksheet on page 9 of the application. borrowers who did not reduce salaries or wages of employees by more than 25% and experienced reductions in business activity as a result of COVID-19 related health directives. This number times 2.5 equals your PPP loan amount. Any qualified borrower of a PPP loan of $50,000 or less may use SBA Form 3508S to apply for loan forgiveness and be exempted from any reductions in their loan forgiveness amount based on reductions in full-time equivalent (FTE) employees or reductions in employee salary or wages. Compensation includes salary, vacation, leave (sick, parental, family, and medical), severance pay, wages, commissions or similar compensation, and cash tips. If you restore salary/hourly wages by Dec. 31, 2020 you may be eligible for the Salary/Hourly Wage Reduction safe harbors. You will be required to upload a completed spreadsheet into the application tool. For an example that illustrates this, check out these FAQs. If incurred during the last period of your covered period, the payroll costs must be paid on or before the next regularly scheduled payroll date. Companies should contact their financial or legal advisors or the Small Business Administration for more information regarding eligibility. For payroll costs only, the borrower may elect to use the Alternative Payroll Covered Period to align with its biweekly or more frequent payroll schedule. Normal payroll procedures should be followed; all loan forgiveness could be subject to an audit. All of these are in the Loan Forgiveness Application form packet. Borrowers who elect to use the Alternative Covered Period must use the Covered Period for non-payroll costs. The borrower is exempt from the reduction in loan forgiveness based on a reduction in FTE employees described above if the borrower, in good faith, is able to document that it was unable to operate between Feb. 15, 2020, and the end of the Covered Period at the same level of business activity as before Feb. 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and Dec. 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. Update as of June 8, 2020 : Based on the PPP Flexibility Act, signed by the President on June 5, 2020, we have updated our spreadsheet to account for some of the changes made in this act, which we summarized in a prior advisory . You can but you may want to wait because even if your covered period has ended you may still qualify for either the FTE or Salary/Hourly Wage Reduction safe harbor if you fully restore FTE and/or wage levels by Dec. 31, 2020. Be sure to consult with your bank, lender and/or qualified professional advisor and do not rely solely on the accuracy of the information inside. The borrower is exempt from the reduction in loan forgiveness based on FTE employees described above if both of the following conditions are met: (1) the borrower reduced its FTE employee levels in the period beginning Feb. 15, 2020, and ending April 26, 2020; and (2) the Borrower then restored its FTE employee levels by not later than Dec. 31, 2020 to its FTE employee levels in the Borrower’s pay period that included Feb. 15, 2020. Your loan forgiveness amount may be less, depending on whether the salary or hourly wages of certain employees during your covered period as compared to the period from Jan. 1, 2020 to March 31, 2020. PPP Loan Forgiveness Example Calculations. For example, if an employee was paid for 30 hours per week on average during the covered period, the employee is an FTE employee of 0.75. Note that a borrower that together with its affiliates received loans totaling $2 million or greater cannot use form 3508S. If an employer reduces the number of FTEs during the covered period, then the amount of loan forgiveness eligibility will be reduced proportionately. Similarly, if an employee was paid for ten hours per week on average during the covered period, the employee is an FTE employee of 0.25. As such, the calculator you download today may eventually be updated. No. The SBA FAQs provides an example of how this might apply to your business. Download the PPP 3508S Loan Forgiveness Calculator. Yes. President signs nearly $900 billion relief bill that includes new PPP, tax credits, expanded UI benefits. Borrowers may select only one of these two methods and must apply that method consistently to all their part-time employees for the covered period or the alternative payroll covered period and the selected reference period. In addition to the specific caps described below, the amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation is capped at $20,833 per individual in total across all businesses in which he or she has an ownership stake. Your non-payroll costs are the sum of the. You are not required to use the funds for non-payroll expenses, but if you do, the non-payroll expenses are limited to a maximum of 40% of your loan amount. Any amount of the loan that is not forgiven must be repaid at 1% interest rate over five years (for loans that were made after June 5, 2020) or two years (for loans made before June 4, 2020). is ineligible for PPP loan forgiveness in any amount when the lender has issued a full denial decision to SBA. Your covered period will be 24 weeks (168 days) if you are eligible but you can elect the original eight-week (56 days) period. There is a loan forgiveness application process you must complete before your loan can be forgiven in whole or in part. There was no change to the employee’s hourly wage during the covered period. The following formulas will be used based on reductions in the number of FTEs: *The average number of FTEs is determined by calculating the average number of FTEs for each pay period falling within a month. Non-payroll costs eligible for forgiveness consist of: An eligible nonpayroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. There is no guidance available on whether paying advances will be allowed for forgiveness. If you received an SBA EIDL loan from Jan. 31, 2020 through April 3, 2020, you can apply for a PPP loan. In order to apply for loan forgiveness for the PPP program, you are required to complete the U.S. Small Business Administration Form 3508. No more than 40% of the loan forgiveness amount can be attributable to non-payroll costs. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. Payments of loan principal, interest and fees may be deferred until the date on which the forgiveness amount is remitted to your lender. Thank you for visiting our PPP Loan Forgiveness Calculator! Nonpayroll costs must be paid or incurred during the Covered Period to be eligible for loan forgiveness. Yes, borrowers can appeal the SBA’s determination with the SBA’s Office of Hearings and Appeals (OHA). Bonuses and hazard pay are included in cash compensation. The sooner you return your employees to work and restore wages during your covered period the less your loan may be reduced based on FTE or wage reduction. There is no guidance available on if paying retroactive wages will be allowed for forgiveness. Interest will accrue during this time. Generally, the PPP loan amount that businesses qualify for is based on their average payroll expenses. Interested in a free quote or a product demo? You are still required to follow wage and hour laws in your state. By clicking "Calculate" you understand and acknowledge that although Nav’s PPP Loan Forgiveness Calculator seeks to provide borrowers with an accurate estimate of loan amounts that may be forgiven, such estimates should not be relied upon or … However, you will be required to begin payments on your loan and interest if you do not apply for loan forgiveness within 10 months of the end of your covered period. Apply the $100,000 salary cap for highly compensated employees and sole proprietors. self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form automatically qualify to use the Loan Forgiveness Application Form 3508EZ or lender equivalent and should complete that application. For 24 weeks, the maximum is $46,154 per individual, or for eight weeks, a maximum of $15,385 per individual), Employer paid benefits (group health care coverage such as insurance premiums and retirement contributions). *The loan forgiveness application released on June 17, 2020 states that a borrower may elect to use the eight-week Covered or Alternative Covered period if they received their loan prior to June 5, 2020. Calculate the eligible compensation (capped at $100,000 per year annualized; for 24 weeks, a maximum of $46,154 per individual, or for eight weeks, a maximum of $15,385 per individual) paid or incurred for your employees during the covered period. Read this article for more details on the EZ Form. If a borrower uses less than 60% of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60% of the loan forgiveness amount having been used for payroll costs. The … Payroll costs paid or incurred for employees on your payroll and not performing work (sometimes referred to as furloughed employees) may be included. The expiration date in the upper-right corner of the posted PPP loan forgiveness application forms is displayed for purposes of SBA’s compliance with the Paperwork Reduction Act, and reflects the temporary expiration date for approved use of the forms. Your payroll costs are the sum of the compensation, employer paid benefits, and employer assessed state and local taxes paid or incurred during your covered period. The values and figures shown are hypothetical, may not be applicable to your individual situation and may not represent the most recent guidance published by the U.S. Small Business Administration. None of the information on this site constitutes legal advice. The SBA.com® PPP Loan Calculator is designed to give you an estimate of the amounts involved in your PPP loan – specifically your estimated maximum loan amount and the estimated forgivable amount of your PPP Loan. Information provided is current as of the date published and is subject to change based on additional guidance. Yes, eligible business mortgage interest costs, eligible business rent or lease costs, and eligible business utility costs incurred prior to the Covered Period and paid during the Covered Period are eligible for loan forgiveness. First, determine your Average FTEs during your chosen covered period and the defined look-back period (referred to in the Loan Forgiveness Application as the Chosen Reference Period). Borrowers who received their loan prior to June 5, 2020, may contact their lender to discuss extending maturity date to five years. Any FTE reductions in these cases do not reduce the Borrower's loan forgiveness. To apply for forgiveness of your PPP loan, you need to complete the PPP Loan Forgiveness Application (LFA) or the PPP Loan Forgiveness Application Form 380 EZ (PPP EZ Form) and submit it to your lender that issued or is servicing your loan to obtain forgiveness. Alternative Covered Period. THE CALCULATOR MAY NOT REFLECT CURRENT INTERPRETATIONS OF THE SBA AND TREASURY DEPT. Next, sum the aggregate total of FTE employees for both the Chosen Reference Period and your chosen covered period, by adding all employee-level FTE employee calculations. Thank you for visiting our PPP Loan Forgiveness Calculator! Check out the SBA site for PPP loan forgiveness FAQs. More details are available in the SBA FAQs. The information in this page is based on laws, rules, regulations, and related guidance with respect to the Paycheck Protection Program (PPP), including guidance issued by the U.S. Small Business Administration (SBA) on August 11, 2020.We will periodically update this information, so please check back often and consider bookmarking this page. We would not recommend changing your normal payroll schedule. The examples below are for a borrower using a 24-week Covered Period. We are not providing legal advice. Rehires. In order to qualify for loan forgiveness, you must maintain 75 percent of your employee’s pay before COVID-19. Learn how reducing pay to your employees could impact your forgiveness amount and how to estimate pay reductions for purposes of the PPP Loan Forgiveness Estimator. We await further guidance to clarify whether to use the “received date of the loan amount” or the “loan made date” to determine eligibility to elect the eight-week period. Two separate safe harbors may exempt borrowers from any loan forgiveness reduction based on a reduction in FTE employee levels: FTE Reduction Safe Harbor 1. The PPP EZ Form can only be used on any size loan that fits in one of three categories: If you do not fall within one of these three categories, you must use the full PPP Loan Forgiveness Application. These workers are eligible to apply for PPP loans and PPP loan forgiveness as single-person businesses. Prepare for Paycheck Protection Program loan forgiveness. Salary/wage reduction. If a borrower uses less than 60% of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60% of the loan forgiveness amount having been used for payroll costs. The conditions of the Paycheck Protection Program. This website is not an agent, representative or broker of any lender and does not endorse or charge you for any service or product. If you were unable to operate between Feb. 15, 2020, and the end of the Covered Period at the same level of business activity as before Feb. 15, 2020, due to compliance with COVID-19 related guidance or requirements (FTE Safe Harbor 1) or you restore FTEs by Dec. 31, 2020 (FTE Safe Harbor 2) you may be eligible for the FTE Reduction safe harbors. Read more in this article about the PPP. Hazard pay is included in the 60% payroll costs calculation and is subject to all the same wage rules. It also is the period used to calculate any salary/hourly wage reductions to your loan forgiveness. In order to calculate your forgiveness amount you need to take the following steps: Here are some examples of how you can calculate your forgiveness amount with this methodology: It is absolutely essential to remember that the information on this sheet is for illustrative purposes only and accuracy is not guaranteed. Let’s first review the terms of the PPP. The maximum loan forgiveness amount where eligible payroll expenses equals or exceeds 60% of the total forgiveness (i.e. If you’d like to see a sample completed workbook: Once you have completed the workbook, you will need to download and complete the, U.S. Small Business Administration Form 3508. with the information generated, and submitted to your PPP lender. The Small Business Administration (SBA), in consultation with the Department of the Treasury, is providing this guidance to address borrower and lender questions concerning forgiveness of Paycheck Protection Program (PPP) loans, as provided for under section 1106 of the Coronavirus Use our PPP Loan Forgiveness Estimator to determine how much of your loan might be forgiven, and check out the FAQs below for additional information. For administrative convenience, borrowers with a bi-weekly (or more frequent) payroll schedule may elect to use an Alternative Covered Period for either the 24- or, if elected, the eight-week period that begins on the first day of their first pay period following the receipt of their loan. Do federal taxes count as “payroll costs” for calculating the forgiveness? THE PPP LOAN FORGIVENESS CALCULATOR IS FOR PRELIMINARY ESTIMATES OR MODELING OF POTENTIAL LOAN FORGIVENESS AMOUNTS ONLY. No. For example: An hourly wage employee had been working 40 hours per week during the borrower selected reference period (FTE employee of 1.0) and the borrower reduced the employee’s hours to 20 hours per week during the covered period (FTE employee of 0.5). Your loan forgiveness amount may be impacted based on a comparison of the salary/hourly wage rates during your covered period with the salary/hourly wages paid between Jan. 1, 2020 and March 31, 2020. Borrowers are generally eligible for forgiveness for the payroll costs (also referred to in the Loan Forgiveness Application as eligible payroll costs) paid or incurred during their covered period. Add the total amount paid to owner-employees/self-employed individuals/general partners. Borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from loan origination. For borrowers that received a PPP loan before June 5, 2020 and elect to use an eight-week Covered Period, this cap is $15,385. Payroll costs include: There is an Interim Final Rule providing guidance for independent contractors or sole proprietors. The interest on your loan is capped at 1% and payments of loan principal, interest and fees may be deferred until the date on which the forgiveness amount is remitted too your lender. your eligible payroll expenses ÷ 0.60) If you reduced salary and/or wages on eligible employees by more than 25%, your loan forgiveness amount may be reduced. Add Employer paid state and local taxes on the eligible compensation. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan. Read this article for more details on the EZ Form, Interim Final Rule on Appeals of SBA Loan Review Decisions Under the PPP, Full-time employees (FTE) Reduction Adjustment, The borrower is exempt from the reduction in loan forgiveness based on a reduction in FTE employees described above if the borrower, in good faith, is able to document that it was unable to operate between Feb. 15, 2020, and the end of the Covered Period at the same level of business activity as before Feb. 15, 2020, due to compliance with requirements established or guidance issued, details on calculating the salary/hourly wage reduction, Details of how this works are provided on the SBA website. Interest will begin to accrue when you receive your loan. Find out with our Public Service Loan Forgiveness Calculator below. Borrowers or their CPA advisers can use the tool to fill out the forgiveness application. the information on this sheet is for illustrative purposes only and accuracy is not guaranteed. 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