PPP Loan Education Center

+ What is the definition of Payroll Costs for loan forgiveness? For example, are all of the following included: state taxes associated to payroll included, payroll processing fees, federal taxes based on wages?

Per the SBA Interim Rule, payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wages, commissions, income, or net earnings from self-employment, or similar compensation. Employee wages are eligible at their gross amount (i.e. an employee earns $500 and federal taxes are $50, so the net pay is $450. The gross amount of $500 is eligible for forgiveness. Payroll processing fees are not specifically included as a payroll cost.

+ Did the 75% payroll threshold get lowered to 60%?

The Flexibility Act changed the percentage of forgiveness that has to be payroll costs from 75% of the forgiveness amount to 60%.

+ I can’t get employees to come back to work, and now have to work shifts, do owners hours count towards hours/payroll and FTE?

An employee is any member of your company that receives compensation through your payroll. So as an owner, if you receive compensation through your payroll, your hours and payroll would count as an employee.