In addition, download Burns & Levinson’s PPP Loan Forgiveness Application Calculator, created to assist companies with processing the calculations in the PPP Loan Forgiveness Application and related PPP Schedule A. Below we discuss some key forgiveness and application considerations to keep in mind as you review the PPP Loan Forgiveness Application and start preparing for the PPP loan forgiveness process. The SBA is also expected to release additional guidance on the forgiveness application and related matters. Small Business Administration (“SBA”) has released the PPP Loan Forgiveness Application with respect to the Paycheck Protection Program (“PPP”). 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, wage, commissions, income, or net earnings from self-employment or similar compensation.Understanding the PPP Loan Forgiveness Application – and an Application Calculator Average monthly qualifying payroll: $100,000Įxample 3: No employees make more than $100,000, outstanding EIDL loan of $10,000.Įxample 4:Some employees make more than $100,000, outstanding EIDL loan of $10,000.Subtract compensation amounts in excess of an annual salary of. The examples below illustrate this methodology.Įxample 1: No employees make more than $100,000Įxample 2:Some employees make more than $100,000 Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between Januand April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid). Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5. Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12). Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year. Step 1: Aggregate payroll costs (detailed below) from the last twelve months for employees whose principal place of residence is the United States. The following methodology, which is one of the methodologies contained in the CARES Act, will be most useful for many applicants. How do I calculate the maximum amount I can borrow? Be sure to consult with your bank or lender and do not rely on the accuracy of the results below. 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. Disclaimer: The information provided by the SBA.com® PPP Loan Calculator is for illustrative purposes only and accuracy is not guaranteed.
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