How To Compute Payroll Costs For PPP Loans

Paycheck Protection Program Loans May Be Drying UP!

If still available through your bank the funds that are available are for the sum of:

• The average monthly payroll costs times 2 ½, plus
• Any EIDL received after January 31, 2020 and before April 3, 2020 Average monthly payroll costs are calculated based on the one-year period prior to the loan disbursal date except for seasonal employers and employers not in business between February 15, 2019 and July 30, 2019.
• Or $10 million whichever is less.
 
In the case of seasonal employers, the employer may choose to calculate the average monthly payroll costs based on the 12-week period starting February 15, 2019 or the period starting March 1, 2019 through June 30, 2019.

In the case of new employers not in business between February 15, 2019 and July 30, 2019, the average monthly payroll costs is calculated based on the period beginning January 1, 2020 through February 29, 2020.

Payroll costs include (calculated as an average monthly amount): Section 2f.
• Compensation (not to exceed $100,000**) to employees in the form of salary, wages and commissions;
• payment of cash tips;
• payment of vacation;
• parental, family, medical or sick-leave;
• allowance for dismissal or separation;
• payment required for group health benefits (including insurance premiums);
• payment of retirement benefit; or
• payment of State or Local tax assessed on employee compensation;
 
**Section 2g. specifically excludes from Compensation any amount over $100,000 (not payroll costs)

The above Payroll Costs must be reduced by any of the following:

Taxes imposed or withheld under chapters 21, 22 and 24 of the IRC of 1986 during the covered period.

• Federal Social Security and Medicare imposed on the employee;
• Federal employee withholding tax. Section 2g.(iii) seems to say “Federal employment taxes imposed or withheld between 2/15/20 – June 30, 2020;
• compensation to an employee whose principal residence is outside of the U.S.;
• qualified sick leave for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act; and
• Qualified family leave wages for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act.
• And, sole proprietor income or independent contractor compensation not in excess of $100,000.
Do not include sole proprietor income or independent contractor compensation. They will file for their own PPL not in excess of $100,000.

Contact Cory Lyon with questions at 561-209-1120 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .