Can I Give My Employees A Raise Under PPP?

What payroll costs are included in PPP loan forgiveness?

Answer: Payroll costs include all forms of cash compensation paid to employees, including tips, commissions, bonuses, and hazard pay.

Note that forgivable cash compensation per employee is limited to $100,000 on an annualized basis..

What is full time equivalent employee for PPP?

PPP Loan Forgiveness Application: Full-Time Equivalent (FTE) Employee Calculation. … Any employees working at least 40 hours per week are counted as 1.0 FTE. For any employee working less than 40 hours per week, you are given two options to calculate their full-time equivalency.

What does the PPP loan cover?

The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and. Employee and compensation levels are maintained.

How much can I pay myself with PPP?

Here’s what you need to know: The loans require employees to be paid no more than what they would normally earn. For employees who normally earn over $100,000 per year, the maximum weekly payment is capped at about $1,925.

How does FTE affect PPP?

The borrower’s count of FTE employees during their covered period is divided by the FTE count from the selected base period. … This ratio is referred to as the FTE reduction quotient. The FTE reduction quotient is multiplied by the total PPP loan amount to arrive at your maximum forgiveness amount.

How is FTE calculated for PPP forgiveness?

To calculate the average FTE for each employee, Borrowers need to accumulate the total hours paid during the Covered Period (and chosen Reference Period) and divide the average number of hours paid per week during the relevant period by 40, and round to the nearest tenth.

How do you qualify for PPP loan forgiveness?

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll). PPP loans have an interest rate of 1%. Loans issued prior to June 5 have a maturity of 2 years.

How are PPP loans calculated for employees?

The easiest way to find an average is to add the total number of employees you had during each month of the year together, and divide by 12. Let’s say in this case that works out to 2.75—you should round to a whole number, three, and include this on your PPP application.

Is PPP loan forgiveness all or nothing?

1. Reduction in Percentage Which Must Be Spent on Payroll Costs; Possible All or Nothing Condition. … This will permit greater uses of PPP Loan proceeds for such non-payroll items as rent, mortgage interest, and utilities.

Can you increase wages for PPP loan forgiveness?

what do I do? If you reduced an employee’s wages by more than 25%, increase their compensation as soon as you receive the PPP loan to maximize loan forgiveness.

Can owners salary be included in PPP?

Eligibility for the EZ application form: SBA confirmed that “sole proprietors, independent contractors, and self-employed individuals 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” …

Is there a deadline to apply for PPP loan forgiveness?

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 example, a borrower whose covered period ends on October 30, 2020 has until August 30, 2021 to apply for forgiveness before loan repayment begins.

Can bonuses be included in PPP loan forgiveness?

For the purposes of PPP loan forgiveness, SBA will consider the gross amount of cash compensation paid to employees. All forms of payment to employees qualify for loan forgiveness up to the maximum forgiveness limit, including salaries and wages, bonuses, commissions, or any other incentive payments.