About the PPP Loan Forgiveness Calculator

The Paycheck Protection Program (PPP) was a federal relief program established during the COVID-19 pandemic to help small businesses keep their workforce employed. A key feature of the program was the ability for borrowers to have their loans fully forgiven if they met certain criteria. This calculator helps estimate the forgivable amount of a PPP loan based on the primary expense rules.

How PPP Loan Forgiveness Works

To qualify for full forgiveness, a business had to spend the loan funds on eligible costs within a designated "covered period" (either 8 or 24 weeks). The calculation is based on three main rules:

• The 60% Payroll Rule: At least 60% of the loan funds must have been spent on eligible payroll costs.
• Eligible Expenses: The remaining 40% could be spent on other eligible costs, including business mortgage interest, rent or lease payments, and utility payments.
• FTE and Wage Maintenance: The final forgiveness amount could be reduced if the business reduced its number of full-time equivalent (FTE) employees or cut employee wages by more than 25%. This calculator focuses on the expense rules. For more details, business owners can consult the official SBA website.

Frequently Asked Questions (FAQ)

What were considered eligible payroll costs?

Payroll costs included a wide range of employee compensation, such as salary, wages, commissions, tips, employee benefits (including health insurance and retirement contributions), and state and local taxes assessed on employee compensation.

Is the PPP loan program still active?

No, the Paycheck Protection Program is no longer accepting new applications. It concluded on May 31, 2021. This calculator is intended for informational and historical purposes for businesses that received a PPP loan.