Ppp Fte Calculation Sba


To calculate the number of full-time equivalent (FTE) employees, divide the average number of hours paid for each employee per week by 40, capping this at 1. The Small Business Administration (SBA), in consultation with the Department of the Treasury, intends to provide timely additional guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES. Any employee that is fired for cause, quits, or is offered a job back and declines, does not count as a reduction. FTEs during the period beginning on February 15 and ending on April 26, 2020, but who by no later than December 31, 2020 restored the FTEs to the level that existed on February 15. Step 5: Determine if a Safe Harbor applies by calculating any adjustment because FTEs and salary/wages were restored by December 31, 2020 Borrower must have reduced FTEs, salaries/wages between February 15 and April 26, 2020, and must have eliminated the reduction no later than December 31, 2020. Even though the funds were used over 16 weeks, the additional $150 of reduction would be multiplied by the full 24 weeks to calculate the loan forgiveness reduction of $3,600 ($150 x 24 weeks). PPP Flexibility Act states that a borrower shall use at least 60% of proceeds to receive forgiveness SBA interprets this to mean a proportional limit on nonpayroll costs as a share of the borrower’s loan forgiveness amount, rather than a threshold for receiving any loan forgiveness. Determine total FTEs as of the earlier of December 31, 2020, and the date the application is submitted. FTE Calculation: The application does not use SBA’s prior 30-hour full-time metric for calculating full-time employees (FTEs). Small Business Administration (SBA) and Treasury issued an 18-page document Tuesday detailing how Paycheck Protection Program (PPP) borrowers should calculate revenue reduction and maximum loan amounts for second-draw PPP loans. 5 to the total number employees that work less than 40 hours per week. If an employee works 40 hours per week, they are counted as 1 FTE and anything below 40 hours is calculated as 0. For each employee, enter the average number of hours worked per week, divide by 40 and round the total to the nearest tenth. If the FTE as of June 30, 2020 is greater than or equal to the FTE for the February pay period, the safe harbor is satisfied and the FTE is counted. It will allow certain businesses such as banks and current SBA lenders, in addition to new or nontraditional lenders approved by the Treasury Department, to provide PPP loans on behalf of the SBA to small businesses affected by COVID-19. ” Step 1: Learn how to calculate your headcount (aka total full-time equivalent employees or “Total FTEs”) during an applicable time period. See page 4 of Form 3508 Instructions or. This form was revised to now be applicable for borrowers that received $150,000 or less from either a first draw or a second draw PPP loan. At the start of the coronavirus (COVID-19) pandemic, the U. Gotcha #1: Headcount Reduction. 5 FTE for the week. However, there are indications that they will use the Affordable Care Act (ACA) FTE calculation as a guide. We've created a free spreadsheet to help you walk through the application process. Small Business Administration (“SBA”) posted a fifth Interim Final Rule on Additional Criterion for Seasonal Employees. The SBA may issue additional forgiveness-related guidance. The SBA loans under Section 1102 of the CARES Act (sometimes referred to as "7(a) Loans") which are eligble for forgiveness are available to employers with less than 500 employees. 5 months = 56 days / 76 days = 74 percent rounded up to 75 percent). Confirm the correct calculation on Line 7 5. The initial rules stated that the measurement period is 8 weeks starting on the date of funding. The SBA said it plans to continue to process all PPP forgiveness applications in an “expeditious manner. Calculate the total FTE as of June 30, 2020. PPP Loan Amount forgiven Cap on PPP loan PPP Loan Running Total Mortgage interest paid Rent paid Utilities paid Total amount that can be forgiven Section 1106(d)(2) percentage Average number of full-time equivalent ("FTE") employees per month in 8-week period Average number of FTE employees per month from February 15, 2019 to June 30, 2019. • This approach allows for a straightforward calculation that consistently measures the number of FTEs based on the Federal minimum wage and a standard definition of the number of hours worked to be considered an FTE. This is only needed if you have selected the second. Lines 11-13 calculate the FTE reduction quotient. do NOT contact me with unsolicited services or offers. With the funding mostly complete, attention has now turned to the critical element of loan forgiveness. Determine total FTEs as of the earlier of December 31, 2020, and the date the application is submitted. Verification showing the average number of FTEs for the payroll period. 5 months = 56 days / 76 days = 74 percent rounded up to 75 percent). Calculate your average monthly payroll cost and multiply that number by 2. The Paycheck Protection Program (PPP) closed for new loans on August 8, 2020, though a renewal is currently being negotiated in Congress. If more than 1. Add lines 1, 4, 6, 7, 8, and 9. The hours of employees who work less than 40 hours are calculated as proportions of a single FTE and aggregated. Line 10 totals the payroll costs listed on PPP Schedule A, with the amount carried to line 1 of the PPP Loan Forgiveness Calculation Form. This echoes the guidance included in the loan forgiveness application. > FTE Headcount during January 1 through February 29, 2020 = 100 FTE. It is not headcount. Therefore, seasonal, part-time, and full-time employees all count as an “employee” no matter the number of hours worked. Companies should contact their financial or legal advisors or the Small Business Administration for more information regarding eligibility. Fill out the form to get our free loan forgiveness calculator spreadsheet, including: Forgiveness Amount Calculation. 0) • For a payroll that includes the 3 employees above, the FTE count is: 0. How to Calculate PPP Loan Forgiveness and Apply. PPP Loan Calculator Download or make a copy to input data DISCLAIMER: PPP loans are highly nuanced and require expert guidance to understand true loan & forgiveness amounts for your business. EMPLOYER CHECKLIST WORKSHEET PPP Eligibility + Loan Calculator WORKSHEET C: REDUCTION ON FORGIVENESS AMOUNT C Historical Period A Average FTEs Per Month from February 15, 2019, through June 30, 2019 FTEs Historical Period B Average FTEs Per Month from January 1, 2020,. The SBA also offers a simplified method that assigns all PT employees as 0. FTE calculation revealed – Under the CARES Act, a Borrower’s forgiveness amount will be reduced by a factor based on a reduction in the average “full-time equivalent employees” (“FTE”) during the covered period. Some of the guidance includes: A description of the 8 week covered period as a 56 day period. A borrower. Latest PPP loan guidance. period for FTEs who not actively working, so long as those employees still received at least 75% of their regular pay. The loan forgiveness. A simplified method is available assigning an employee that works 40 hours or more as 1 FTE, with other employees that work less than 40 hours will be assigned as. 0 FTE employee is an employee who works 40 hours (or more) during the work week. Line 10 totals the payroll costs listed on PPP Schedule A, with the amount carried to line 1 of the PPP Loan Forgiveness Calculation Form. PAYCHECK PROTECTION PROGRAM (“PPP”) SBA PPP LOAN FORGIVENESS GUIDE LOAN FORGIVENESS GUIDELINES UPDATED 6/16/2020 Page 1 An important element of the PPP is the forgiveness afforded to loan recipients for up to 100% of the loan amount, if the loan is properly managed per the terms of the loan agreement. Sum across all employees and enter: Step 2. Calculation of number of FTEs and payroll cost. The original loan forgiveness application clarified the base hours of 40 hours per week to calculate an FTE. Please correct your entries and resubmit’. This LIVE, online 90-minute course provides everything you need to know about applying for and receiving PPP Loan Forgiveness. To calculate FTEs, the SBA is not using the generally recognized threshold of 30 hours per week being an FTE. Instructions PPP forgiveness calculator - Prior version (5/22/20 - 6/17/20) - Excel Please see our important disclaimer regarding use of the calculator inside the Excel spreadsheet. On May 15, the SBA released a standardized PPP loan forgiveness application with instructions. For loan amounts less than $150,000, you can use the new Form 3508S. What if my FTE calculation differs from the number of employees that I listed on my PPP loan application? That’s okay. The "Borrower's Disclosure of Certain Controlling Interests" requires Borrowers to disclose whether certain Government Officials, deemed "Covered Persons" owned a controlling (20%) interest in the Borrower at the time the Borrower applied for its PPP Loan. The PPP loan program expires on March 31, 2021. $1,000,000: X: 300 ÷ (1) 400 (2) 350. This form is. The PPP Loan Forgiveness Application and IFR on Loan Forgiveness clarify that the reduction to loan forgiveness for. FTEs during the period beginning on February 15 and ending on April 26, 2020, but who by no later than December 31, 2020 restored the FTEs to the level that existed on February 15. Enter the borrower’s total FTE as of the earlier of December 31, 2020, and the date this application is submitted:. 1) CARES - 1106, (d), (2), (B). average number of FTE employees per month during Covered Period. The SBA also offers a simplified method that assigns all PT employees as 0. Business Legal Name (“Borrower”) DBA or Tradename, if applicable Business Address NAICS Code Business TIN (EIN, SSN) Business Phone ( ) - Primary Contact E-mail Address ☐ First Draw PPP Loan ☐ Second Draw PPP Loan (check one) SBA PPP Loan Number: Lender PPP Loan Number:. SBA PPP Loan Number is the same as the Lender PPP Loan Number Can be found on Online Banking or by asking a Banking Assistant (BA –Connie, Lynnette, Jody, Shannon, or Melissa) or your lender. Recently, the Small Business Association (SBA) began accepting applications for PPP Loan Forgiveness. SBA Form 3508S: Relief for Small Loan Recipients The streamlined SBA loan forgiveness application is available to business owners who borrowed $50,000 or less in PPP funds. 0 FTE by December 31, 2020 would mean that the Coastal Company would have to take the salary based loan forgiveness reduction unless her salary was also increased above the 25% threshold. The SBA has been administering the Paycheck Protection Program loan for businesses to help maintain their staff and payroll and cover related costs during the Coronavirus pandemic. A forgivable PPP loan is already tax-free, so the IRS wants to prevent “double-dipping” (i. (This number can not exceed 1. For example: If a business has three employees who worked 40 hours and two that worked 20 hours, it would have. The first is your average FTE during a chosen reference period, which serves as your pre-loan benchmark for full-time equivalent figures. Average FTE: Borrowers will be required to calculate the average full-time equivalency (FTE) during the Covered Period or the Alternative Payroll Covered Period. Form 3508S was originally only available to those borrowers who received $50,000 or less in PPP funding. PPP Forgiveness is an evolving process, subject to change as further guidance comes out from the SBA and US Treasury. PPP forgiveness calculation There are 11 lines total in the SBA's forgiveness amount calculation, broken up into four main sections. PPP Loan orgiveness for MOCKDATAONLY-Osinski-Romaguera Luilt by The Forgiveness Calculator updates each time the ovvners application is saved Status Helpful Link Full PPP Loan Amount $21,250. I have a mere 3 weeks left of my PPP. Due to caps imposed by Treasury/SBA, the loan amount for such an applicant with no other employees cannot exceed $20,833 (i. If the entry for step 4 is greater than or equal to step 2, enter 1. 175/30 = 5. Our average number of FTE was 14 according to our Paychex report, which is what we used when we applied for PPP. The full-time employee (FTE) calculation is based on an employee working 40 hours/week. Calculation of Average FTE: Under the PPP, loan forgiveness can be reduced if there has been a reduction in “average full-time equivalent (FTE) employees” during the covered period. Borrowers should instead calculate the true average FTEs and compare to the actual FTE calculation. Although the two interim final rules provide some additional information and guidance, there are two critical issues that were not addressed: Potential extension of the 8 week covered period, and the requirement that PPP borrowers spend. PPP Loan Forgiveness for Employers. Lines 6 – 8: Non-Cash Compensation Payroll Costs During the Covered Period or. SBA PPP Loans – Calculations and Considerations for Maximizing Forgiveness Cooley Alert April 30, 2020 Loan forgiveness is a key feature of the Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA) pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Your lender can use the SBA loan forgiveness application forms or create their own online application form similar to the PPP loan application process. The rules for a reduction in salary or wages reducing PPP loan forgiveness that apply to first draw PPP loans also. Average Full-Time Equivalent Employees (FTEs) are determined by calculating the average number of full-time equivalent employees for each pay period falling within a month. Some of the problems and pitfalls with PPP forgiveness are described below. Treasury Department, re-opens the Paycheck Protection Program (PPP) loan portal to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications on Friday, January 15, 2021 at 9 a. An SBA-backed loan that helps businesses keep their workforce employed during the COVID-19 crisis. The original loan forgiveness application clarified the base hours of 40 hours per week to calculate an FTE. The revised rule allowing practice owners to include up to $20,833 of their compensation towards the PPP loan forgiveness calculation extends to S-Corp owners too. Visit the SBA’s website frequently as additional guidance is expected in the coming weeks. Initial payroll costs and FTE calculation are based on 2019 for non-seasonal businesses, 2/15/19 to 6/30/19 for seasonal businesses, and 1/1/20 – 2. Divide line 12 by line 11 (or enter 1. The Act states that for any reductions that occurred beginning on February 15, 2020, and ending 30 days after the enacting of the Cares Act (April 26, 2020) will not reduce the amount of loan forgiveness IF by June 30, 2020, the recipient of the loan has eliminated the reductions in employees or reduction in wages. This new form also simplifies and speeds-up your lender’s review process of your forgiveness loan application. Therefore, seasonal, part-time, and full-time employees all count as an “employee” no matter the number of hours worked. FULL TIME EQUIVALENT (FTE) VERIFICATION. Instructions to PPP Schedule A, Line 11). However, SBA determined that 40 hours “better reflects what constitutes full-time employment for the vast majority of American workers. Some of the guidance includes: A description of the 8 week covered period as a 56 day period. of FTEs during the 8 week period following the loan origination compared either April – June of 2019 or, at the election of the business, January / February 2020. Therefore, for each employee, borrowers enter the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. The federal government has now approved the Paycheck Protection Program (PPP) - SBA 7(a) CARES ACT which provides for unprecedented support to the small business community in the wake of the COVID-19 Pandemic. Those funds have since been depleted. The hours of employees who work less than 40 hours are calculated as proportions of a single FTE and aggregated. forgiveness application. To determine if you qualify for the 3508S form, click here. Check with your tax professionals but per the SBA, any expenses that a borrower claims for forgiveness under the PPP cannot then be deducted from the borrower’s business expenses. The Small Business Administration’s (“SBA”) has provided limited specific guidance to inform borrowers’ documentation efforts, so we are providing considerations a borrower may keep in mind as it aims to comply with the documentation requirements associated with application for, the receipt of, and the use of Paycheck Protection Program (“PPP”) loan proceeds (for forgiveness or. The Application defines FTE. Max value of 1. SBA released 124 pages of new guidance (January 7, 2021) for PPP First and Second Draw, and just recently released all of the updated application forms. THE CALCULATOR MAY NOT REFLECT CURRENT INTERPRETATIONS OF THE SBA AND TREASURY DEPT. For example, a part-time employee who works an average of 30 hours per week would count as a. The SBA has 90 days to respond to applications. The FTE Reduction Safe harbor compares head count on February 15, 2020 to June 30, 2020. On May 15, 2020, the SBA released a PPP Loan Forgiveness Application form. 5 FTE in the eyes of the SBA. If the business is in place for less than a year, use the average number. Please correct your entries and resubmit’. As the leading SBA lender in our markets, Santa Cruz County Bank looks forward to assisting our community with this emergency. For your information, we’ve outlined two key PPP loan forgiveness reductions below. The reduction will not apply if the borrower reduced its FTE employee levels from 2/15/2020 through 4/26/2020 and then restored its FTE employee levels by 12/31/2020 (for a PPP loan made in 2020) or the last day of the Covered Period (for a PPP loan made in 2021) in the pay period that included 2/15/2020. › For each employee, calculate the average number of hours worked per week during the respective period & divide by 40 & round to the nearest tenth with a maximum of one. Explain the SBA guidelines on PPP loans less than or equal to $150,000, Form 3508S. The maximum PPP loan forgiveness is reduced by any reduction in full-time equivalents (FTE) and any reduction in average annual salary in the eight-week covered period versus several other periods which are outside of the relief period (beginning on March 27, 2020). The legislation would extend the PPP application period until May 31, 2021, and then provide an additional 30-day period through June 30, 2021 for SBA to process applications that are still pending. Simmons Bank PPP Loan Calculation Worksheet. Pay a tax professional to calculate your company’s FTE for you. Enter the borrower’s total average FTE between February 15, 2020 and April 26, 2020. Example: 37. 2: Same facts for Mary as above, except she also received a $1,000 EIDL grant. To help you navigate this document, please click on the commonly asked questions outlined below. The SBA’s Loan Forgiveness Application provides detailed instructions for borrowers and the calculation of the PPP loan forgiveness. restoring Sally to a 1. 0 FTEs) and all those who work less than 40 hours as part-time (0. For your information, we’ve outlined two key PPP loan forgiveness reductions below. We wanted to let you know that the SBA has released the. 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. The new guidance instructs borrowers to calculate FTEs by entering the average number of hours paid per week per employee, divide by 40, and round the total to the nearest tenth. > Forgiveness Calculation: $400,000 Loan, multiplied by 95% = $380,000 (a 5% reduction in forgiveness). A borrower with a loan greater than $50,000 and up to $150,000 must comply with the requirements under PPP, including calculating any reduction in forgiveness amounts based on reductions in FTEs or employee salary or wages. If the SBA determines that the borrower was ineligible for the PPP loan, it will direct the lender to deny the loan forgiveness application. This form can only be used if the total PPP loan amount that the borrower received from their lender was $50,000 or less. 9 FTE or 15(hours)/40(hours) = 0. e, benefiting from both the IRS and SBA). > Ratio of Covered Period FTE to Historic FTE = 95/100 (95%). SBA’s new size standard average annual receipts calculation rule is effective Jan. Many of the rules were consistent with our expectations after reviewing the forgiveness application, which was issued one week prior, but the guidance does provide a few of the significant confirmations and several new clarifications:. What if my FTE calculation differs from the number of employees that I listed on my PPP loan application? That’s okay. All Borrowers must submit with the Application a “PPP Schedule A” and “PPP Schedule A Worksheet. For sole proprietorship, the PPP loan amount will be calculated using the business’ net profit. The long overdue PPP Forgiveness Application was released by the SBA on May 15, 2020, providing some much needed clarification for small businesses in calculating their potential forgiveness amount. SBA issues to minimize the impact of the repayment of unforgiven portions of your ppp loan. 5/12ths of $100,000) and the maximum amount that can be forgiven for. The SBA plans to issue additional regulations and guidance for borrowers soon. The SBA website has some instructions on what is forgivable and what is not, so dont go only by what I write below. In order to calculate: For each employee, enter the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. The first way to calculate FTE is to take the average number of hours paid each week, divide by 40, and round to the nearest tenth. How to calculate FTE: Average number of hours paid during the covered period (or alternative period) and divide by 40 before rounding to the nearest 10th (ex. Calculation of number of FTEs and payroll cost. Some applicants, including self employed and sole proprietors, may now use gross income to calculate their loan amount using new simplified SBA forms 2483-C and 2483SD-C. An applicant that is otherwise in compliance with applicable SBA requirements and that complies with Treasury’s IFR rule on seasonal workers, will be. Confirmation that the full-time equivalency (FTE) calculation will use 40 hours or capped at 40 hours for those that work more. For employees who work fewer than 40 hours, their hours are calculated as proportions of a single FTE employee and aggregated. The SBA started approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Oct. The Treasury Department and the SBA recently released the application form and instructions for loan forgiveness. 0 for employees who work 40 hours or more per week and 0. • The SBA has determined that the standard work week is 40 hours. Calculate the reduction in FTE employees in determining the maximum amount of PPP loan that will be forgiven and how to use the savings clause to prevent the reduction. For Schedule C filers, your maximum PPP loan amount equals 2. Instructions PPP forgiveness calculator - Prior version (5/22/20 - 6/17/20) - Excel Please see our important disclaimer regarding use of the calculator inside the Excel spreadsheet. The FTE equals the average number of employees who work at least 40 hours per week. You can calculate FTE counts in one of two ways: Option 1: for each employee, take the average number of hours paid each week, divide by 40, and round to the nearest tenth. 2/15/2019 6/30/2019. October 16 Update. 0 (an employee paid for 48 hours per week would 1. SBA rules, terms and guidance on the PPP have been very fluid and are subject to change. FTE Count Calculator Total FTE Count (Feb 15 - June 30, 2019 OR Jan 1 - Feb 29, 2020) Total FTE Count (for the 8 week period beginning on loan origination date) FTE Adjustment Estimated Forgivable Amount*** Potential Remaining Loan Amount *Amounts not to exceed $100k per employee on annualized basis **The debt must be secured by real or. As the leading SBA lender in our markets, Santa Cruz County Bank looks forward to assisting our community with this emergency. This long-awaited guidance provides some clarity to questions that had been raised about how PPP loan forgiveness would be treated by the SBA. A: Under previous legislation and a PPP Loans Frequently Asked Questions (PPP FAQ) issued by the Department of Treasury and Small Business Administration (SBA), the forgiveness amount for payroll costs depended on the borrower’s payroll costs over an eight-week “covered period” that begins on the date the lender makes the first disbursement of the borrower’s PPP loan. Simple Method: 1 FTE if paid for 40+ hours each week; ,5 FTE if paid for fewer than. 0, and we are supposed to round to the nearest tenth. Pay a tax professional to calculate your company’s FTE for you. The Modified Total is the payroll costs plus non-payroll costs reduced for reductions in salary and wage and then multiplied by the FTE reduction percentage. THIS FORM IS NOT REQUIRED BY THE SBA BUT IS REQUIRED BY ARBOR BANK FOR APPLICATION REVIEW PURPOSES. There are two eligible methods for calculating your FTEs during the covered and base period: Each employee that works a 40-hour work or more a week will be counted as 1. It will help you determine which forgiveness application form (F3508, F3508-EZ, or 3508S) to use and will populate that application you need. Number of hours paid per employee for each of the weeks during the Covered Period – and take the Average. Here’s an example of the PPP loan calculation in action. FTE Headcount during January 1 through February 29, 2020 = 100 FTE. Call this “Option 1. 5 for employees who work less than 40 hours per week, according to SBA materials. Just like the PPP application process, the calculation of forgiveness amount contains regulatory ambiguities sure to create confusion among borrowers and their advisors. Divide by 40 and round to the nearest tenth to get your FTE calculation. com® PPP Loan Calculator is designed to give you an estimate of the amounts involved in your PPP loan – specifically your estimated maximum loan amount and the estimated forgivable amount of your PPP Loan. 150000 100000. The SBA considered using a 30-hour standard but determined that the 40-hour standard better reflects full-time employment for most Americans. How to calculate Full Time Equivalents (FTEs): FTE = 40 hours per week per employee Any employee working over 40 hours only counts as 1 FTE There are two ways to calculate FTEs. The PPP has reopened and new loan applications may be submitted until March 31, 2021. Category: Noteworthy April 18, 2020. In order to calculate: For each employee, enter the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. FTE Reduction Exceptions. You should exclude from your calculation of average monthly payroll costs any compensation in excess of $100,000 per employee (which comes out to $15,385 per. • Calculate the number of FTE employees you had between February 15, 2019, and June 30, 2019. 0 and all other employees as a FTE of 0. As the leading SBA lender in our markets, Santa Cruz County Bank looks forward to assisting our community with this emergency. The calculations on lines 11, 12, and 13 will be used to determine whether the Borrower’s loan forgiveness amount must be reduced based on reductions in full-time equivalent employees, as required by the statute. You can achieve the FTE safe harbor if your FTEs, as of June 30, 2020, reach the levels of your payroll period that includes February 15, 2020. Simplified Forgiveness for PPP Loans of $50,000 or Less. The result of the calculation on Line 7, would be 74 percent, and Mary's entire PPP Loan would be forgiven. The SBA Paycheck Protection Program is the official name of the $367 billion in funds allocated by congress and administered by the Small Business Administration (SBA). Do this by taking the average number of hours paid per week, divide by 40, and round the total. There is a simplified method where every employee that works 40 hours normally is 1. The latest rules from the SBA provide guidance for determining payroll costs and owner compensation when calculating forgiveness under the new 24-week covered period. , an employee that earns $200/week would count as 0. SBA Form 3508S simplifies the calculation of the forgiveness amount by removing some requirements such as calculating full-time equivalent (FTE) adjustments, or salary and hourly rate adjustments. The instructions to the Schedule A worksheet inform that a borrower must, for each employee, enter the average number of hours paid per week, divide by 40 and round the total to the nearest tenth. The goal of the Small Business Administration's (SBA) Paycheck Protection Program (PPP) has been to assist owners and employees at small businesses like yours to survive the impacts of the COVID-19 pandemic. > Forgiveness Calculation: $400,000 Loan, multiplied by 95% = $380,000 (a 5% reduction in forgiveness). As guidance continues to be released, we’ll share updates. Pursuant to the SBA Form 3508 instructions, the amount of a PPP loan eligible for forgiveness will be reduced first, by reductions to employee compensation (a dollar for dollar reduction), and then, by reduction related to full time employee equivalent (“FTE”) headcount (a percentage reduction). DISCLAIMER: The discussions and conclusions are based on data and amounts provided by you. 2: Same facts for Mary as above, except she also received a $1,000 EIDL grant. On long-form SBA Form 3508, historical FTE counts are compared to a borrower’s average FTE count for the. The SBA started accepting applications for forgiveness on Monday, August 10, 2020. The hours of any employee who works less than 40 hours is calculated as a proportion of a single full-time equivalent employee and aggregated. More info provided at t. Average FTE from selected time period Table 3: Salary/Hourly Wage Reduction. Note that this differs from how the SBA will have you calculate employee headcount for PPP loan forgiveness. A Full Time Equivalent (FTE) is defined based on a work week of 40 hours versus the standard of 30 hours for some other SBA programs and the Affordable Care Act. 0 and all other employees as a FTE of 0. The new rule applies to borrowers who received loan amounts of $50,000. THE PPP LOAN FORGIVENESS CALCULATOR IS FOR PRELIMINARY ESTIMATES OR MODELING OF POTENTIAL LOAN FORGIVENESS AMOUNTS ONLY. The guidance also lists the documents borrowers must provide to support each set of calculations. 0) Designate employees who work 40 hours or more per week as full time (1. Fill out the form to get our free loan forgiveness calculator spreadsheet, including: Forgiveness Amount Calculation. 2/15/2019 6/30/2019. OR (2) Average number of FTEs from Jan. Calculate your FTEs. PPP Loans for Childcare Businesses The guidance describes payroll costs using calendar year 2019 as the reference period for payroll costs used to calculate loan amounts. You may use either the actual method or the simplified method – just be consistent. Borrowers can choose between the following reference periods: February 15 to June 30, 2019,. CARES SBA-PPP: Loan Forgiveness FTEE Comparison - provides Full Time Equivalent Employee values for the FTEE calculation options and can be used to show if there has been a reduction of FTEEs between the selected Covered Period and the applicable Lookback Period. The FTE calculation uses a point system capped at 1 per employee (based on a 40-hour week), with those working less than 40 hours being rounded to the nearest tenth. Line 10 totals the payroll costs listed on PPP Schedule A, with the amount carried to line 1 of the PPP Loan Forgiveness Calculation Form. 15, 2019, and June 30, 2019, or between Jan. Authored by Aria Eckersley. 0 FTE 32 hrs/wkemployee = 0. A borrower calculates FTE by dividing the average number of hours paid per week to each employee by 40 and rounds the total to the nearest tenth. The application clarifies that “average full-time equivalent employees” should be calculated on a weekly basis based upon a 40-hour workweek. FTE reduction –Calculate the average FTE FTE is based on a 40-hour work week Simple method:. Calculate FTE on an hourly basis for all employees by dividing the hours worked each week by 40. Simplified Forgiveness for PPP Loans of $50,000 or Less. 4 1500 19 79 1 1. See PPP Schedule A Worksheet, Table 1 on the Loan Forgiveness Application. The Borrower’s eligibility for loan forgiveness will be evaluated in accordance with the PPP regulations and guidance issued by SBA through the date of this application. SBA clarified that the FTE reductions include all employee positions, even those making more than $100K. , an employee that earns $200/week would count as 0. Average FTE: Borrowers will be required to calculate the average full-time equivalency (FTE) during the Covered Period or the Alternative Payroll Covered Period. 30 hours =. The result of the calculation on Line 7, would be 74 percent, and Mary's entire PPP Loan would be forgiven. PPP loans are backed by a 100% guaranty from the SBA. In March, the SBA rolled-out new PPP rules for self-employed businesses who file IRS Form 1040 Schedule C to calculate PPP loan amounts using gross income instead of net profit. The PPP Loan Forgiveness Application and IFR on Loan Forgiveness clarify that the reduction to loan forgiveness for. ERC The Employee Retention Credit is another CARES Act relief measure for businesses. As the Small Business Administration (SBA) gets ready to accept lenders’ Paycheck Protection Program (PPP) loan forgiveness applications on August 10, the Administration and Treasury issued guidance in the form of 10 pages of Frequently Asked Questions (“FAQ”) designed to further aid borrowers and lenders with the forgiveness process. The application (including instructions and worksheets) provides directions for calculating forgiveness requests. On May 13, 2020, the SBA issued requirements for loan increases for partnerships or seasonal employers (under the IFR). Add your full-time FTE and your part-time FTE to get your total FTE figure. government established the Paycheck Protection Program (PPP) to help small businesses with 500 employees or fewer keep their employees on payroll during the crisis. Lines 6 – 8: Non-Cash Compensation Payroll Costs During the Covered Period or. THIS FORM IS NOT REQUIRED BY THE SBA BUT IS REQUIRED BY ARBOR BANK FOR APPLICATION REVIEW PURPOSES. Latest PPP loan guidance. The original loan forgiveness application clarified the base hours of 40 hours per week to calculate an FTE. Instructions PPP forgiveness calculator - Short form 3580EZ- fillable PDF. The SBA has added a new certification form to be completed in connection with a Borrower's forgiveness application. This long-awaited guidance provides some clarity to questions that had been raised about how PPP loan forgiveness would be treated by the SBA. (This number can not exceed 1. The average number of FTEs shall be determined by calculating the average number of employees for each pay period falling within a. 5 FTE for those who worked fewer than 40 hours per week, however this could understate FTE’s if employees work less than 40 hours but more than 20 hours per week Loan Forgiveness Updates. Small Business Administration. 0 FTE 32 hrs/wkemployee = 0. These changes are outlined in greater detail below. The rule confirms that FTEs are calculated using a 40-hour week. A recent article from the Journal of Accountancy summarizes the information contained in the release. To determine if you qualify for the 3508EZ form, click here. Create a PIN. Search the loans approved by lenders and disclosed by the Small Business Administration (SBA). > Ratio of Covered Period FTE to Historic FTE = 95/100 (95%). On long-form SBA Form 3508, historical FTE counts are compared to a borrower’s average FTE count for the. The SBA started approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Oct. While we’re still waiting for specific guidance from the SBA on questions about restoring FTEs and the related safe harbor, the loan forgiveness application (link here) requires borrowers to enter their total FTE as either 12/31/20 or the date the forgiveness application is submitted, whatever is earlier. Here is the calculation you can use to determine if you’ve met this requirement: First, determine the average number of full-time equivalent employees you had during: The 8-week to 24-week period following your initial loan disbursement, (A) February 15, 2019 to June 30, 2019, (B1) January 1, 2020 to February 29, 2020. Form 3508S was originally only available to those borrowers who received $50,000 or less in PPP funding. Is there an alternate way to calculate FTEs? Yes. Basically, employees who work over 30 hours are counted as 1 FTE. Companies should contact their financial or legal advisors or the Small Business Administration for more information regarding eligibility. 5 FTE Bob works 55 hours a week, he is a 1. SBA PPP Loan Number: Average FTE: Calculate the average number of hours paid per week, divide by 40, and round to the nearest tenth. To calculate the number of full-time equivalent (FTE) employees, divide the average number of hours paid for each employee per week by 40, capping this at 1. My bank has told me to calculate my average payroll based on my 2019 payroll (Jan 1, 2019 to December 31, 2019) and not the prior 12 months (April 1, 2019 to March 31, 2020) Is that accurate?. 0 and all other employees as a FTE of 0. The SBA may review any PPP loan as it deems appropriate, including with respect to borrower eligibility, loan amount and whether the borrower used loan proceeds for the allowable uses specified in the CARES Act, and loan forgiveness amounts. The Max Loan Forgiveness Amount will be reduced by the average number of FTE Employees per month employed during the 8-week period after loan origination divided by the borrower's choice of two options: A) The average number of full time equivalent employees per month employed from February 15, 2019 through June 30, 2019. Because borrowers apply this ratio to the sum of forgivable expenses, including the four types of forgivable expenses added by the Economic Aid Act, over the covered period, the FTE ratio will not reduce forgiveness for many borrowers. https://tinyurl. However, a s of today, April 30, 2020, 11:00 am EST there has been no official guidance posted by the Treasury or SBA relating to the specific details of PPP loan forgiveness. All programs and services are offered to the public on a nondiscriminatory basis. What You Need to Know to Repay Your PPP Loan. SBA/Treasury released updated SBA PPP Forgiveness 3508 Application forms implementing the changes which The Franklin Partnership lobbied to secure in the Paycheck Protection Program Flexibility Act recently signed into law. Simplified Forgiveness for PPP Loans of $50,000 or Less. Borrowers can choose between the following reference periods: February 15 to June 30, 2019,. Small Business Administration (“SBA”). Example: 37. It’s part of the 7(a) loan program with the goal of providing low-interest loans with favorable terms to small businesses impacted by the current economic crisis caused by. • SBA Review: The Rules clarify that the SBA may review any PPP loan of any size the SBA deems appropriate (not just loans over $2 million). Let’s say you have three full-time employees and they each made $3,000 per month, meaning your PPP loan amount was $22,500 (3000 x 3 x 2. First, it is important to note that the FTE calculation for PPP forgiveness differs from previous legislation in that 40 hours is considered FTE status rather than 32 hours, like for the Affordable Care Act. Multiply it by 2. Is there a way to run report to calculate the Cares SBA-PPP mostly payroll cost? I have ADP for another business and they have a button on dashboard, can't find on QB? The guidelines for requesting forgiveness of the PPP Loan state that the report must display the last four digits of the employees social security number. On May 15, the SBA released a standardized PPP loan forgiveness application with instructions. The Guidelines can be found on the Small Business Administration and the Department of Treasury websites: www. For example, if you have 200 full-time employees and 50 part-time employees each working 10 hours per week, the SBA considers that to be a total of 250 employees for your PPP loan application. Eligible companies can borrow up to $10 million calculated based on payroll records (as described in Question 17) at a fixed interest rate of 1% for a two-year or five-year term. to the borrower’s FTE count for purposes of calculating the FTE. Small Business Administration. The result of the calculation on Line 7, would be 74 percent, and Mary's entire PPP Loan would be forgiven. Five part-time employees at. You may use either the actual method or the simplified method – just be consistent. FTE Reduction Safe Harbors 1 and 2. The Act states that for any reductions that occurred beginning on February 15, 2020, and ending 30 days after the enacting of the Cares Act (April 26, 2020) will not reduce the amount of loan forgiveness IF by June 30, 2020, the recipient of the loan has eliminated the reductions in employees or reduction in wages. Calculating FTE is an important thing that you need to make sure gets done correctly. If the FTE count is 20% lower in the forgiveness period, you would reduce payroll costs by 20%. How to Maximize Your PPP Loan Forgiveness Webinar. 75 FTE Mary works 20 hours a week, she is a 0. The calculator will also generate a projected amortization schedule based on the loan information that you. The calculator is not designed to cover every unique situation. DISCLAIMER: The discussions and conclusions are based on data and amounts provided by you. o FTE is calculated on a 40-hour work week. How to calculate First Draw Paycheck Protection Program loan amounts and what documentation to provide - by business type. How to calculate Full Time Equivalents (FTEs): FTE = 40 hours per week per employee Any employee working over 40 hours only counts as 1 FTE There are two ways to calculate FTEs. This form is. The instructions provide that FTEs are to be calculated based on a 40-hour work week, thus a business will total the number of hours paid per week, divide by 40 and round to the nearest tenth. If the Borrower has checked the box for FTE Reduction Safe Harbor 1 on PPP Schedule A, the Borrower was unable. The calculations on lines 11, 12, and 13 will be used to determine whether the Borrower’s loan forgiveness amount must be reduced based on reductions in full-time equivalent employees, as required by the statute. , an employee that earns $200/week would count as 0. But there is also new information in the form, such as the documentation requirements. You just need to spend the loan proceeds on payroll. requested by SBA may result in a determination that the Borrower was ineligible for the PPP loan or a denial of the Borrower’s loan forgiveness application. Visit our Covid-19 Response Group web page for more information. the FTE employee levels on the earlier of (i) date of the loan forgiveness application or (ii) December 31, 2020). FTE Calculation. Divide by 40 and round to the nearest tenth. 88), which would equate to 0. 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. 1 or they can all be considered as. 5(hours)/40(hours) = 0. Over Memorial Day weekend, the U. A new Interim Final Rule (IFR) from the U. Below is an example of how to calculate your FTE. Full-time equivalency (FTE) The number of full-time equivalent employees your Business has; you’ll need to determine the Business’s average FTE during the Covered Period or the Alternative Payroll Covered Period and enter it on the SBA’s Schedule A Worksheet. 15, 2019 to June 30, 2019. 00%) $20,528. CARES SBA-PPP: Loan Forgiveness FTEE Comparison - provides Full Time Equivalent Employee values for the FTEE calculation options and can be used to show if there has been a reduction of FTEEs between the selected Covered Period and the applicable Lookback Period. do NOT contact me with unsolicited services or offers. SBA adopts a transition period through Jan. Here’s an example of the PPP loan calculation in action. Average number of FTEs per month during eight-week period beginning on loan origination (B) (1) Average number of FTEs per month from Feb. The SBA started accepting applications for forgiveness on Monday, August 10, 2020. DIVIDED BY. The SBA plans to issue additional regulations and guidance for borrowers soon. Many of the rules were consistent with our expectations after reviewing the forgiveness application, which was issued one week prior, but the guidance does provide a few of the significant confirmations and several new clarifications:. 0 and all other employees as a FTE of 0. On May 15, 2020, the Small Business Administration (the “SBA”) issued the form of application (the “Application”), a copy of which can be found by clicking here, that borrowers will be required to submit when seeking loan forgiveness under the Paycheck Protection Program (“PPP”). com/yda2q2oj - In this PPP Loan Forgiveness Application, how to calculate FTE's video, I incorporate the latest guidance from the SBA in thei. On March 3, 2021, the SBA released guidance that provides Schedule C filers, such as sole proprietors, independent contractors, and self-employed individuals, the option to use gross income or net profit when calculating their PPP loan amount, which may result in a larger loan amount. Determine if you can use the SBA 3508S Loan Forgiveness Application or SBA EZ Loan Forgiveness Application. A full-time equivalent (FTE) employee is defined as one who works 40 hours or more on average each week. Authored by: Pamela M. The calculator is not designed to cover every unique situation. Rather, it uses, at the election of the applicant, either (1) a 40-hour FTE or (2) treatment of every employee working fewer than 40 hours as a. 16 hours a week would be 0. Page 3 Step 1. Add your full-time FTE and your part-time FTE to get your total FTE figure. For loan amounts less than $150,000, you can use the new Form 3508S. SBA PPP Loans – Calculations and Considerations for Maximizing Forgiveness Cooley Alert April 30, 2020 Loan forgiveness is a key feature of the Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA) pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The SBA may issue additional forgiveness-related guidance. Borrower must have reduced FTEs, salaries/wages between February 15 and April 26, 2020, and must have eliminated the reduction no later than December 31, 2020. If you attempt to rehire a laid off employee for the same salary/wages and same number of hours, but the employee. The Small Business Administration (SBA) has released its much anticipated Paycheck Protection Program (PPP) loan forgiveness application, which may be found here. Course Description/Agenda. All the top law firms and accountants we googled were making educated guesses / guidance that SBA would use what is already defined somewhere in SBA language as FTE= 30+ hours/w. Calculating headcount (FTE): Borrowers can choose to either: Calculate FTE on an hourly basis for all employees by dividing the hours worked each week by 40. Green cells will automatically populate. Is there a way to run report to calculate the Cares SBA-PPP mostly payroll cost? I have ADP for another business and they have a button on dashboard, can't find on QB? The guidelines for requesting forgiveness of the PPP Loan state that the report must display the last four digits of the employees social security number. › For each employee, calculate the average number of hours worked per week during the respective period & divide by 40 & round to the nearest tenth with a maximum of one. THE CALCULATOR MAY NOT REFLECT CURRENT INTERPRETATIONS OF THE SBA AND TREASURY DEPT. You need to provide support for payroll and non-payroll costs, and full-time. For each employee, enter the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. However, the PPP does not count the following expenses when calculating the total PPP reimbursement amount: Any compensation over $100,000 per employee Taxes imposed under chapters 21 (payroll taxes), 22 (railroad taxes and retirement benefits), and 24 (income taxes withheld on wages) of the Internal Revenue Code (IRC). Treasury and the U. Calculate the reduction in FTE employees in determining the maximum amount of PPP loan that will be forgiven and how to use the savings clause to prevent the reduction. The SBA started approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Oct. This calculation is performed in both Table 1 (annual salaries of $100K or less) and Table 2 (annual salaries over $100K) and is essentially a headcount. › For each employee, calculate the average number of hours worked per week during the respective period & divide by 40 & round to the nearest tenth with a maximum of one. Category: Noteworthy April 18, 2020. The SBA and Treasury released Form 3508 on May 15, 2020. The three versions of the form include a regular Form 3508, Form 3508EZ, and 3508S. More info provided at t. com/yda2q2oj - In this PPP Loan Forgiveness Application, how to calculate FTE's video, I incorporate the latest guidance from the SBA in thei. There are pre- and post-loan calculations of payroll costs and total number of employees (FTEs) used to determine how much of your loan is forgiven. Forgiveness Reduction Factors & Salary Reduction Calculation FTE Reduction Factor Baseline Period Calculation Approach Exclusions Effect of Layoffs / Furloughs Safe Harbor for Forgiveness Reduction Factors Safe Harbor for Demonstrating Need for the Loan. Under SBA regulations, certain affiliation rules are considered when calculating the number of employees of a business to determine whether it meets the SBA size standards for a small business. Small Business Administration (SBA) released the application and instructions for loan forgiveness under the Paycheck Protection Program (PPP). An FTE will be computed by dividing the number of hours for the week divided by 40, not to exceed 1. FTEs are calculated by average number of hours paid per week per employee / 40, rounded to nearest tenth. On August 4th, the Small Business Administration (SBA) released its latest round of FAQs on Paycheck Protection Program (PPP) Loan Forgiveness. FTE stands for full-time equivalent; it measures how many full-time employees you have, along with the number of part-time employees that combine to work 40 hours per week. 1 1200 19 63 1 1. For example, a part-time employee who works an average of 30 hours per week would count as a. Explain the entries on the PPP Loan Form 3508 and 3508EZ. The Borrower is exempt from such a reduction if either of the FTE Reduction Safe Harbors applies. > FTE Headcount during Covered Period = 95 FTE. PPP App Main PPP Forgiveness Calculator DISCLAIMER: This Calculator is intended for general education and/or information purposes only and does not replace specific, independent professional advice. The interim final rule tracks the application in providing that employees who work 40 hours or more each week are limited to an FTE quotient of 1. 0 FTE by December 31, 2020 would mean that the Coastal Company would have to take the salary based loan forgiveness reduction unless her salary was also increased above the 25% threshold. To use these forms. PPP loans will be administered through the U. The most important and highly debated provision of this Act is the loans under the Paycheck Protection Program (PPP), which put forth $349 billion into a Small Business Administration (SBA) loan program for small businesses to obtain and to be administered by the banks. Therefore, seasonal, part-time, and full-time employees all count as an “employee” no matter the number of hours worked. Within the PPP Schedule A Worksheet, you’ll calculate the “Average FTE” of all staff paid during the covered period. The long overdue PPP Forgiveness Application was released by the SBA on May 15, 2020, providing some much needed clarification for small businesses in calculating their potential forgiveness amount. The calculation for the potential FTE Reduction Safe Harbor 2 is in “Loan Forgiveness Application Revised June 16, 2020”. PPP is a forgivable loan offered that can give you up to 250% of your monthly payroll costs during a specified period. SBA clarified that the FTE reductions include all employee positions, even those making more than $100K. The employee count is per individual employee and does not take into account full-time equivalent (FTE) calculations. Line 10 totals the payroll costs listed on PPP Schedule A, with the amount carried to line 1 of the PPP Loan Forgiveness Calculation Form. Full-time equivalent (FTE) calculation: The application indicates that 40 hours per week will be considered full-time for purposes of calculating FTEs. For all other employers, whose FTE headcount during the 8-Week Period is less than the FTE headcount during the Prior Period Headcount, then the forgivable portion of your PPP loan is reduced by your FTE headcount reduction percentage. well as total payroll costs. Per the SBA PPP loan application rules, any amount paid to an employee over $100,000 (on an annualized basis) should be deducted when calculating the average monthly payroll figure. Safe Harbor exemption from reduction in FTE - Both conditions must be met: 1. The pay period that includes January 1 is from 12/27/2019 to 1/10/2020. Is there an alternate way to calculate FTEs? Yes. More info provided at t. Notably, the rule confirms the maximum amount of forgivable payroll costs per employee as $46,154 and the maximum owner compensation as $20,833 for a 24-week covered period. When calculating the number of FTE employees, borrowers seeking forgiveness should document their average number of FTE employees. SBA released 124 pages of new guidance (January 7, 2021) for PPP First and Second Draw, and just recently released all of the updated application forms. How much PPP funding can I receive? The maximum amount you can receive from your SBA-approved lender is your monthly average payroll cost in 2019, 2020, or the one year period before the application. Forgiveness is reduced if you reduce total average full-time equivalent (FTE) employees Calculate FTEs based on 40-hour work week Rounding Option: Divide each employee’s hrs/wkby 40 & round to nearest 10th Examples: 40 hrs/wkemployee = 1. Average Full-Time Equivalent Employees (FTEs) are determined by calculating the average number of full-time equivalent employees for each pay period falling within a month. Average FTE: Borrowers will be required to calculate the average full-time equivalency (FTE) during the Covered Period or the Alternative Payroll Covered Period. PPP loans, or Paycheck Protection Program loans, are potentially-forgivable small business loans provided by the US Small Business Administration (SBA) from a pool of $350 billion. How to calculate FTE: Average number of hours paid during the covered period (or alternative period) and divide by 40 before rounding to the nearest 10th (ex. Determine if you can use the SBA 3508S Loan Forgiveness Application or SBA EZ Loan Forgiveness Application. https://tinyurl. new 100 percent guaranteed temporary loan program administered by the Small Business Administration (SBA) called the PPP. i) Number of FTEs as of February 15, 2020 - Use the payroll run that encompasses this date in order to report FTE levels. Loan Forgiveness Calculator Paycheck Protection Program (PPP) under the CARES Act How to use this calculator: NOTES: The SBA forgiveness application is online here. FTE Reduction Safe Harbor and Exceptions: A. It defines an FTE employee as an employee who works 40 hours or more. Farmers & Merchants Bank cautions you that the Guidelines are evolving. The calculator is not designed to cover every unique situation. Borrowers should instead calculate the true average FTEs and compare to the actual FTE calculation. Small Business Administration (SBA) issued the interim final rule on Paycheck Protection Program (PPP) loan forgiveness. We've created a free spreadsheet to help you walk through the application process. Forgiveness Calculation: $400,000 Loan, multiplied by 95% = $380,000 (a 5% reduction in forgiveness). The maximum for each employee is capped at 1. The Small Business Administration (SBA) released the form of application allowing borrowers in the Paycheck Protection Program Loan (PPP) to apply for loan forgiveness. The new loan forgiveness application is complicated and leaves borrowers with many unanswered questions; however, it did provide clarity on how borrowers will need to calculate the number of full-time equivalent employees. The legislation now goes to President Biden, who is expected to sign it. You should exclude from your calculation of average monthly payroll costs any compensation in excess of $100,000 per employee (which comes out to $15,385 per. 5 total FTEs, a slightly better result. Loan proceeds would need to cover payroll for a different period or other qualifying costs. Multiply it by 2. The revised rule allowing practice owners to include up to $20,833 of their compensation towards the PPP loan forgiveness calculation extends to S-Corp owners too. Do this by taking the average number of hours paid per week, divide by 40, and round the total. Eligible Payroll and Non-Payroll Costs. Loan Forgiveness Calculation Form – In order to complete this form, completion of PPP Schedule A is required. Calculate your average monthly payroll cost and multiply that number by 2. Over Memorial Day weekend, the U. On January 19, 2021, the SBA revised the 3 different versions of the PPP Loan Forgiveness application. Companies should contact their financial or legal advisors or the Small Business Administration for more information regarding eligibility. Presumably use the new FTE calculation for this disclosure. The PPP forgiveness application definitions and tables (assuming you’re not using the EZ application) show you how to calculate FTE for your entire staff. This calculator is based on SBA Form 3508 which contains steps for borrowers to adjust their PPP loan forgiveness if certain FTE or Salary/Wage requirements (further defined in the applicable sections of this worksheet) are not met. The Borrower’s eligibility for loan forgiveness will be evaluated in accordance with the PPP regulations and guidance issued by SBA through the date of this application. The Small Business Administration (SBA) released a slew of PPP guidance and updates yesterday, including the new simplified, one-page application for borrowers of loans for $150,000 or less. The CARES Act requires PPP loan recipients seeking forgiveness to submit an application to their lenders including (1) documentation verifying the number of full-time equivalent employees on payroll and pay rates during the applicable periods (i. The PPP loan forgiveness formula makes a small business eligible for total forgiveness. Around or after 10:00 pm on the evening of Friday, May 22, 2020, the Small Business Administration (“SBA”) and the Treasury Department issued an Interim Final Rule on PPP Loan Forgiveness (the “Forgiveness IFR”). Calculate the reduction in FTE employees in determining the maximum amount of PPP loan that will be forgiven and how to use the savings clause to prevent the reduction. Under the stimulus package, the PPP is available to small and medium businesses with less than 500 employees via the U. 1, 2020 to Feb 29, 2020. Update - June 19, 2020: On June 16, the SBA released two new forms of forgiveness application, which we discuss in more detail in our alert on June 18, 2020. Call this “Option 2. The first is your average FTE during a chosen reference period, which serves as your pre-loan benchmark for full-time equivalent figures. Average Full-Time Equivalent Employees (FTEs) are determined by calculating the average number of full-time equivalent employees for each pay period falling within a month. 0 for employees who work 40 hours or more, and 0. Calculate the initial forgiveness amount by: Loan Amount x (Post-PPP FTE / Pre-PPP FTE) For example, a business receiving $100,000 in PPP Funds who reduces staff from 10 FTE (in the Pre-PPP period) down to 8 FTE (in the Post-PPP period) — the calculation would then be $100,000 x (8 / 10) or $80,000 in potential loan forgiveness. The maximum for each employee is capped at 1. SBA PPP Loan Forgiveness Calculator. Eligible Payroll and Non-Payroll Costs. DIVIDED BY. SBA Form 3508 is the document PPP loan borrowers must complete to request loan forgiveness. Full-time equivalency (FTE) The number of full-time equivalent employees your Business has; you’ll need to determine the Business’s average FTE during the Covered Period or the Alternative Payroll Covered Period and enter it on the SBA’s Schedule A Worksheet. Borrowers calculate FTEs by entering for each employee the average number of hours paid per week during the Covered Period/Alternative Payroll Covered Period, dividing by 40, and rounding the total to the nearest tenth. An SBA-backed loan that helps businesses keep their workforce employed during the COVID-19 crisis. Companies should contact their financial or legal advisors or the Small Business Administration for more information regarding eligibility. and SBA Form 3508EZ. A: Instead of calculating an FTE fraction (not to exceed 1. The SBA has rolled out updated PPP loan forgiveness applications and guidance to incorporate changes from the Economic Aid Act. The Small Business Administration (SBA), in consultation with the Department of the Treasury, intends to provide timely additional guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES. CALCULATING FTEs: THE MATH. Average FTE Data Entry Required. On 10/08/2020 - SBA announced 3508S FORM - Simpler loan forgiveness application which may be used for Paycheck Protection Program (PPP) loans of $50,000 or less. Some of the problems and pitfalls with PPP forgiveness are described below. Sum across all employees and enter: Step 2. In addition, expenses you pay with your PPP loan funds are deductible as expenses. The three versions of the form include a regular Form 3508, Form 3508EZ, and 3508S. Notably, the rule confirms the maximum amount of forgivable payroll costs per employee as $46,154 and the maximum owner compensation as $20,833 for a 24-week covered period. Payroll Calculation •Determine your number of Full-Time Equivalent (FTE) Employees •Find a local lender that is approved to make these loans and schedule a phone consult to discuss the process and what assistance they can provide EIDL Loan: •Seek out assistance from an SBA District Office or local SBA Development Center on. The maximum value for each employee is 1. How does an international business count employees for PPP loan eligibility? not a full-time-equivalent (FTE) calculation. Eligible Payroll Costs – Borrowers are generally eligible for forgiveness for payroll costs paid and payroll costs incurred during the eight-week (56-day) covered period or alternative payroll covered period. To use these forms. How the SBA Loan Payment Calculator Works. The Application defines FTE. Unfortunately, there are too many moving parts related to FTEs and reduction in salary or hourly rate to be able to provide a clear answer. Due to caps imposed by Treasury/SBA, the loan amount for such an applicant with no other employees cannot exceed $20,833 (i. For purposes of the PPP, “full-. In March, the SBA rolled-out new PPP rules for self-employed businesses who file IRS Form 1040 Schedule C to calculate PPP loan amounts using gross income instead of net profit. Our PPP Calculator, a powerful but easy-to-use Excel spreadsheet, accounts for every expense as you allocate your PPP funds, making it simple to determine your forgiveness amount, and report to your own financial institution. If the entry for step 4 is greater than or equal to step 2, enter 1. The SBA and Treasury released Form 3508 on May 15, 2020. FTE: - Ave FTE between 2/15/19 and 6/30/19 - Ave FTE between 1/1/20 and 2/29/20 - Seasonal employer: the above or any consecutive 12- week period between 5/1/19 and 9/15/19. And these gotchas may limit or eliminate forgiveness. If line 2 is less than line 1, then dividend line 2 by line 1. Learn how to calculate your headcount reductions so you can determine if they affect your PPP loan forgiveness amount. This is a simpler calculation if you don’t have an FTE report readily available. > FTE Headcount during January 1 through February 29, 2020 = 100 FTE. The SBA Paycheck Protection Program is the official name of the $367 billion in funds allocated by congress and administered by the Small Business Administration (SBA). The formula for testing workforce reduction is as follows: Lesser of: (1) PPP loan principal; or (2) Eight weeks of Eligible Costs. June 30 -PPP Program ends for new loans July 7- Martha’s Vineyard Bank PPP Forgiveness Application live Loan Origination Date (SBA Acceptance) +24 weeks use of funds Until December 31, 2020 to file for forgiveness. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA. The "Borrower's Disclosure of Certain Controlling Interests" requires Borrowers to disclose whether certain Government Officials, deemed "Covered Persons" owned a controlling (20%) interest in the Borrower at the time the Borrower applied for its PPP Loan. 5 total FTEs, a slightly better result. Calculate your FTEs. not eligible for forgiveness (in whole or in part) the PPP loan is no longer deferred and you must begin paying principal and interest. The Forgiveness Application and SBA rules outline how to calculate these forgiveness penalties and provide more detail on applicable safe harbors and exemptions. The CARES Act requires PPP loan recipients seeking forgiveness to submit an application to their lenders including (1) documentation verifying the number of full-time equivalent employees on payroll and pay rates during the applicable periods (i. The borrower’s forgiveness application will list $400 as the salary/hourly wage reduction for that employee ($50/week multiplied by eight weeks). Explain the entries on the PPP Loan Form 3508 and 3508EZ. Over Memorial Day weekend, the U. Divide by 40 and round to the nearest tenth to get your FTE calculation. Average FTE Calculation In determining your full-time equivalent employees before the pandemic and during the eight-week period, the SBA has given two alternative methods of calculation. The estimated conclusions are based on our interpretation of the CARES Act and are subject to change upon issuance of final regulations from the US Treasury and the SBA. If the FTE count is 20% lower in the forgiveness period, you would reduce payroll costs by 20%. Under the stimulus package, the PPP is available to small and medium businesses with less than 500 employees via the U. See our Advertiser Disclosure for more information on how we try to connect you with a Paycheck Protection Program (PPP) lender or other small business lenders. > Forgiveness Calculation: $400,000 Loan, multiplied by 95% = $380,000 (a 5% reduction in forgiveness). • SBA Review: The Rules clarify that the SBA may review any PPP loan of any size the SBA deems appropriate (not just loans over $2 million). CARES SBA-PPP: Loan Forgiveness FTEE Comparison - provides Full Time Equivalent Employee values for the FTEE calculation options and can be used to show if there has been a reduction of FTEEs between the selected Covered Period and the applicable Lookback Period. Disclaimer: The information provided by the SBA. FTE Count Calculator Total FTE Count (Feb 15 - June 30, 2019 OR Jan 1 - Feb 29, 2020) Total FTE Count (for the 8 week period beginning on loan origination date) FTE Adjustment Estimated Forgivable Amount*** Potential Remaining Loan Amount *Amounts not to exceed $100k per employee on annualized basis **The debt must be secured by real or. You can calculate FTE counts in one of two ways: Option 1: for each employee, take the average number of hours paid each week, divide by 40, and round to the nearest tenth. 00%) Your Application Status O Under Review (D Need Info. The PPP forgiveness calculation is coming! The most complex calculations involve determining the full-time equivalent (FTE) count during the loan’s covered period and comparing it to the taxpayer’s choice of 2 different base periods. The PPP forgiveness application definitions and tables (assuming you’re not using the EZ application) show you how to calculate FTE for your entire staff. Do this by taking the average number of hours paid per week, divide by 40, and round the total. FTE ACTUAL COMPARED TO BASE PERIOD Percentage of Payroll Allowed for Maximum Loan Forgiveness STEP 4 FTE SAFE HARBOR Average FTEs for Payroll Period that includes 2/15/20 Meet Safe Harbor Requirements? Upon further guidance from the SBA, these FTE calculation rules might change. 0 on line 13 of PPP Schedule A; the FTE Reduction Safe. The details of that reduction are discussed later in this article. Added to the ten employees that work 40 hours or more, you arrive at a total of twelve FTEs.