PPP Loan Forgiveness Estimator

Get an estimate of how much of your Paycheck Protection Program loan will be forgiven.

Factors That Affect PPP Loan Forgiveness

PPP loan forgiveness is determined through calculations with several factors, each of which is outlined below.

PPP Loan Amount

The PPP loan amount is the total amount awarded to a borrower for their PPP loan. That amount was calculated based on 2.5 times a borrower’s average monthly payroll cost during the covered period.

Payroll Costs

Payroll costs for the loan forgiveness calculations are the portion of the PPP loan amount used to cover payroll costs during the 24-week covered period following disbursement of the loan.

Mortgage Interest, Rent/Lease, and Utility Payments

Following SBA guidance on allowed uses of the loan, no more than 40% of the PPP loan amount can be used toward mortgage interest, rent/lease, and utility costs. Payments toward mortgage interest, rent or lease payments, and utility payments incurred during the 24-week covered period can be included in PPP loan forgiveness in these fields. Payments toward a mortgage principal are ineligible and should not be included.

How Is the Loan Forgiveness Amount Decided?

Your PPP loan forgiveness amount will be awarded based on one of 3 calculations: the modified total, the payroll cost 60% requirement, or the total PPP loan amount. According to SBA guidance, the least of these 3 calculations should be used as the loan forgiveness amount.

When the Modified Total Is Used as the PPP Forgiveness Amount

The modified total will be used as a borrower’s PPP loan forgiveness amount:

  • If a borrower has reduced the number of full-time equivalent employees and fails to rehire them before the deadline or qualify for an allowed exemption. Full details on exemptions can be found on our Loan Forgiveness page.
  • If a borrower has reduced salary and hourly wages by at least 25%.

When the 60% Payroll Requirement Is Used as the PPP Forgiveness Amount

For the 60% payroll requirement to be used as the loan forgiveness amount, a borrower must meet the following requirements:

  • The average number of full-time equivalent employees during the covered period matches the average number of full-time equivalent during the reference period. For full details on requirements for rehiring and potential exemptions if a borrower is unable to rehire employees, please refer to our Loan Forgiveness page. 
  • At least 60% of the loan amount was used on payroll costs during the covered period.

When the PPP Loan Amount Is Used as the PPP Forgiveness Amount

Based on guidance from the SBA, it is anticipated that full forgiveness of the PPP loan amount will be uncommon. If a borrower chose to take out a smaller loan amount that would only cover their payroll costs during the covered period and not mortgage interest, rent/lease payments, or utility payments, the borrower may be eligible for forgiveness of the total PPP loan amount.

PPP Loan Forgiveness FAQs

Let’s review some common questions about terminology and requirements regarding PPP loan forgiveness.

What does the ‘covered period’ mean?

Due to an extension under the Paycheck Protection Program Flexibility Act (PPFA), the covered period refers to the 24-week period following disbursement of the loan or December 31, 2020, whichever date comes first.

Borrowers who received a loan prior to June 5, 2020, may opt to use the “alternative covered period,” meaning the borrower can opt to use an 8-week period instead of the 24-week period. This 8-week period can begin either on the date the borrower receives the loan or on the first day of the pay period immediately following the receipt of the PPP loan.

What does ‘full-time equivalent employees’ mean?

Full-time equivalent employees (FTEs) is a calculation based on the hours worked for both full-time and part-time employees over a workweek. If an employer has a 40-hour workweek, an employee that works 40 hours during that week is 1.0 full-time equivalent employee.

There are 2 methods for calculating an individual who has worked less than full-time:

  • An employer can take the number of average hours worked by an employee during the covered period and divide the number of hours by 40. For example, an employee who works 30 hours per week during the covered period would equal .75. An employee who worked 20 hours would be calculated as 0.5, and an employee who works 10 hours would be calculated as 0.25.
  • An employer can simply assign each employee who works less than full time as a .5,

What is the reference period?

The reference period refers to the time period used to calculate a borrower’s PPP loan amount. The reference period is a period prior to receipt of the PPP loan used as a baseline in calculating the number of FTE a business may have.

The majority of businesses have 2 options; February 15, 2019 – June 30, 2019 OR January and February 2020. If you have a seasonal business, you get a third option—any consecutive 12-week period from May 1, 2019 – September 15, 2019.

What is the 60% payroll requirement?

60% of the PPP loan amount must be used toward payroll costs. No more than 40% of the forgiven amount can be used for non-payroll costs like mortgage interest, rent, or utilities. This requirement was originally 75% and was reduced to 60% under the PPPFA.

Will the full amount of the loan be forgiven?

For most borrowers, a portion of their PPP loan amount will be forgiven. In some cases, the full PPP loan amount may be forgiven. Borrowers should not anticipate full forgiveness of the PPP loan amount.

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