Quick Answer: Can I Give My Employees A Raise Under PPP?

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” ….

What does the PPP mean for employees?

federal Paycheck Protection ProgramThe federal Paycheck Protection Program offers forgivable loans intended to help employers cover up to eight weeks of payroll expenses and other costs. Borrowers that have laid people off can obtain forgiveness, but they’ll need to maintain headcount, which means rehiring those individuals.

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.

Can bonuses be included in PPP loan forgiveness?

As a result, employee bonuses and hazard pay are eligible for loan forgiveness as payroll costs, as long as the employee’s total compensation does not exceed $100,000 on an annualized basis. These payments constitute a supplement to salary or wages and, therefore, are a similar form of compensation.

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.

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.

What happens if I get PPP and unemployment?

His takeaway: You can accept a PPP grant, suspend your Unemployment for eight weeks and then go back on. Or you can accept PPP money and use it as a grant to pay your business expenses, then pay it back, and still collect Unemployment. … “If you treat the PPP as a loan, then it’s legitimate to accept Unemployment.

Who qualifies for PPP forgiveness?

You must maintain at least 75% of total salary. If the employee’s pay over the 24 weeks is less than 75% of the pay they received during the most recent quarter in which they were employed, the eligible amount for forgiveness will be reduced by the difference between their current pay and 75% of the original pay.

What payroll costs are forgiven under PPP?

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.

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.

How do I apply for PPP loan forgiveness?

To apply for forgiveness of your Paycheck Protection Program (PPP) loan, you (the Borrower) must complete this application as directed in these instructions, and submit it to your Lender (or the Lender that is servicing your loan). Borrowers may also complete this application electronically through their Lender.

Can employees get PPP and unemployment?

While self-employed workers and anyone who gets paid using IRS form 1099 are eligible for both PPP loans and unemployment benefits, you can’t receive both. If you apply for unemployment and the PPP program and receive a PPP loan, you must then withdraw from unemployment.

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.