Quick Answer: Can I Pay My Employees More With PPP?

What is FTE loan PPP?

The Small Business Administration (SBA) defines a Full-Time Equivalent employee [FTE] as “an employee who works 40 hours or more, on average, each week.” The hours of employees who work less than 40 hours are calculated as proportions of a single FTE employee and aggregated..

When should I apply for PPP 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.

Can bonuses be included in PPP 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.

How long does PPP forgiveness take?

In general, the lender has 60 days from receipt of a complete loan forgiveness application to issue a decision to the SBA, and the SBA, subject to its review, will remit funds within 90 days after the lender issues its decision to the SBA. The lender will notify the borrower of the loan forgiveness amount.

Can employees choose unemployment over PPP?

SBA: Workers choosing to remain on unemployment won’t affect PPP loan forgiveness. … But the U.S. Small Business Administration said over the weekend that employers who make a “good faith” effort to rehire staffers will not see their forgiveness reduced if they’re unable to do so.

How does PPP forgiveness work?

PPP Loan Forgiveness. Borrowers will have their loans forgiven if they use the money for designated expenses. Participants are eligible for loan forgiveness for the amounts spent on authorized expenses over 24 weeks after loan disbursement (or eight weeks if they choose). Total payments for payroll may be forgivable.

When can I apply for PPP forgiveness?

If the loan was funded after June 5, 2020, the borrower must use a 24-week covered period. Whether it’s eight weeks or 24 weeks, borrowers may apply for forgiveness before the end of the covered period.

Can PPP be used for hazard pay?

The IFR confirmed that PPP funds may be used to pay employee bonuses and hazard pay during the Covered (or Alternative Covered) Period and those amounts are eligible for forgiveness.

Can you pay employees more with PPP loan?

Yes, you can hire additional employees during the 8-week covered period and any eligible payroll costs associated with them are eligible for forgiveness. 12) Must PPP loan proceeds be spent within the 8 weeks after receiving the funds?

Do you have to pay all employees with PPP?

Yes, possibly. Your PPP loan amount is determined by your 2019 payroll numbers (or net profit numbers if you’re self-employed). So if you had three employees in 2019 who made $3,000 each month, you will need to keep those three employees on payroll at the same salary.

What qualifies for PPP forgiveness?

Forgiveness for self-employed individuals You are eligible to claim 2.5 months’ worth of your 2019 net profit to replace pay. If you didn’t have any other payroll expenses factoring into your PPP loan amount, this means that your entire PPP loan could be forgiven for the 24-week period.

What does PPP mean for employees?

Paycheck Protection ProgramThe Paycheck Protection Program (PPP) This offers federal guaranteed loans to businesses with fewer than 500 employees to cover payroll and other essential costs.

Can PPP loans return?

You are welcome to return the funds in full, as long as it’s before May 18. However, you will likely not be allowed to apply for another PPP loan—each business is only allowed to receive one PPP loan. You can speak to your lender to start the process of returning your loan.

How do PPP loans work for employees?

Loan Details The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. PPP loans have an interest rate of 1%.

Has anyone received PPP forgiveness?

Agency has yet to forgive any Paycheck Protection Program loans and has been slow to prevent theft, watchdogs tell Congress. … SBA announced last week that it had received only 96,000 loan applications — less than 2 percent of the total number of loans — and has not processed any applications so far.