1. Alternative Payroll Covered Period
The application allows for an "alternative payroll covered period." You can start your eight-week period on the first day of your first pay period following your PPP loan funding date. For example, if you received your PPP loan proceeds on April 20, and the first day of your first pay period following this date is on April 26, your alternative payroll covered period would be April 26 - June 20. This will make eligible payroll costs computation easier from an administrative standpoint.
2. Payroll cost forgiveness eligibility
Payroll costs that are incurred but not paid during the covered period, or alternative payroll covered period, are eligible for forgiveness if they are paid on or before the next payroll date.This effectively changes the calculation to the accrual basis and will allow for a full 8 weeks of payroll to be included in the forgiveness calculation.
3. Included eligible non-payroll costs
Eligible non-payroll costs, such as interest on secured debt, rent, and utilities, includes amounts paid during the covered period, or those incurred during the covered period and paid on or before the next regular billing date. This effectively changes this to accrual basis as well, and will allow for a full 8 weeks of eligible non-payroll costs to be included in the forgiveness calculation.
4. Full-time equivalent computation
FTEs can be computed by dividing the average number of weekly hours paid per week by 40, and rounding to the nearest tenth, with a max of 1.0, or by using a simplified method whereby each employee who works 40 hours or more per week counts as one FTE, and employees who work fewer hours count as half an FTE.
5. Employment changes
If you offered to rehire any employees and were rejected, fired an employee for cause, or had an employee voluntarily resign or request an hours reduction, these will not reduce your loan forgiveness amount.
For additional details, please review the application form. If you have any questions, don't hesitate to reach out to us.
