Paycheck Protection Program (PPP) Loan Forgiveness Estimator Tool

If your business has received a Small Business Administration loan through the Paycheck Protection Program (PPP), you might be wondering how much of that loan may be forgivable by the federal government. Many factors determine loan forgiveness, and government guidance is evolving and may change or clarify certain calculations. For the latest information on loan forgiveness, visit our PPP Guide which includes a checklist, FAQs and examples. To estimate how much of your loan may be forgiven, use the tool below:

Enter the loan amount you received
Maxium amount $10,000,000

Enter the amount of the PPP loan you received from your lender.

Enter your payroll costs for the covered period

Enter your payroll costs for the 8-week period immediately following disbursement of the loan (i.e., the Covered Period). If you pay your employees on a biweekly or more frequent schedule, you may choose to begin the period on the first day of the first pay period following disbursement of the loan (“Alternative Payroll Covered Period”) for qualifying payroll costs only. The latest guidance from the government indicates that borrowers are eligible for forgiveness for payroll costs paid and payroll costs incurred, but not yet paid, during the 8-week Covered Period or Alternative Payroll Covered Period. Payroll costs incurred but not paid within the Covered Period or Alternative Payroll Covered Period must be paid by the next regular payroll date to be counted for forgiveness purposes.

Under the PPP, “payroll costs” generally include:

  • Employee gross pay including salary, wages, commissions, tips, and severance pay. For each employee, gross pay is capped at $15,385 (which represents the 8-week value of the annualized $100,000 cap).
  • All employer state and local taxes paid on employee gross pay, such as state unemployment insurance and employer-paid state disability insurance (in applicable states).
  • Employer healthcare benefits, including insurance premiums.
  • Employer-paid retirement benefits, including defined-benefit or defined-contribution retirement plans and employer 401(k) contributions.

The definition of payroll costs excludes employer federal taxes, workers compensation premiums, payments to independent contractors, and payments to employees for leave covered under the Families First Coronavirus Response Act.

Note: At least 75% of the forgiveness amount must be for payroll costs.

Enter your eligible mortgage interest, rent and utility payments during the covered period

The PPP allows up to 25% of the forgiveness amount to be used to pay any of the following costs during the covered period:

  • Interest on mortgage obligations incurred before February 15, 2020;
  • Rent under lease agreements in force before February 15, 2020; and
  • Utilities for which service began before February 15, 2020
Enter sum of all employees’ decrease in wages greater than 25% during covered period*

Repayment of part of the loan may be required to the extent that any employee’s earnings are reduced by more than 25% during the Covered Period or your Alternative Payroll Covered Period, compared to the period of January 1 through March 31, 2020. For this calculation, exclude any employee who received, during any single pay period in 2019, wages or salary at an annualized rate over $100,000. Then, for each employee, compare the average salary for salaried employees or average hourly rate for hourly employees during the most recent quarter to the Covered Period or Alternative Payroll Covered Period by using the following calculation:

  1. Calculate the average annual salary for salaried employees or average hourly wage for hourly employees during the Covered Period or your Alternative Payroll Covered Period
  2. Perform the same calculation for the period of January 1, 2020 through March 31, 2020 (“Lookback Period”).
  3. Divide the Covered Period value by the Lookback Period value. If the result is 0.75 or greater, this employee will not affect your forgiveness amount and can be excluded. If the result is less than 0.75, multiply the Lookback Period value by 0.75 and subtract the Covered Period value.
  4. For hourly employees, take this result and multiply it by the average number of hours the employee worked per week during the Lookback Period and multiply by 8. For salaried employees, multiply the result from Part 3 by 8 and divide by 52.
  5. Finally, total all results for all employees whose salary or hourly wages decreased by greater than 25%.

Note: If there were no reductions in excess of 25%, enter zero for this field. Also note that the government may issue additional guidance that could impact this calculation.

Enter average Full-Time Equivalent employees (FTEEs) during the covered period

Enter the average number of FTEEs during the Covered Period or Alternative Payroll Covered Period. For each employee, calculate the average number of hours paid per week during the applicable period, divide by 40, and round to the nearest tenth. The maximum for each employee is 1.0. Enter the sum of all employees. You may also choose to count 1.0 for employees working 40 or more hours per week and 0.5 for those working less than 40 hours per week. The government has not yet issued guidance as to employees for whom you do not track hours worked. For now, you can provide an estimate for these employees.

Enter your average FTEEs per month for comparison period*

Enter your average number of FTEEs during the period from February 15 through June 30, 2019, or January 1 through February 29, 2020, at your option. Use the same methodology as you did above. Choosing the date range with the lower FTEE value will help maximize your forgiveness amount. If the number of your FTEEs is lower during the Covered Period or Alternative Payroll Covered Period than during both of these two time periods, the amount of loan forgiveness may be reduced proportionately. For more information about reductions in staffing levels, please see our Loan Forgiveness Checklist here.

Estimated amount of your PPP loan that may be forgiven**:
$0
Estimated amount of your PPP loan that may not be forgiven***:
$0

Notes on your results:

  • Your forgiveness amount has been decreased because your payroll costs must be at least 75% of the forgiveness amount.
  • Your forgiveness amount has been decreased because you decreased wages of one or more employees by more than 25% during the covered period.
  • Your forgiveness amount has been decreased because you decreased FTEs during the covered period.

*If you have reductions in FTEEs or wage levels during the covered period, you can consider rehiring employees or restoring wages by June 30, 2020, to help maximize loan forgiveness. If any reduction of FTEEs occurred from February 15 to April 26, 2020, and you fully restore the FTEE level by June 30, 2020 to equal or higher than FTEEs as of February 15, 2020, your loan forgiveness will not be reduced by any FTEE reduction during the covered period. Similarly, if any wage reductions occurred for a given employee from February 15 to April 26, 2020, and you fully restore that employee’s wage level by June 30, 2020 to equal or higher than the wage level as of February 15, 2020, then any wage level reduction during the covered period will not count in reducing your loan forgiveness.

These restorations are not taken into account in the calculations above.

**This is the estimated loan principal that may be forgiven. The estimated PPP loan forgiveness amount is based on current guidance from the government and may change as additional guidance is issued.

***This number does not include interest that may also be owed on amounts that are not subject to forgiveness. Interest for PPP loans is calculated at 1% from the date of loan disbursement.

The PPP Forgiveness Estimator is based on the information you provide. It is for information purposes only and is provided based on current government guidance, which is subject to change. Additional guidance from the government may change or clarify certain aspects of the forgiveness process and could result in changes to the Forgiveness Estimator. ADP is not responsible for and provides no warranty as to the accuracy of this content. ADP does not provide legal, accounting or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of such professionals who can better address your specific concern and situation.