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. The tool contains updates from the latest government guidance and the new COVID-19 related relief law, passed by Congress in December 2020.

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 your covered period. Your covered period can be between 8 and 24 weeks, beginning on the date of disbursement of your loan. Also, if you pay your employees on a biweekly or more frequent schedule, you may choose to begin the covered period on the first day of the first pay period following disbursement of the loan (“Alternative Payroll Covered Period”) for qualifying payroll costs only. 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 applicable 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, bonuses and severance pay, capped at the annualized value of $100,000 for the length of the applicable Covered Period or Alternative Payroll Covered Period. For a 24-week Covered Period, this cap is $46,154. For an 8-week Covered Period, this limit is $15,385.
  • 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-paid healthcare and group insurance 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 60% of the forgiveness amount must be for payroll costs.

Enter your eligible non-payroll costs, such as mortgage interest, rent and utility payments, during the covered period

The PPPFA allows up to 40% of the forgiveness amount to be used to pay any of the following costs during the Covered Period:

  • Interest on mortgage obligations in force before February 15, 2020;
  • Rent under lease agreements in force before February 15, 2020; and
  • Utilities for which service began before February 15, 2020
  • In addition, certain covered supplier costs, worker protection expenditures, property damage costs and operations expenditures can also be included in your non-payroll costs.
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 between January 1 and March 31, 2020, 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 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 the number of weeks in your Covered Period. For salaried employees, multiply the result from Part 3 by the number of weeks in your Covered Period and divide by 52.
  5. For any employee whose average annual salary or average hourly wage decreased by more than 25%, if the reduction occurred between February 15 and April 26, 2020, you may avoid a forgiveness reduction for the employee if you restore the employee’s average annual salary or average hourly wage by the time of your forgiveness application or by September 30, 2021, if earlier. If you have done so, you would enter a zero for this employee.
  6. Finally, total all results for all employees whose salary or hourly wages decreased by greater than 25%.

If there were no reductions in excess of 25%, enter zero for this field.

Note: The government has issued guidance to make clear that borrowers should not be doubly penalized by reductions in wages and FTEEs. Accordingly, reductions in average annual salary or average hourly wage should only be considered to the extent that they are not attributable to FTEE reductions.

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. Exclude employees for whom you provided an offer of rehire or terminated for cause, who voluntarily reduced hours or quit, or whom you have been unable to rehire or to hire similarly qualified replacements. Additionally, forgiveness will not be reduced for failure to maintain employment levels if the organization is able to document an inability to return to the same level of business activity as existed prior to February 15, 2020, due to compliance with COVID-19-related guidance for sanitation, social distancing, or worker or customer safety requirements from the Health and Human Services (HHS), the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration (OSHA). Note that you must maintain written documentation for employees who fall into this exclusion and must inform the applicable state unemployment office as to an employee’s refusal of rehire.

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 60% 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 FTEEs during the covered period.

* Note that borrowers who received loans prior to August 8, 2020 in amounts of $50,000 or less may be exempt from reductions in loan forgiveness amounts based on reductions of full-time equivalent employees or in salaries or wages. If eligible, borrowers would use the SBA Form 3508S, or their lender’s equivalent form, to submit their loan forgiveness application. Borrowers who received PPP loans on or after December 2020 may be entitled to use a streamlined forgiveness process for loans of $150,000 or less.

**If you have reductions in FTEE levels during the covered period, you can consider rehiring employees by the end of the applicable Safe Harbor period, 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 the end of the applicable Safe Harbor period, 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. The Safe Harbor period ends on December 31, 2020 for borrowers who received their PPP loan prior to August 8, 2020, and on the last day of the chosen covered period for borrowers who received their PPP loan or Second Draw PPP loan in or after December 2020. 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.