Paycheck Protection Program Loan Calculator
Calculate your PPP loan forgiveness amount, monthly payments, and understand SBA PPP loan requirements. The Paycheck Protection Program provides forgivable loans to help businesses maintain payroll during economic hardship.
Forgiveness Summary
Loan Amount:
$0.00
Forgiven Amount:
$0.00
Amount to Repay:
$0.00
Payment Information
Monthly Payment:
$0.00
Deferral Period:
10 months
First Payment Date:
N/A
Forgiveness Breakdown
Payroll Portion:
$0.00
Non-Payroll Portion:
$0.00
Forgiveness Rate:
0%
Understanding PPP Loans
The Paycheck Protection Program (PPP) was created to help businesses maintain payroll and operations during the COVID-19 pandemic. PPP loans are unique because they can be fully forgiven if used for eligible expenses and certain conditions are met.
How PPP Loan Forgiveness Works
Forgiveness Eligibility
- 75% of loan for payroll costs
- 25% for rent, utilities, mortgage
- Maintain employee levels
- Maintain salary levels
Forgiveness Process
- Use funds within 24 months
- Apply within 10 months of loan
- SBA reviews application
- Forgiven amount discharged
Loan Terms
- 2-year term
- 1% interest rate
- 10-month payment deferral
- No collateral required
Repayment Requirements
- If not fully forgiven
- Monthly payments start after deferral
- 2-year repayment period
- Personal guarantee may be required
PPP Loan Forgiveness Rules
| Requirement | Covered Period | Alternative Period | Impact on Forgiveness |
|---|---|---|---|
| Payroll | 8-24 weeks | 24 weeks | 75% of forgiveness |
| Headcount | 8-24 weeks | 24 weeks | Full reduction if reduced |
| Salary | 8-24 weeks | 24 weeks | Prorated reduction |
| Non-Payroll | 8-24 weeks | 24 weeks | 25% of forgiveness |
Eligible PPP Expenses
Payroll Costs (75%):
- Salary, wages, commissions
- Cash tips, vacation pay
- Sick leave, family leave
- Group health insurance
- Retirement contributions
- State/local taxes on payroll
Non-Payroll Costs (25%):
- Rent/lease payments
- Mortgage interest
- Utility payments
- Business insurance
- Property taxes
- Business software/licenses
Forgiveness Calculation
PPP Forgiveness Formula
Forgiveness = (Payroll Costs × 0.75) + (Non-Payroll Costs × 0.25)
Adjustments:
- Headcount reductions
- Salary reductions
- Amount spent vs. eligible
- Covered period length
Example:
- $100,000 PPP loan
- $75,000 payroll costs
- $25,000 non-payroll costs
- 100% forgiveness eligible
Safe Harbor Provisions
Restoration Periods
Employee Restoration:
- Restore by June 30, 2021
- Avoid headcount reduction
- Full forgiveness maintained
- Applies to most businesses
Salary Restoration:
- Restore by December 31, 2021
- Avoid salary reduction penalty
- Prorated forgiveness restored
- Applies to businesses <$50M revenue
Alternative Periods:
- 24-week covered period
- Alternative to 8-24 week period
- May provide better forgiveness
- Depends on business situation
Documentation:
- Keep detailed records
- Support all expense claims
- Prepare for SBA audit
- Retain records for 6 years
Tax Implications
Forgiven Amounts:
- Not taxable income
- Expenses remain deductible
- No double taxation
- Applies to all forgiveness
Non-Forgiven Amounts:
- Tax-deductible interest
- Business expense deduction
- Subject to ordinary income tax
- Self-employment tax implications
Key Takeaways for PPP Loans
- PPP loans can be fully forgiven if used for eligible expenses and employment levels are maintained
- 75% of the loan must be used for payroll costs, 25% for other eligible expenses
- Forgiveness applications must be submitted within 10 months of the loan forgiveness period end
- Maintain detailed records of all PPP expenses for potential SBA audit
- Forgiven amounts are not taxable income to the business
- If not fully forgiven, payments are deferred for 10 months with 1% interest
- Safe harbor provisions allow time to restore employment and salary levels
- Work with a qualified PPP lender or advisor for best results