Defining “payroll costs” for BlueVine
Eligible Payrolls Costs Include:
- Compensation (salary, wage, commission, or similar; payment of cash tip or equivalent)
- Payment of state or local tax assessed on the compensation of employees
Tip: If you have employees outside of the U.S., do NOT include their payrolls costs
Non-eligible Payroll Costs
- Compensation of employees whose principal place of residence is outside of the U.S.
- Any compensation paid to an employee that exceeds an annual salary of $100,000.
- Payments made to independent contractors
- Taxes imposed or withheld under chapters 21, 22, and 24 of the IRS code
- Qualified sick and family leave for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act
How to calculate PPP payroll costs by business entity type
Determine whether your business classifies as a regular, seasonal, new business, or sole proprietorship and use the timeframe recommended below to calculate your monthly average payroll costs.
- U.S. Small Businesses: The applicable period for an established small business is a full 2019 calendar year (12 months).
- Seasonal Businesses: The applicable period for a seasonal business that only operates during certain parts of the year is from Feb 15, 2019 to June 30, 2019 (5 months).
- New Small Business: The applicable period for a new small business is from Jan 1, 2020 through Feb 29, 2020 (2 months).
- Not an Employer: The income for sole-proprietors is reported on your Schedule C (line 31). If you have filed a Schedule C and 944 form, add line 31 from Schedule C to line 1 and 2 from 944 form. The applicable period is a full 2019 calendar year unless you are seasonal business or new business.
For more information on acceptable documents for payroll, please visit: https://bluevine.zendesk.com/hc/en-us/articles/360041607092
Totaling average payroll costs
Add all of your eligible payroll costs together over your applicable period and divide by the applicable period.
Tip: Remember to exclude non-eligible payroll costs including employees earning over $100,000 and non-U.S. employees.
How BlueVine calculates your pre-approved PPP loan
BlueVine calculates your pre-approved PPP loan with a simple equation using the inputs you provided on your average payroll costs and status of Economic Injury Disaster Loan (EIDL).
We take your average payroll costs then multiply it by 2.5.
Under the rare circumstance that you have an EIDL, we then add the current outstanding balance of EIDL minus any advance you received on the EIDL.
For more information on how to estimate loan amount, please visit: https://www.bluevine.com/how-to-calculate-ppp-loan-amount/