If a business needed to reduce employee salary or wages during its covered period, the reduction may affect the amount of forgiveness they qualify for when applying for PPP Loan Forgiveness. However, a business does not need to consider any salary/wage reductions when determining its forgiveness amount if any of the following apply:
- A business does not need to reduce its forgiveness amount if its PPP loan is for $50,000 or less (unless the business and its affiliates got more than $2M in PPP loans in aggregate).
- If the business reduced salary/wages between Feb 15, 2020, and April 26, 2020 and restored those salaries/wages to the same level as the Feb 15, 2020 pay period by December 31, 2020 (or, for loans made after December 27, 2020, the end of the business’s covered period), or
- A salary/wage reduction does not reduce a business’s forgiveness amount if it is a reduction of 25% or less.
If your business does not qualify for any of the above exemptions, please review our Determining FTE and Wage Reduction for PPP Loan Forgiveness support article to determine how to calculate your forgiveness reduction.
The information, opinions, and advice in this blog post are provided for educational purposes only and do not necessarily state or reflect those of BlueVine and/or its partners, including The Bancorp Bank and Celtic Bank. Neither BlueVine nor its partners are responsible for the accuracy of any content provided by the author(s) or contributor(s). For information about BlueVine products and services, please visit the BlueVine FAQ page. For information about the Paycheck Protection Program, please visit the SBA’s page.