During the covered period, the business reduced an It was all used in the 8 weeks. The loans are fully forgivable if borrowers: 1. You can 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 average wage is a measure of total income after taxes divided by total number of employees employed. FTE Reduction Safe Harbor 1: If you were unable to operate between February 15, 2020, and the end of the Covered Period at the The maximum for each employee is capped at 1.0. Compensation for employees who live outside the U.S. Average FTE. Employer contributions paid or incurred during the 24 weeks to qualified retirement and health care plans for those employees can also be submitted for PPP loan forgiveness. Step 1: Get the employees average hourly wages for the Covered Period (8 or 24 weeks), or Alternative Payroll Covered Period, and Q1 2020 (Jan 1 - Mar 31, 2020). SBA has officially closed the PPP origination platform on Friday, May 28th, 2021 at 4pm PT due to the fund exhaustion. The borrower did not reduce annual salary or hourly wages of any employee by more than 25% during the covered period and did not reduce the number of employees or average paid hours of employees between January 1, 2020 and the end of the covered period. The Treasury defines a full-time employee as an employee who works 40 or more hours per week, so FTE is calculated on a scale of 1.0, with 1.0 being the equivalent of 40 hours per week. So, if you have a full-time employee that works 40 hours per week, they would have an FTE of 1.0 (40 hours paid each week / 40 = 1.0). All employees who are paid 40 hours/week or more are assigned 1.0. Each individual’s compensation cannot exceed an annualized salary of $100,000. Calculate the average number of hours paid per week, divide by 40, and round to the nearest tenth. Maximum value of 1.0. For simplicity, you can choose to use 1.0 for anyone who works 40 hours or more, and 0.5 for anyone else. The Treasury defines a full-time employee as an employee who works 40 or more hours per week, so FTE is calculated on a scale of 1.0, with 1.0 being the equivalent of 40 hours per week. or ii.are true: i.You didnotreduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of your Covered Period. Line 1. Hours paid each week / 40 = FTE. How to calculate FTE: Average number of hours paid during the covered period (or alternative period) and divide by 40 before rounding to the nearest 10th (ex. During the chosen reference period, a Borrower paid 20 employees to work an average of 40 hours weekly, and 10 employees to work an average of 30 hours weekly. 2. Use the loan for qualifying payroll and non-payroll expenses during the covered period: 1… If the employee is a salaried worker, skip to Step 4. End of feb 2021. Or, simply assign a 1.0for employees who work 40 hours or more per week and 0.5for employees who work fewer hours. Similarly, if an employee was paid for ten hours per week on average during the covered period, the employee is an FTE employee of 0.25. had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form automatically qualify to use the Loan Forgiveness Application Form 3508EZ or lender … “Employees” means only those individuals who did not receive wages or salary at an annualized rate in an amount of more than $100,000 during any period of 2019, and either: They did not reduce the number of employees or the average paid hours of those employees from Jan. 1, 2020 to the end of their Covered Period. Full-time equivalent employees:To calculate the average FTE, borrowers take the average number of hours paid per week per individual employee, divided by 40, and round the total to the nearest tenth, capped at 1.0. The maximum for each employee is capped at 1.0. Under the SBA’s interim final rule, a full-time employee is defined as an employee who works 40 or more hours per week. This video focuses on FTE Full Time Equivalent Employees and how they impact your PPP Loan Forgiveness. FTE reduction safe harbor 1:If you were unable to operate between February 15, 2020, and the end of your covered period at the same level of business activity as before February 15, 2… For 2020 Q2, Q3 and/or Q4 (for Q2, including March 13 - March 31, 2020): For 2019, averaged 100 or “fewer full-time employees” (average of 30 hours per week or 130 hours per month). The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.2 hour to 34.1 hours. The maximum for each employee is capped at 1.0. Certain state and local taxes assessed on compensation. Divide by 40 and round to the nearest tenth to get your FTE calculation. You did not reduce the number of employees or average paid hours of employees from January 1, 2020, ... Run the PPP FTE Count report by clicking on that tab. _____ To determine FTE, for each employee, take the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. *Ignore reductions made due to an inability to rehire laid-off individuals who were your employees on 2/15/20 if you were unable to hire similarly qualified employees … A: If you reduce the amount you pay to your employees (excluding those earning more than $100,000 on an annualized basis in any single pay period in 2019), the amount of loan forgiveness may be decreased. ELIGIBLE PAYROLL COSTS: Paid or Incurred: Borrowers are generally eligible for forgiveness for the … The unforgiven portion of a PPP … The average FTE calculation divides the average number of hours average number of hours paid to an employee each week by 40 and rounds to the nearest tenth: Total number of hours paid / 40 = FTE Under the SBA’s interim final rule, a full-time employee is defined as an employee who works 40 or more hours per week. Click the Change Dates button and enter the date range for the month you applied for the loan. The PPP was established by the CARES Act,and extended and expanded through a number of laws. Group healthcare benefits and insurance premiums. To determine the average number of FTEEs during the applicable period, generally the following method must be used for each employee: Determine the average number of hours paid per week during the applicable period; Divide by 40; and; Round the total to the nearest tenth. For each employee during the covered period, calculate the average number of hours paid per week, divide by 40, and round to the nearest tenth. … Did you reduce* your number of employees or the average paid hours of employees between 1/1/20 and the end of your PPP covered period? The borrower can ignore: • Ignore any employee who received salary/wages at an annualized rate of pay of more than $100,000 in any pay period in 2019. Second, for administrative convenience, borrowers may elect to use a full-time equivalency of 0.5 for each part-time employee who worked less than 40 hours per week.. Calculate the average number of hours paid per week, divide by 40, and round to the nearest tenth. The Borrower did not reduce the number of employees or the average paid hours of the employees between January 1, 2020 and the end of the Covered Period. Next steps. The maximum for each employee is capped at 1.0. Can you bring back all the employees by June 30 then lay them off 14 days later for safe harbor? Maximum value of 1.0. For full details on how you should spend your PPP loan, go here. The maximum FTE for each employee is capped at 1.0 FTE (i.e., any employee working on average 40 or more hours will count as an FTE of 1.0). Example. Determine the average number of hours worked per week during the most recent full quarter before the Covered Period. Send this bad boy in and … Full-time equivalent employees:To calculate the average FTE, borrowers take the average number of hours paid per week per individual employee, divided by … An employee’s FTE is calculated using his or her average number of paid hours per week, divided by 40, rounding the total to the nearest tenth and capped at 1.0. Borrowers can choose a simplified method that assigns 1.0 FTE for employees who work on average 40 or more hours per week and 0.5 FTE for employees who work on average less than 40 hours per week. Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year. For 2021 : For 2019, averaged 500 or fewer full-time employees. You should not include the following ineligible costs in your PPP payroll report: Any employee’s income over $100,000 per year. All of the following count towards your approved payroll expenses: Salary, wages, commissions, or tips (this is capped at $100,000 based on annual pay for each employee) Employee benefits, including paid time off for vacation, family, medical, or sick leave. Average full-time equivalency (FTE) for Form 3508EZ If using Form 3508EZ and you meet the conditions related to reduction of salaries, number of employees and hours, you will need to document the average number of FTE employees on payroll employed on January 1, 2020 and at the end of the covered period. Specifically, if you reduce the average annual salary (for salaried employees) or average hourly rate (for hourly employees) of one or more Retirement contributions. That gives businesses a lot more leeway in eligible wage expenses. For example, an employee earning $100,000 a year would have been paid $46,154 over the full 24-week period allowed, more than double the 2.5 months of PPP funding provided for that employee. Provides a safe harbor from reductions in forgiveness, based on reductions in full … By now, you’re probably well-versed in the PPP (Paycheck Protection Program). Employers who qualify, including borrowers who took a loan under the initial PPP, can claim the credit against 50 percent of qualified wages paid, up to $10,000 per employee annually for wages paid between March 13 and Dec. 31, 2020. The first way to calculate FTE is to take the average number of hours paid each week, divide by 40, and round to the nearest tenth. Hours paid each week / 40 = FTE. The Treasury defines a full-time employee as an employee who works 40 or more hours per week, so FTE is calculated on a scale of 1.0, with 1.0 being the equivalent of 40 hours per week. allowances for dismissal or separation paid or incurred during the Covered Period or the Alternative Payroll Covered Period; Each individual’s compensation cannot exceed an annualized salary of $100,000. “Employees” means only those individuals who did not receive wages or salary at an annualized rate in an amount of more than $100,000 during any period of 2019, and either: They did not reduce the number of employees or the average paid hours of those employees from Jan. 1, 2020 to the end of their Covered Period. The borrower can ignore: The average number of FTE employees on payroll per week between February 15 and June 30, 2019; OR; The average number of FTE employees on payroll per week between January 1 and February 29, 2020; OR; If you’re a seasonal employer, either of these two date ranges or any consecutive 12-week period between May 1 and September 15, 2019. ... 2020 and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor. The first way to calculate FTE is to take the average number of hours paid each week, divide by 40, and round to the nearest tenth. What happens to the portion of the PPP Loan that is not forgiven? Add up the average weekly FTEs using this method to arrive at the total for the period. Take the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. • However, if you did reduce the number of employees or average paid hours, complete the FTE Calculator by inserting (recall –40+ hours is equivalent to 1.0 FTE): • Average FTE between 2/15/20 and 4/26/20 • Total FTE in pay period inclusive of 2/15/20 For each employee, borrowers can enter the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. The maximum for each employee is 1.0. 3a. The guidance also provides a simplified method, under which employees who work 40 hours or more per week are assigned a 1.0, and those who work less are assigned a 0.5. Thus, for each employee, enter the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. For employees who were paid for less than 40 hours per week, borrowers can calculate the average number of hours the employee was paid per week during the covered period. Page 3: Schedule A. Self-employed individuals without payroll can skip lines 1 through 8. A new PPP Loan Forgiveness Application Form (3508EZ) published by the SBA for Borrowers that: Did not reduce the number or hours of your employees, and did not reduce the salaries or wages of your employees by more than 25% Any part-time employees that did not work more than 40 hours on average will have their average weekly hours worked added together. By working on repairing cars if I turned 44 hours commissions he would keep all that pay for himself and used the ppp loan to pay me my weekly average. Step 3: If the employee is an hourly worker, compute the total dollar amount of the reduction that exceeds 25% as follows. The maximum for each employee is capped at 1.0. Borrowers must divide the average number of hours paid for each employee per week by 40. AND b. Eitherof the following statementsi. Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12). No reduction in employees or average paid hours: If you have not reduced the number of employees or the average paid hours of your employees between January 1, 2020 and the end of the Covered Period, check here ☐. FTE Reduction Safe Harbor 1: If you were unable to operate between February 15, 2020, and the end of the Covered Period at the For example, if you have 3 employees who consistently worked 20 hours a week, altogether they would count as 1.5 FTE. A business’s forgiveness amount will be reduced if: 1. Safe Harbor 2. You did not reduce the number of employees or average paid hours of employees from January 1, 2020, through the end of the covered period, OR; You were unable to maintain the same level of business activity as prior to February 15, 2020 during the covered period. It provides forgivable loans to small business owners to help keep employees on payroll. For example, an employee earning $100,000 a year would have been paid $46,154 over the full 24-week period allowed, more than double the 2.5 months of PPP funding provided for that employee. 3. The maximum count for each employee is 1.0 (so any hours paid over 40 hours will still count as 1.0) (option #1). To calculate average FTEs, for each employee, you enter the average number of hours paid per week, divided by 40 and then rounded to the nearest tenth. 3b. No reduction in employees or average paid hours: If you have not reduced the number of employees or the average paid hours of your employees between January 1, 2020 and the end of your covered period. Average Weekly Hours in the United States averaged 34.38 Hours from 2006 until 2021, reaching an all time high of 34.90 Hours in January of 2021 and a record low of 33.70 Hours in June of 2009. He would pay me 53.4 hours weekly. The PPP loan maximum for first-draw borrowers is 2.5 times your average monthly payroll costs (which include healthcare costs) for 2019 or 2020, up to $2 million. The average FTE calculation divides the average number of hours average number of hours paid to an employee each week by 40 and rounds to the nearest tenth: Total number of hours paid / 40 = FTE. But if you aren’t, here’s a quick refresher. In addition to minimum wage, workers are entitled to 5 days of paid annual leave, paid public holidays, the thirteenth-month pay, maternity and paternity leave benefits, as well as health and insurance benefits. Currently, there is no guidance regarding employees after the covered period ends and after the safe harbor period of June 30, 2020 ends. It’s finally time to submit your loan forgiveness application. No reduction in employees or average paid hours: If you have not reduced the number of employees or the average paid hours of your employees between January 1, 2020 and the end of the Covered Period, check here ☐. employees on February 15, 2020, if the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020 (or, for a PPP loan made after December 27, 2020, before the last day of the Covered Period), and reductions in an employee’s hours that a borrower offered to restore and were refused). Employees who were paid less than 40 hours/week (including in organizations with set schedules of less than 40 hours) are assigned 0.5. Philipino employees typically work 8 hours a day and any overtime work should be paid at least an additional 25% of the regular pay. Certain second-draw borrowers can borrow 3.5 times the average monthly payroll costs. If you fall into any of the three following categories, you do not need to reduce your forgiveness amount by the FTE reduction: 1. Average FTE 10 Obtained from hours worked or full-time salaried employees Average Monthly Payroll $10,000 Monthly payroll / 12 months Loan Amount $25,000 Average Monthly Payroll * 2.5 - Amount for payroll (75%) $18,750 - Amount for Rent, Mortgage Interest, and Utilities $6,250 The borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the CP. Paid time off. Last year my average pay I was receiving 53.4 hours of pay through the ppp loan.