Federal Taxes Included Payroll Calculations

Are federal taxes included in the payroll costs used to calculate the maximum loan amount?

No. Payroll costs are to be calculated on a gross basis without regard to federal taxes imposed or withholds such as the employee and employers share of FICA and income taxes withheld from employees.

For example, an employee who earned $4,000 per month in gross wages, from which $500 in federal taxes was withheld, would count as $4,000 in payroll costs. The employee would receive $3,500, and $500 would be paid to the federal government. However, the employer-side federal payroll taxes imposed on the $4,000 in wages are excluded from payroll costs under the statute.