What are eligible payroll costs for forgiveness?
Payroll costs incurred during the 8 week (56 day) Covered Period, not exceeding $100,000 per employee on an annualized basis.
Eligible payroll costs include amounts spent on actual payroll as well as contributions to employee retirement plans, employee healthcare costs and state and local taxes assessed on employee compensation. There is a limit of $100,000 / year in payroll costs per employee, however health care, retirement benefits and state and local taxes are not counted against this limit.
Page 2 of Form 3508
Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred during the eight-week (56-day) Covered Period (or Alternative Payroll Covered Period) (“payroll costs”). Payroll costs are considered paid on the day that paychecks are distributed or the Borrower originates an ACH credit transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period (or Alternative Payroll Covered Period) are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered Period (or Alternative Payroll Covered Period). For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the covered period. Count payroll costs that were both paid and incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule on Paycheck Protection Program posted on April 2, 2020 (85 FR 20811).