Updated August 14, 2020
What we’ll cover
- What is PPP Loan Forgiveness?
- Report usage guidelines
- How to run the PPP Loan Forgiveness Report
- OnPay’s PPP Loan Forgiveness Report Overview
- How the report is calculated
- SBA resources for loan forgiveness information
Note: Once you have run your report, you can use this guide to fill out the Schedule A.
What is PPP Loan Forgiveness?
If your businesses received a PPP Loan, you can apply for forgiveness of part, or even all of that loan. Our PPP Loan Forgiveness Report will assist you and your lender in determining the amount of forgiveness to apply for, and we’ll make sure it’s based on eligible expenses related to payroll that meet the Small Business Administration (SBA) requirements. Learn more about PPP loan forgiveness→
Report usage guidelines
The information in this report is sourced from OnPay’s payroll records and tax documentation from the relevant period. If you have not processed all payrolls within the relevant period, this report could be incomplete. In addition, for individuals or entities that filed or will file a 2019 Form 1040 Schedule C, this report does not exclude or limit owner compensation or covered benefits for owners.
Once you’ve run the report, you can download it as an Excel spreadsheet, where you can edit any information that isn’t accounted for by OnPay. The totals will recalculate automatically. Borrowers are solely responsible for the accuracy of all information submitted as part of their PPP loan forgiveness application and must certify that the documentation is correct.
How to run the PPP Loan Forgiveness Report
In your Company Dashboard, click Covid-19.
Click PPP Loan Forgiveness Report.
Enter the date of the first day of the covered period you want forgiven, and the covered period. Choose between an 8 week or 24 week covered period duration for this report, and click View Report.
What date should I use for the start of my covered period?
Regulatory guidance gives business owners two options for calculating the covered period of payroll expenses. In general, payroll costs paid or incurred during the eight (56 days) or twenty-four (168 days) consecutive week covered period are eligible for forgiveness. You can choose this period to begin on one of two dates:
- The date of disbursement of your PPP loan proceeds from the lender (i.e., the start of the covered period)
- The first day of the first payroll cycle in the covered period. (For administrative convenience, borrowers with a weekly or biweekly payroll schedule may elect to calculate eligible payroll costs using the eight-week (56-day) or twenty-four-week (168-day) period that begins on the first day of their first pay period following their PPP loan disbursement date, known as the Alternative Payroll Covered Period)
Note: If you need to adjust the pay period to align with the Covered Period, you can edit the check details before running your report.
Once you’ve clicked View Report, check your downloads folder for a new “.xlsx” file.
OnPay’s PPP Loan Forgiveness Report Overview
The OnPay PPP Loan Forgiveness report is designed to assist you in filling out the PPP Loan Forgiveness Application. The report is subtotaled in two parts, to meet what’s needed in the PPP Schedule A and PPP Schedule A worksheet.
Employees who earned less than $100,000 in 2019
The totals for all employees who:
- Were hired in 2020, or
- Made less that $100,000 in 2019
Employees who earned $100,000 or more in 2019
Everyone who isn’t in the first section will appear here.
Color coded sections
The report is also color coded to help you interpret the information.
- Blue: Payroll cost and Full-Time Equivalent (FTE) information from the 8-week or 24- week Covered Period
- Purple: Wage comparison data from the lookback period and potential loan forgiveness reduction information
- Green: Full-Time Equivalent lookback period data for calculation Option 1 (2/15/2019 - 6/30/2019)
- Orange: Full-Time Equivalent lookback period data for calculation Option 2 (1/01/2020 - 2/29/2020)
How the report is calculated
How we calculate the payroll costs in the covered period
The report calculates payrolls costs incurred within the relevant 8 week or 24 week period. Pay runs that cover days within or outside the 8 week or 24 week window will be prorated by the number of days within the pay period. (blue section - column C - column H)
The employee earned $500 over the two-week period from 3/29 to 4/11, but the "Covered Period" began on 4/10. This means that only two days of this pay period should be included in the relevant PPP Loan report. Prorated payroll costs are determined by calculating the daily rate. Because two days fall in the covered period, OnPay calculates 2 x $35.71= $71.43
- Pay Period: 3/29/20 — 4/11/2020
- Period Gross Pay: $500
- Total number of days in the pay period: 14
- Calculate daily rate: $500/14 = $35.71
- Covered Period begins: 4/10/2020
- Number of days in the covered period: 2
- Calculate covered payroll cost: 2 x $35.71= $71.43
Please note if you have not processed all payrolls within the relevant period this report could be incomplete.
How we calculate the potential forgiveness reduction amount (column S)
For hourly employees, the reduction in their hourly rate is multiplied by their average weekly hours from Quarter 1 of 2020 and then multiplied by 8 or 24, depending on the length of the covered period. For salaried employees, the reduction in their average annual salary is multiplied by 8 or 24, depending on the length of the covered period.
Hourly Employee Calculation Method
- Multiply the rate from the lookback period (column P) by 0.75
- Subtract the average hourly rate from the covered period (column J) from the result in step 1.
- Divide the total hours from the lookback period (column Q) by 13 to determine the average number of hours worked per week between 1/1/2020-3/31/2020.
- Multiply the amount result of step 2 by the result of step 3.
- Multiply the result of step 4 by the number of weeks in the covered period ( either 8 or 24)
The amount calculated in step 5 is your potential wage reduction for the hourly employee.
Salaried Employee Calculation Method
- Multiply the average annual salary from the lookback period (column O) by 0.75.
- Subtract the average annual salary from the covered period (column I) from the result in step 1.
- Multiply the result of step 2 by the number of weeks in the covered period (either 8 or 24).
- Divide the result of step 3 by 52 weeks.
The amount calculated in step 4 is your potential wage reduction for the salary employee.
The FTE/Wage reduction safe harbor exempts certain borrowers from the loan forgiveness reduction based on FTE employee levels. Specifically, the Borrower is exempt from the reduction in loan forgiveness based on FTE employees described above if both of the following conditions are met:
- The Borrower reduced its FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; and
- The Borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE employee levels in the Borrower’s pay period that included February 15, 2020. The OnPay report does not account for the safe harbor exemptions, all employers should evaluate if their company meets the safe harbor exemption requirements prior to completing their loan forgiveness application.
SBA resources for loan forgiveness information
- PPP Loan Forgiveness Application
- SBA Loan Forgiveness Application EZ
- SBA Loan Forgiveness Application-EZ Instructions
Please note that as COVID-19 legislation is changed or extended, always refer to IRS guidance for the most up-to-date information.