How To Make A PPP Loan Forgiveness Payroll Report [Complete Guide]

Small business owners can apply for the Paycheck Protection Program (PPP) and the major criteria of PPP are that their average qualified monthly payroll expenses are approx 2.5x, up to 10 million dollars i.e. utilized for eligible payroll costs and other operating costs, mortgage interest, including rent and other utilities. The PPP loans are forgivable but they provide an essential lifeline to lucky businesses who were successful with their applications. The small business owners have to prove with all relative documents that the bulk of received funds were spent on eligible costs. If certain requirements are met to make a PPP loan forgiveness payroll report then the PPP loan may forgivable.

Apart from this other criteria are included in PPP:

  • Eligible payroll expenses are utilizing a minimum of 60% of the funds. 
  • Create a report of the rehiring of employees and the number of employees before 31 Dec 2020 or before the date of submission of your loan forgiveness application. 
  • Create a report of employee salaries and restoring salaries and wages by 31 Dec 2020 or before the day of submitting your loan forgiveness application.

Which things are included or not to make a PPP loan forgiveness payroll report

The major things should that should be included while making a PPP loan forgiveness payroll report that the eligible payroll costs, including:

  • Including the compensation of employee cash, Including wages, salaries, commissions, or similar compensation that are not more than $100,000 per year.
  • Local taxes estimated compensation.
  • The benefits of group healthcare and the insurance premiums.
  • Sick leave is not covered by Families First Corona Virus Response Act (FFCRA) or paid parental, family, medical.
  • Equivalents payments of cash tips.
  • Paid time off.
  • Retirements contributions.

There are some ineligible costs that should not be included when making a PPP loan forgiveness payroll report:

  • Payments of contractor and vendor.
  • Qualified sick leave under the guidelines of FFCRA.
  • Excluded Income of any employee more than $100,000 per year
  • The certain payroll taxes of employer’s share.
  • The compensation of the employee who lives outside of the U.S.

Using payroll accounting software to make a PPP loan forgiveness payroll report

Most of the accounting software runs tremendous PPP payroll reports to make it easy. A simple way to create PPP payroll reports that are set a date range and enter employee’s details that you want to include in the report and produce a payroll report.

You also customize the things that you have to want to include in the reports in some accounting software. The summary of payroll reports includes net pay, gross pay, adjusted gross pay, employer taxes, and contributions for each employee. According to your needs customize the list of eligible payroll costs. You should be sharing your excel report of your PPP payroll report with your lender. After you applying your PPP loan forgiveness report do not forget to bring the relevant payroll documentation. These documents are included:

  • Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act EIDL Emergency Grant program received any advance.
  • Disbursement of the loan of rent or lease payments in the eight weeks.
  • All various documents of employees like payments receipts canceled checks, or account statements, and the health insurance of employee and also include the retirements plans of employees.
  • Filings of payroll tax.
  • The payroll of the total number of employees.
  • Disbursement of the loan of business utility payments in eight weeks.
  • Disbursement of the loan of payroll costs paid in eight weeks.
  • Disbursement of the loan of mortgage interest payments in eight weeks.
  • Employee pay rates.

By using Excel to make a PPP loan forgiveness payroll report

You should be made a payroll report in excel. Within excel you can be searching online for a payroll report online to start the easiest way. When it comes to implying for PPP payroll loan forgiveness is pivotal. If you are not sure about accounting and have any doubts then it’s good to check with an accountant or financial adviser and also work with your lender.

A simple way of applying PPP loan forgiveness

The SBA has declared a new borrow-friendly loan forgiveness application form and for many businesses also made a classified SBA form 3508EZ.

By using the latest EZ form the business owners encounter any of the following criteria:

  • Don’t have any employees and they are self-employed.
  • They did not have hours or salaries reduced by more than 25% of any employee.
  • The operations of the business were similar to the covid related health directives due to shelter in place laws. 

The business owner must fulfill a PPP loan forgiveness application form given by the Small Business Administration (SBA) for a loan to be forgiven. The forgiveness application must be submitted directly to your vendor as with the initial loan. In the forgiveness application form, the business owner has to calculate the forgivable amount and requires possible reductions. Due to more detailed guidelines is coming from the Small Business Administration (SBA) every week, they ask for complete documents and proper worksheets as per the guidance of SBA.

You will need the below information:

  • The detailed compensation of each and every individual employee to the worked hour.
  • If applicable then submit the document related to the advance amount and EIDL application number.
  • The document of at the time of loan application total number of employees.
  • The document of at the time of forgiveness application total number of employees.
  • The report of the total loan amount.
  • The exact date of received your loan proceeds.
  • Loan number of lender PPP.
  • Basic information about your business to identifying your business.
  • You may request your lender to give you the SBA PPP loan number.
  • Schedule of payroll.

Business owners will necessary to submit the following documents:

  • The documentation of bank account statements or third-party payroll service provider reports of employees to proof of cash compensation.
  • The documentation of tax forms to all the payroll tax filling reportable to the IRS and reporting of employee wage and filings reportable unemployment insurance tax to the state.
  • Provide proper documents of the retirement plans of employees and proof of forgivable employer contributions to health insurance.
  • Proof of mortgage interest payments and submit the copy of the lender amortization schedule for business mortgages.
  • Proof the relevant documentation of rent or release payments. It also includes a copy of the lease agreement and proof of the payments.
  • The relevant documents of utility payments of business.

The following documents are not necessary but may be requested by the Small Business Administration (SBA):

  • The documentation relevant to employees who were resigned, fired for cause, refused a good faith job offer, or request reductions in work hours.
  • The documentation related to payroll listings of the individual employees.

Last Thought!

In this article, we have deeply discussed the procedure and the important documentation when to make a PPP loan forgiveness payroll report. This article also consists of the simple procedure of applying a PPP loan forgiveness and make sure to follow the proper guidelines of the Small Business Administration (SBA). we sure that above all the points of the PPP payroll report clarify your all doubts. If you have to still not clear about the PPP payroll report and procedure of applying for PPP loan forgiveness and guidelines of SBA then you can reach out to our QB Support Team at Toll-Free number +1-855-525-4247. Our certified QuickBooks experts will be happy to assist you.

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