Paycheck Protection Program (US)
Estimate your SBA PPP loan forgiveness amount using eligible payroll costs, non-payroll expenses, and FTE count. Free US Paycheck Protection Program calculator.
About This Calculator
The Paycheck Protection Program (PPP) Loan Forgiveness Calculator helps US small business owners estimate how much of their SBA PPP loan will be forgiven. Enter your loan amount, eligible payroll and non-payroll expenses, and full-time equivalent (FTE) employee counts to get an instant forgiveness estimate based on the official SBA forgiveness formula.
The forgiveness calculation follows the SBA Form 3508 methodology. The total eligible expenses include payroll costs (salary, wages, tips, health insurance, retirement contributions, and payroll taxes) and non-payroll costs (mortgage interest, rent, utilities, and covered operating expenses). At least 60% of the forgiveness amount must be allocated to payroll costs. The FTE reduction factor compares your average employee count during the covered period against the reference period. If your FTE count decreased, the forgiveness amount is proportionally reduced, unless a safe harbor exemption applies.
Regional Notes
United States: The Paycheck Protection Program is a US Small Business Administration (SBA) loan program established under the CARES Act of 2020 and extended by subsequent legislation. PPP loans can be fully or partially forgiven when at least 60% of proceeds are used for payroll costs and the remaining 40% for eligible non-payroll costs. Borrowers must apply for forgiveness through their lender or the SBA direct forgiveness portal. The covered period is 8-24 weeks from loan disbursement, and borrowers have up to 5 years from the SBA loan number issuance date to apply for forgiveness.
India & United Kingdom: The PPP is a US-specific program. For similar small business support programs, businesses in India can explore the MUDRA loan scheme, CGTMSE, or SIDBI programs, while UK businesses can research the Recovery Loan Scheme (RLS) or Start Up Loans program.
Frequently Asked Questions
How does the PPP loan forgiveness calculator work?
Enter your PPP loan amount, eligible payroll costs, eligible non-payroll costs (mortgage interest, rent, utilities), and your FTE employee counts for the reference and covered periods. The calculator applies the SBA formula: forgiveness = min(loan amount, total eligible expenses) multiplied by the FTE reduction factor (current FTE divided by reference FTE, capped at 1). Non-payroll costs are included at their full amount, and the final result shows how much of your loan is forgiven versus how much you need to repay.
What expenses qualify for PPP loan forgiveness?
Eligible expenses include payroll costs (salary, wages, tips, health insurance, retirement contributions, and state/local payroll taxes) and non-payroll costs (business mortgage interest payments, business rent or lease payments, and business utility payments such as electricity, gas, water, transportation, telephone, and internet). At least 60% of the forgiven amount must be spent on payroll costs.
How is the FTE reduction calculated for PPP forgiveness?
The FTE reduction factor is calculated by dividing the average number of full-time equivalent employees during the covered period by the average FTE during the reference period (capped at 1). If the ratio is less than 1, the forgiveness amount is proportionally reduced. For example, if your reference FTE was 10 and your covered period FTE is 8, the forgiveness amount is multiplied by 0.8 (80%).
Can I get 100% of my PPP loan forgiven?
Yes, you can receive 100% forgiveness of your PPP loan if you use the full loan amount on eligible expenses within the covered period, maintain your FTE employee headcount, and do not reduce salaries or wages by more than 25% for any employee earning less than $100,000 per year. At least 60% of the forgiven amount must be spent on payroll costs.
What is the covered period for PPP loan forgiveness?
The covered period is the time during which eligible expenses must be incurred and paid. Borrowers can choose a covered period between 8 and 24 weeks from the date of loan disbursement. This flexibility allows businesses to maximize forgiveness based on when they incur payroll and non-payroll costs.
How do I apply for PPP loan forgiveness?
Apply for PPP loan forgiveness through your lender or the SBA direct forgiveness portal at directforgiveness.sba.gov. You will need to submit SBA Form 3508, 3508EZ, or 3508S depending on your loan amount. Provide documentation including payroll reports, tax filings, lease agreements, and utility invoices to support your forgiveness request. Applications can be submitted any time up to five years from the date SBA issued the loan number.
What happens if my PPP loan is not fully forgiven?
Any portion of the PPP loan that is not forgiven must be repaid to the lender. The unforgiven portion accrues interest at 1% per annum and must be repaid over the remaining loan term (2 or 5 years depending on when the loan was originated). Payments are deferred until 10 months after the last day of the covered period, or upon SBA remittance of the forgiveness amount, whichever comes first.
Are there any exemptions to the FTE reduction penalty?
Yes, the SBA provides safe harbor exemptions from the FTE reduction penalty. These include: (1) inability to rehire employees who were employed on February 15, 2020 and who rejected a good-faith written offer to return, (2) inability to hire similarly qualified employees by December 31, 2020, and (3) compliance with HHS/CDC or OSHA COVID-19 guidance that reduced business hours or service capacity.