PPP Update

Late last night, April 6, 2020, the federal government issued further guidance regarding the Paycheck Protection Program (PPP) under the CARES Act. That guidance further changed the interpretation of “payroll costs” under the PPP and provides that federal employment taxes assessed on the employer (FICA) are not taken into account in determining such costs; it also clarified other ambiguities in the law.

Payroll costs that do qualify include:

  • Salaries

  • State employer payroll taxes

  • Retirement contributions (employer)

  • Employer provided group health insurance

  • Vacation, parental, family, medical or sick leave

Costs that do not qualify include:

  • Compensation in excess of $100K

  • Payments to contractors

  • Federal employer taxes

  • Privately funded health insurance

  • Compensation to employees residing outside of US

Robert Martin