Owner Employee Salary Calculations for PPP Forgiveness

As we know, for purposes of PPP forgiveness eligible payroll expenses, non-owner employee eligible payroll expenses are capped at $46,154 per employee (maximum annual salary of $100,000 * 24/52). However, owner employees and self-employed individuals’ eligible payroll expenses are capped at a minimum of:

Sole Proprietorship:

  • 2.5/12 (20.83%) of 2019 Net Income
  • $20,833 (if 24 weeks; $15,385 if 8 weeks)

Partnership:

  • 2.5/12 (20.83%) of 2019 Earnings from self-employment
  • $20,833 (if 24 weeks; $15,385 if 8 weeks)

C-Corp:

  • 2.5/12 (20.83%) of 2019
  • Cash Compensation
  • Retirement contributions paid by employer
  • Health insurance premiums paid by employer
  • $20,833 (if 24 weeks; $15,385 if 8 weeks)

S-Corp:

If ownership is greater than 2%, then:

  • 2.5/12 (20.83%) of 2019
  • Cash Compensation
  • Retirement contributions paid by employer
  • $20,833 (if 24 weeks; $15,385 if 8 weeks)

If ownership is less than 2%, the same treatment as a C-Corp (above) applies.

Still need help? We recommend checking out the U.S. Treasury’s FAQ page here, or contacting your accountant or trusted financial advisor.