PPP. What is included in Payroll costs?
Under the Paycheck Protection Program (PPP), Payroll costs include:
1. Compensation: salary, wages, commissions, and similar
2. Cash tips
3. Vacation
4. Parental, family, medical, or sick leave
5. Allowance for separation or dismissal
6. Group health care coverage (insurance premiums) and retirement
7. State and local taxes assessed on compensation of employees
See original text below
The PPP definition of Payroll costs excludes:
1. FICA (Federal Insurance Contributions Act)
2. Employees residing outside the United States
3. Employees with an annual salary of $100,000 or more
4. Individuals who received a 1099, as opposed to a W-2
5. Qualified sick and family leave wages
See original text below
Original text of SBA’s Payroll cost definition
Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.
Is there anything that is expressly excluded from the definition of payroll costs? (Interim FAQ April)
The Act expressly excludes the following:
i. Any compensation of an employee whose principal place of residence is outside of the United States;
ii. The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary;
iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees; and
iv. Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).
You can also download a copy of the SBA FAQ here