July 23, 2020
In the webinar, the forgiveness calculation examples for ABC Co. and XYZ Co. included three potential forgiveness figures, of which the lowest would be the forgiven amount. Since one of these forgiveness figures was based solely on the payroll costs, does this mean that rent and utilities can never be included in the final forgiven figure?
Posted by Armanino Financial Advisory Team
This “proportionate rule” that is based solely on payroll costs is used to determine the allowable amount of non-payroll costs in situations where payroll makes up less than 60% of total spend. By “grossing up” the actual payroll costs (dividing by 0.60), the borrower is able to determine the amount of non-payroll costs — such as rent and utilities — that are allowed to be forgiven (in other words, the difference between the grossed-up total and the payroll costs themselves).