July 23, 2020
In the webinar, there was discussion around the $100,000 maximum annual compensation and when to include it in certain calculations. I’m confused as to whether the $100,000 should be subtracted altogether or just the amount over $100,000?
Posted by Armanino Financial Advisory Team
There are two places where the $100,000 figure comes into play: payroll costs and the Salary Reduction Factor. For purposes of calculating payroll costs, you include all employees no matter what they are paid, but for those paid more than $100,000 annually you may only count gross salary paid up to $15,385 or $46,154 depending on the number of weeks during the Covered Period. Any pay over that amount will not be forgiven. For purposes of calculating the Salary Reduction Factor, you exclude those highly paid employees from the Salary Reduction calculation altogether.