How is PPP loan amount calculated?
Sources:
The PPP (Paycheck Protection Program) loan amount is typically calculated based on your average monthly payroll costs. According to in an episode of , businesses can receive a loan amount that is two and a half times their average monthly payroll costs, including a few other expenses 1.
For self-employed individuals, the loan amount is calculated differently. As explained by a guest on the same podcast, it is based on the net profit reported on your 2019 Schedule C. Specifically, you take your 2019 net profit, divide it by 52, then multiply it by 8 to get the forgivable amount of the loan 2. This method allows self-employed individuals to get loan forgiveness even if their net income for 2020 is low or zero.
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