PPP Loan Calculator

This tool will walk you through each piece of financial information you’ll need in order to calculate your “average payroll cost”, which is the number your loan amount will be based on.


What you’ll get:

  • A PPP loan calculator template that can be opened in Excel or Google Sheets where you can input your relevant financial information
  • A calculation of your average payroll cost multiplied by 2.5, which is needed to complete the “Loan Request” box as part of the PPP loan application

How PPP loans are calculated

Paycheck Protection Program loans are calculated using the average monthly cost of the salaries of you and your employees. But if you’re a sole proprietor, your PPP loan will calculated based on your business’ net profit.

Your salary as an owner will be defined through the way your business is taxed. If you are taxed as an LLC, your salary is directly linked to your business’ profit, and will be the amount that you paid self-employment tax on in 2019. If you are taxed as a corporation, your salary is dependent on running payroll for yourself—meaning that you must be remitting payroll taxes both federally and to the state.

The calculation itself will require you to use your annual salary, as well as the annual salary of any W2 employees whose primary residence is the United States. The PPP sets a cap on salaries of $100,000—so you should only include a maximum of $100,000 for each individual earning a salary any higher, including yourself. You can also include related payroll expenses, such as health insurance, retirement contributions, paid sick leave, vacation pay, and severance pay.

If your business existed prior to 2019, you should use your total payroll expenses from 2019, and divide the annual total by 12 to arrive at a monthly average. If your business was new in 2019, there are further nuances. If your business existed prior to June 30, 2019, you should also be using your annual payroll expenses and dividing by the 12 months of the year. For a business formed after June 30, 2019, you can choose to do the same and take your annual total divided by the 12 months, or you can instead use January 1, 2020 to February 29, 2020 and divide by those 2 months to find a monthly average.


Note: this calculator is based on our best understanding of SBA guidance, but does not constitute official legal, accounting, or tax advice. Each person should consult their accountant or attorney when making financial or legal decisions.

PPP Loan Calculator

This tool will walk you through each piece of financial information you’ll need in order to calculate your “average payroll cost”, which is the number your loan amount will be based on.

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