Paycheck Protection Program (PPP) Calculator

About the Paycheck Protection Program (PPP) Calculator

The Paycheck Protection Program (PPP) Calculator is a historical reference tool for legacy PPP borrowers. It estimates loan size and forgiveness math using the published SBA PPP framework for first-draw and second-draw loans. Enter employee count, average payroll, covered period length, and payroll spending to see how the old program rules affect the result.

PPP loan size is based on 2.5× average monthly payroll, or 3.5× for certain restaurant and hospitality businesses, with a per-employee compensation cap of $100,000 per year. Forgiveness depends heavily on how much of the loan is spent on payroll during the covered period, so the calculator shows both the loan ceiling and the payroll-spend threshold side by side.

The scenarios table helps compare first-draw and second-draw assumptions, partial forgiveness, and the effect of an EIDL advance. The PPP itself ended on May 31, 2021, so this page should be used for archival understanding, legacy-loan review, or forgiveness planning for existing borrowers rather than as a live application tool.

When This Page Helps

PPP rules combined caps, multipliers, covered-period timing, and payroll-spend thresholds, so a quick hand calculation could miss a limiting assumption. This calculator keeps the loan-size logic and the forgiveness logic in one place, which makes it easier to review legacy loans and forgiveness scenarios without pretending the program is still open for new borrowing.

How to Use the Inputs

1. Enter the number of employees.
2. Enter average monthly payroll per employee.
3. Select the historical PPP first-draw or second-draw framework you want to model.
4. Set the multiplier (2.5× standard, 3.5× restaurants).
5. Enter any EIDL advance amount to deduct.
6. Set the covered period length in weeks.
7. Enter the percentage you plan to spend on payroll.

Example Calculation

Tips & Best Practices

• Use this page as a legacy-loan worksheet — the PPP ended on May 31, 2021, but forgiveness questions can still matter for existing borrowers.
• Spend at least 60% on payroll to model full forgiveness eligibility under the standard SBA threshold.
• The $100,000/year per-employee cap means the max monthly is $8,333.33.
• Restaurants qualify for 3.5× multiplier — significantly larger loans.
• Document everything — SBA requires payroll records for forgiveness.
• Unforgiven amounts are a 1% loan over 5 years — still very favorable terms.

PPP Loan Calculation Details

The PPP loan formula starts with your average monthly payroll, caps each employee at $8,333.33/month ($100K/year), multiplies by 2.5 (or 3.5 for restaurants), and subtracts any EIDL advance received. Self-employed individuals use net self-employment income from Schedule C, divided by 12, multiplied by 2.5.

Maximizing Forgiveness

The key to full forgiveness is the 60% payroll threshold. Businesses should prioritize payroll spending during the covered period. If you choose a 24-week covered period (vs. 8 weeks), you have more time to reach the 60% mark. Track spending weekly to ensure you're on pace.

Historical Second-Draw Context

PPP Second Draw required businesses to demonstrate a qualifying revenue decline and applied a lower maximum loan size than the original first-draw program. This page keeps those historical distinctions visible because they still matter when reviewing legacy PPP files or forgiveness assumptions, even though no new PPP loans can be originated.

Frequently Asked Questions

• What is the PPP loan maximum?

  Historically, first-draw PPP loans were capped at $10 million and second-draw loans at $2 million. Both used average monthly payroll times a multiplier, with certain accommodation and food-service businesses eligible for a 3.5× factor instead of 2.5×.

• What is the 60% payroll rule?

  At least 60% of PPP funds must be used for payroll costs during the covered period for full loan forgiveness. If less than 60% is spent on payroll, forgiveness is reduced proportionally.

• Can PPP loans be fully forgiven?

  Eligible legacy PPP loans can still be fully forgiven if the borrower meets the SBA forgiveness rules and submits the required documentation. This page summarizes the main payroll-spend threshold, but the lender and SBA forgiveness process controls.

• What qualifies as payroll costs?

  Salary, wages, commissions, tips, vacation/sick/parental leave, health insurance, retirement contributions, and state/local payroll taxes. Owner compensation is included but capped.

• What are eligible non-payroll expenses?

  Up to 40% can be used for rent, utilities, mortgage interest, operations expenditures, supplier costs, worker protection costs, and property damage from civil unrest. Those costs still have to fit the SBA rules for the covered period and documentation requirements. If payroll drops below the 60% threshold, forgiveness is reduced even if the non-payroll spending is otherwise eligible.

• What happens to unforgiven amounts?

  Historically, unforgiven portions remained PPP loans at 1% interest with the contractual maturity applicable to that note. Borrowers should rely on their actual loan documents and SBA forgiveness status rather than a generic summary.