How this calculator works
The Paycheck Protection Program lent small businesses 2.5 times average monthly payroll, and the loan was forgiven to the extent the money went to payroll and other eligible costs. Forgiveness required at least 60% of the forgiven amount to be payroll, which caps non-payroll costs at two thirds of the payroll claimed. This calculator applies that arithmetic together with the 2.5 times payroll maximum. It models the original programme terms; the PPP stopped accepting applications in 2021 and the loan terms, caps and forgiveness rules were changed several times, so use the figure as a historical reconstruction rather than a current offer.
Formula
Maximum loan = 2.5 × average monthly payroll. Forgivable = payroll paid during the covered period + min(non-payroll costs, 2/3 × payroll paid), capped at the maximum loan. Balance left = maximum loan - forgivable. Payment on the balance = level payment at 1% over 60 months.
Worked example
Average monthly payroll of $40,000 gives a maximum loan of $100,000. If $100,000 of payroll and $30,000 of other eligible costs were paid, the cap on non-payroll costs is $66,666.67, so both are covered and the full $100,000 is forgivable. If only $60,000 of payroll were claimed with $30,000 of other costs, forgiveness would be $90,000 and the remaining $10,000 would cost $170.94 a month at 1% over five years.
Advertisement
Frequently asked questions
Is the programme still open?
No. The PPP stopped accepting applications in 2021. This calculator reconstructs the programme terms for planning, teachable comparisons and checking historical loan amounts.
What was the payroll cap per employee?
Payroll above an annualised per-employee threshold, changed during the programme, was excluded from the calculation. Enter payroll that is already within the applicable cap.
How long was the covered period?
Between eight and twenty-four weeks, chosen by the borrower in later versions of the programme. Enter the payroll and other costs actually paid in the period you selected.
What were the repayment terms?
Loans carried 1% interest over five years for later rounds, with the first payment deferred. Amounts not forgiven had to be repaid on that schedule.