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Paycheck Protection Program
PPP Loan Forgiveness Application Form 3508S (revised January 19, 2021)
Amount of Loan Spent on Payroll Costs: Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll
costs incurred during the Covered Period. To calculate eligible payroll costs incurred or paid during the Covered Period, add Cash
Compensation, Employee Benefits, and Owner Compensation, as follows:
Cash Compensation: The sum of gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family,
medical or sick leave, not including leave covered by the Families First Coronavirus Response Act), and allowances for
dismissal or separation paid or incurred during the Covered Period. Do not include qualified wages taken into account in
determining the Employer Retention Credit. For each individual employee, the total amount of cash compensation eligible
for forgiveness may not exceed an annual salary of $100,000, as prorated for the Covered Period. For example, for an 8-
week Covered Period, the maximum is $15,385; for a 24-week Covered Period, the maximum is $46,154. You can only
include compensation of employees who were employed by the Borrower at any point during the Covered Period and whose
principal place of residence is in the United States.
Employee Benefits: The total amount paid by the Borrower for:
1. Employer contributions for employee group health, life, disability, vision, or dental insurance, including employer
contributions to a self-insured, employer-sponsored group health plan, but excluding any pre-tax or after-tax
contributions by employees. Do not add contributions for these benefits made on behalf of a self-employed
individual, general partners, or owner-employees of an S-corporation, because such payments are already included
in their compensation.
2. Employer contributions to employee retirement plans, excluding any pre-tax or after-tax contributions by
employees. Do not add employer retirement contributions made on behalf of a self-employed individual or general
partners, because such payments are already included in their compensation.
3. Employer state and local taxes paid by the Borrower and assessed on employee compensation (e.g., state
unemployment insurance tax), excluding any taxes withheld from employee earnings.
Owner Compensation: Any amounts the Borrower paid to owners (owner-employees (with an ownership stake of 5% or
more), a self-employed individual, or general partners). For each individual owner in total across all businesses, this
amount is capped at (a) $20,833 (the 2.5-month equivalent of $100,000 per year), or (b) the 2.5-month equivalent of the
individual’s applicable compensation in the year that was used to calculate the loan amount (2019 or 2020), whichever is
lower.
Payroll costs are considered paid on the day that paychecks are distributed or that the Borrower originates an ACH credit
transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid
during the Borrower’s last pay period of the Covered Period are eligible for forgiveness if paid on or before the next regular
payroll date. Otherwise, payroll costs must be paid during the Covered Period. Count payroll costs that were both paid and
incurred only once. Include only payroll costs for employees whose principal place of residence is in the United States. For
information on what qualifies as payroll costs, see SBA’s interim final rule posted on January 6, 2021 (86 FR 3692).
Requested Loan Forgiveness Amount: Enter the total amount of your PPP loan that is eligible for loan forgiveness. This
amount is the “Amount of Loan Spent on Payroll Costs” plus any amount spent on eligible nonpayroll costs (described below)
minus any required reductions (described below), up to the principal amount of the PPP loan.
Nonpayroll Costs: Eligible nonpayroll costs consist of:
a. covered mortgage obligations: payments of mortgage interest (not including any prepayment or payment of principal) on any
business mortgage obligation on real or personal property incurred before February 15, 2020 (“business mortgage interest
payments”);
b. covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force
before February 15, 2020 (“business rent or lease payments”);
c. covered utility payments: business payments for a service for the distribution of electricity, gas, water, telephone,
transportation, or internet access for which service began before February 15, 2020 (“business utility payments”);
d. covered operations expenditures: payments for any business software or cloud computing service that facilitates business
operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and
billing functions, or accounting of tracking of supplies, inventory, records, and expenses;
e. covered property damage costs: costs related to property damage and vandalism or looting due to public disturbances that
occurred during 2020 that were not covered by insurance or other compensation;
f. covered supplier costs: expenditures made to a supplier of goods for the supply of goods that are essential to the operations of
the Borrower at the time at which the expenditure is made, and made pursuant to a contract, order, or purchase order in effect
prior to the beginning of the Covered Period (for perishable goods, the contract, order, or purchase order may have been in
effect before or at any time during the Covered Period); and
g. covered worker protection expenditures: operating or capital expenditures that facilitate the adaptation of the business
activities of an entity to comply with the requirements established or guidance issued by the Department of Health and
SBA Form 3508S (01/21)
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