FAQs Affirm Employee Benefits Eligible as “Payroll” for Payroll Protection Program Loans

Scheduled to be published in the Federal Register is an interim final rule issued by the federal Small Business Administration (SBA), guidance that includes frequently-asked-questions (FAQs) on Payroll Protection Program (PPP) loans available to small businesses to help them maintain their workforce during the coronavirus (COVID-19) pandemic. Businesses with no more than 500 employees—including not-for-profits and sole proprietorships—can apply for these low interest and potentially forgivable SBA loans if certain conditions are met.

The FAQs answer many potential employer questions on eligibility, calculating amount of loan available, and—especially important—what expenses qualify as “payroll” costs for purposes of the program. Similar to Treasury Department guidance previously issued and announced here, these SBA FAQs affirm that eligible payroll costs include a number of employee benefits; among them are the following.

  • Retirement benefits
  • Group healthcare coverage, including the payment of premiums
  • Payment of state and local taxes on employee compensation
  • Family, medical, or sick leave benefits