payroll cash compensation
Eligible employee cash compensation includes salary, wages, commissions, bonuses, cash tips, hazard pay, and payments to furloughed employees. It includes payment for vacation, parental, family, medical, or sick leave, and allowance for separation or dismissal. It excludes any qualified wages used to determine the Employee Retention Credit, Families First Coronavirus Response Act (FFCRA) qualified sick or family leave tax credits and annualized employee cash compensation over $100,000 prorated over the Covered Period.
You can use the IRS Form 941 and the state quarterly payroll tax and unemployment reports OR the equivalent payroll processor reports to calculate the eligible payroll costs. I recommend using the payroll processor reports because it helps to identify issues such as employee cash compensation caps, rate changes and other changes.
Most payroll providers will have reports specifically for PPP loan forgiveness. These payroll reports should include the start and end dates of the selected Covered Period. It should list each employee’s cash compensation, including their pay rate and hours paid, as well as employer payroll taxes by type.
Be careful how you run your payroll reports. Payroll reports can be run by pay dates for the Covered Period date range OR by actual pay periods of the dates worked. Eligible payroll costs include both types. Includes eligible payroll costs paid or incurred during the Covered Period.