Calculating Your PPP Loan by Entity Type

Calculating Your PPP Loan by Entity Type

  • Include 2019 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms), if any.

Permutations

If you are a Sole Proprietorship without employees, then it becomes a whole lot easier to compute. You merely calculate your monthly net profit from your IRS Form 1040/Schedule C (not your earnings). Multiply the monthly profit by 2.5 and this is your total PPP eligibility. If you are a Sole Proprietorship with employees, then you need to do the same as the steps above, by calculating the wages and tips paid to all employees, including benefits.

S-Corp and C-Corps will follow a similar process to partnerships. Though there are some technical differences, you mainly just have to calculate the wages and employee contributions, (from the relevant forms), divide it by 12, and multiply it by 2.5 to get your total PPP eligibility.

Obviously, there is no need to include any partner earnings, there being no partners involved in this shareholder-owned legal entity.