Photo of a business owner calculating how much money or tax credits she could receive from the CARES act Paycheck Protection Program.

2021 Paycheck Protection Program calculator for business owners

Updated January 20, 2021

The latest federal relief provides a crucial economic lifeline to small businesses still reeling from the impacts of COVID-19.

Principal hasn’t been alone in emphasizing how urgently businesses need this emergency assistance.

Much of the 2021 relief flows from the Paycheck Protection Program (PPP), a new Second Draw Paycheck Protection Program (PPP2), and extensions of other benefits (tax credits and deferrals).

Calculator: How big of a PPP or PPP2 loan might your business receive?

Who's eligible for an Initial PPP loan?

  • Commercial and nonprofit businesses, independent contractors, sole proprietors, and self-employed individuals.
  • You must have 500 or fewer employees. (Exceptions: For hotels, restaurants, and certain other businesses (PDF), that 500-employee limit applies per location.)

Who's eligible for a PPP2 loan?

  • Commercial and nonprofit businesses, independent contractors, sole proprietors, and self-employed individuals.
  • You must have 300 or fewer employees and experienced a drop in gross receipts of at least 25% in any one quarter of 2020, compared to 2019. Those who were in business for all of 2019 can compare annual receipts from 2020 to the full year 2019, instead of using a quarterly comparison.
  • You must have used or plan to use all your initial PPP loan on eligible expenses.

Paycheck Protection Program loan calculator

Put in your 2019 or 2020 annual expenses in each of the categories below.

Other guidelines

  • No personal guarantee or collateral is necessary, but you must affirm:
    • you need the loan because of the current economic crisis,
    • you’re not double-dipping with multiple loans to cover the same costs,
    • and that you’ll use proceeds for eligible expenses listed below under loan forgiveness section.
  • The loans are available on a first-come, first-served basis.
  • Loans can cover up to 2½ times 2019 or 2020 average payroll costs (including compensation and other specified costs). Seasonal businesses can use different time periods appropriate to their calculations.
    • For PPP2 loans, restaurants, lodging and other businesses that use a North American Industry Classification System (NAICS) code beginning with 72 can use a limit of 3½ times 2019 or 2020 average payroll costs.
  • Compensation costs are capped at $100,000 annualized for each employee, and the total initial PPP loan has a $10 million cap; PPP2 has a $2 million cap.

Calculator: How much of your Paycheck Protection Program loan might be forgiven?

  • Loan forgiveness is available for eligible costs paid or incurred during any period between eight and 24 weeks after receiving the loan.
  • Sixty percent of the forgiveness amount must be spent on payroll expenses, or the forgiveness amount will be reduced until payroll expenses equal 60% of it.
  • Up to 40% of the forgiveness amount may be spent on mortgage interest, rent, utilities, supplier costs, property damage costs, worker protection expenses, other debt service or other operational expenses over the forgiveness period.
  • Saving jobs also may save you money. Your loan forgiveness may be reduced according to the percentage (if any) by which you reduce staffing, or if you cut salaries and wages by more than 25% for employees who earn less than $100,000. (You have until the end of the forgiveness period you elect to restore full-time employment or salary for workers affected between February 15 and April 26, 2020.) See our PPP overview for more detail (PDF).

Paycheck Protection Program loan forgiveness calculator

Enter your estimated expenses and staffing adjustments for the 8- to 24-week forgiveness period you select, beginning when you receive your loan.

Employee Retention Credit for shuttered businesses

The new legislation extends and expands the credit against payroll taxes for wages paid to employees from March 13, 2020 through June 30, 2021.

  • Expands eligibility to colleges, universities, and medical or hospital providers.
  • Credit against payroll taxes equal to 70% of wages (wages up to $10,000) per employee per quarter.
  • Businesses with 500 or fewer employees: The same credit is available for all wages whether employees are working or not.
  • Businesses with more than 500 employees: The credit is available only for employees not working.

Other guidelines

  • Your business must have experienced full or partial shutdown as a result of the order to limit travel, meetings, and commerce due to COVID-19, or you lost 20% or more of your quarterly gross receipts (compared to the same quarter in 2019).
  • In addition, even businesses that received a PPP loan are eligible to claim the credit, as long as the claimed wages weren’t paid by PPP.
  • Finally, companies with 500 or fewer employees can now request an advance payment of the credit up to 70% of the average quarterly payroll for the same quarter in 2019. The Treasury will issue more guidance on how this will be implemented.

More SBA assistance

What’s next?

1 For self-employed individuals without employees and who file a Schedule C, the Paycheck Protection Program loan will be based on your 2019 or 2020 self-employment income (Schedule C line 31 net profit amount), capped at $100,000; the other inputs to this calculator will not apply.

2 For self-employed individuals who file a Schedule C, the amount of the PPP loan forgiveness is based on your 2019 or 2020 self-employment income, during the forgiveness period following the loan. If you use an eight-week forgiveness period, the forgivable payroll amount is limited to 8/52 of your net income from self-employment in 2019, up to $15,385 (the eight-week equivalent of $100,000). If you use a 24-week forgiveness period, the forgivable payroll amount is 2.5 times your 2019 average monthly compensation, up to $20,833 (which was your maximum loan amount if you have no employees). If you file a Schedule C and don’t have employees, the only expenses which may be forgiven are self-employment income (based on 2019 or 2020 self-employment income), rent, mortgage interest, utilities, operations expenses, property damage costs, supplier costs and worker protection expenses paid during the forgiveness period.

3 Enter average number of full time and full-time equivalent employees per month during the forgiveness period of the loan. (For employees let go February 15-April 26, 2020, include any number you rehired or replaced by December 31, 2020. Certain other exceptions may apply. See FAQ A-19 (PDF).)

4 Salary and wage reductions of more than 25% for employees earning under $100,000 also will reduce your loan forgiveness by the excess amount. Employees terminated February 15 - April 26, 2020, can be rehired or replaced or their salaries reinstated by December 31, 2020 to be included in calculations. Certain other exceptions may apply. See FAQ A-19 and A-20 (PDF).

5 Do not include wages paid with PPP loan proceeds that are expected to be forgiven. For companies with more than 500 employees the credit is available only for employees paid but not actually working. For businesses with 500 or fewer employees, the credit is available whether the employees are working or not.

6 This calculator assumes a credit of $7,000 per eligible employee per quarter for qualified wages and health insurance expenses from March 13, 2020, and June 30, 2021. Actual results may vary.

Calculators such as this are provided only as a general self-help tool. Results depend on many factors, including assumptions you provide. We do not guarantee their accuracy, or applicability to your circumstances. Assumed law is for illustrative purposes only and not an indication of future law. These tools are not offers, representations or warranties by any member companies of Principal.

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.