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2019 gross wages and tips paid to your employees whose principal place of residence is in the United States (based on 2019 IRS for 941s.line 5c-column 1), plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips.If you file a schedule C and have employees, You add the following to Step One: Payroll costs for self-employed individuals with employees The maximum you can get is $20,8333, if you’ve not gotten the EIDL loan. The cap makes the calculation pretty straightforward for sole proprietors and independent contractors making over $100,000. This would refinance your EIDL into your PPP Loan. The maximum you can get is $20,833, if you’ve not gotten the EIDL loan. Your average monthly payroll costs are $8,333.33 and the maximum amount of your loan in this situation would be $30,833. But let’s calculate how it would work conceptually. Additionally, the SBA has recently informed applicants that it is limiting the advance to $1,000 per employee. I’ve yet to hear of anyone getting an EIDL loan. Now Let’s say your net-self-employment income was $150,000 and you happen to have $10,000 left on your EIDL. Your average monthly payroll costs are $7,500 and the maximum amount of your loan is $18,750. Going through the steps would look like this: Let say for 2019, you had $90,000 in net profit on line 41 of your Schedule C. Step 4: Add the amount of any EDIL made between Januand Apthat you seek to refinance, less the amount of any advance.Step 2: Divide that number by 12 to get the average monthly net profit.If the amount is zero or less, you’re not eligible for the PPP. Step 1: Take your 20 Schedule C line 31 net profit (if you have not filed a 2019 return, fill out the schedule C and compute the vavlue).The new regulations have updated the steps as follows: If you’re an independent contractor or sole proprietor with no employees, the calculation is a little easier. Payroll costs for sole proprietors with no employees and independent contractors But a key element to remember is Step 3 is for your average monthly payroll costs and the total after step 5 is the maximum amount of your loan. The way you calculate your payroll costs depends on how your business is set up. Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between Januand April 3, 2020, less the amount of any “advance” under the EIDL COVID-19 loan because it does not have to be repaid.Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year. ![]() Step 1: Aggregate payroll costs from the last 12 months for employees whose principal place of residence is the United States.
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