Loan forgiveness will not be reduced if the borrower can show documentation for one of the following: If you have questions or concerns about how this will affect you and your situation, then you should consult with your tax adviser. This ratio is then multiplied by the total amount spent during the covered period to calculate the reduction in forgiveness. That being said, these calculations are used by adding your part-time and full-time employment count together. 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So, in that scenario, your FTE calculations might look like this: In addition to calculating FTE and showing that you maintained headcount after receiving your PPP loan, there are a few other factors that play into your eligibility for loan forgiveness, including: Partner with us to reach potential merchants using our patented technology on the Biz2Credit platform. For this example, we’ll examine a fictitious bowling alley called Lucky Lanes. Now that they know their part-time employees average 175 hours a week, they need to divide this number by 30. Employees who work more than 40 hours a week count as one FTE. Any employees who work less than 40 hours a week will have their hours added together to obtain their value. You can elect the option that is more favorable to you and that option must be used to calculate all FTEs for all reference periods. Message frequency varies, but you may receive up to one message per week during Open Enrollment. Next, add your full-time employee count (which is 20) with 8, and you’ll have an FTE number of 28. Step 1: Write down the number of part-time workers you have. Watch a short demo to get a feel for Eddy’s all-in-one HR software. Create a summary tab showing all time periods needed to be calculated: Column headings should show each payroll period included within that time period, Last column heading should be the average. PPP Schedule A Worksheet is not required to be submitted to the lender; however, we think it is prudent to use this worksheet to work through both the FTE calculation and Wage Reduction calculation. For an entire breakdown of those guidelines, you can read more here. FTEs are a way to measure the number of full-time hours being logged at your company. Try Timesheets.com for FREE! This allows the covered period FTE count to be measured at 12/31/20 and compared to the base FTE count of the pay period that includes 02/15/20. The IRS classifies part-time workers as those who work less than 130 hours a month, or average fewer than 30 hours per week. If your average FTE for the current period is greater than the FTEs as of February 15, 2020, no penalty applies and you passed the safe harbor test. Download each payroll register into Excel including fields of employee ID, employee name, check number, check date, week ending date, earnings code, hours, pay rate, and check amount. Final note: EddyHR is not a law firm, and the contents of this article should not be considered as legal advice. This ratio is referred to as the FTE reduction quotient. To make this even easier, we invite you to grab a pen or pencil, pull out a piece of paper, and follow along as we show you how to calculate the FTE for your part-time workers. The Cost worksheet tables allow you to modify costs as they change without modifying any cost formulas in the Workload/FTE … One thing everyone will need to know is what full-time equivalent employees are and how to calculate your FTE number. The Government Accountability Office defines an FTE as “The total number of regular straight-time hours (i.e. GBQ is a tax, consulting and accounting firm operating out of Columbus, Cincinnati, Toledo and Indianapolis. not including overtime or holiday hours) worked by employees divided by the number of compensable hours applicable to the fiscal year.” Therefore, on an annual basis, an FTE is about 2,080 hours. If you like winning and have the skills to back it up, we want to talk to you! The robust features and ease of use will benefit your company both inside and outside your HR team. If this is you, you’re in the right place. The resulting number contains a decimal point. For an entire breakdown of those guidelines, you can. Article written by: It’s also incredibly useful for business owners to stay compliant with the Affordable Care Act (ACA) or other laws. Altogether, your employees equal to 3 FTE after rounding to the nearest whole number. Before you invest too much time on calculating your average FTE, please scroll down to the safe harbor tests to determine whether Safe Harbor 1 may be applicable to you related to reduced business activity. Here’s everything you need to know about how to calculate full-time employees for PPP loan forgiveness: Before we jump into loan forgiveness calculations, let’s review the requirements for Paycheck Protection Loan forgiveness. One of the key features of these loans is that they’re forgivable if certain guidelines are followed. The important little gray area in between work and play. Sorry, that mobile phone number is invalid. | Oregon's Premier CPA & Advisory Firm, Family First Coronavirus Response Act (FFCRA): Small Business Exemption, Dental Alert! The United States Treasury hasn’t explicitly said the calculation will be based on a 30-hour week. The “forgiveness period”. Next, write down the average amount of hours your part-time employees work each week. Two options of calculating the number of FTEs are provided: (1) calculating based on actual hours worked or (2) simplified approach of using an FTE of 1.0 for employees working 40 hours or more and 0.5 for employees working less than 40 hours in a week. Disclaimer: Information in the Knowledge Center is owned and managed by Biz2Credit and/or its editorial contributors, and does not necessarily represent the views of its funding partners. Full-time employee (FTE) calculations. Round down, and you’ll have 8 FTEs. First, using the process we reviewed above, you’ll need to determine the number of full-time equivalent employees you had during one of the following time periods: A) February 15, 2019 to June 30, 2019ORB) January 1, 2020 to February 29, 2020(Note: If you’re a seasonal employer, you must use option A). Add those numbers together. If you have further questions about qualifying for loan forgiveness or about PPP loans, we advise you to speak with your lender, an SBA representative, or a lawyer.
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