US Paycheck Protection Program (PPP) Loan Forgiveness Calculator (historical)
Estimate the forgivable portion of a historical PPP loan. This tool provides an estimated forgivable amount based on user input and a conservative, explanatory methodology. It is for informational purposes only and does not constitute legal, tax, or accounting advice.
- Page updated:
- Jun 10, 2026
- Tool version:
- v1.2.0
Overview
Estimate the forgivable portion of a historical U.S. Paycheck Protection Program (PPP) loan from your eligible payroll and non-payroll costs. Forgiveness is the smallest of: your modified eligible costs, the loan amount, and the cap that keeps payroll at 60% of forgiveness.
The PPP was a temporary COVID-19 relief program; the forgiveness application window has closed for most borrowers. This tool is for informational and reconciliation purposes only and is not legal, tax or accounting advice.
Results
Modified eligible costs (after FTE/wage quotient)
$110,000.00
60%-payroll forgiveness cap
$133,333.33
Estimated forgiveness amount
$100,000.00
Amount to repay (not forgiven)
$0.00
Forgiven share of the loan
100 %
How to read the result
- What it means
- The displayed value is an estimate based on your inputs. It represents the calculated scenario under current assumptions, not a guaranteed amount.
- Next step
- Use the result as a starting point. Adjust parameters to compare scenarios and validate with a professional when needed.
- Calculation limits
- The model uses simplified formulas and cannot account for all variables in your specific case (local regulations, personal conditions, temporal changes).
Methodology
PPP forgiveness (per SBA Form 3508) is the smallest of three figures:
- Modified eligible costs = (eligible payroll + eligible non-payroll) × the FTE/wage reduction quotient. The quotient (0–1) reflects reductions in full-time-equivalent headcount and any salary cuts over 25%; safe harbours could restore it to 1.00.
- The PPP loan amount — forgiveness can never exceed the principal.
- The 60% payroll cap = payroll costs ÷ 0.60. At least 60% of the forgiven amount must be payroll, so if non-payroll costs are high, total forgiveness is capped here.
Forgiveness amount = min(modified total, loan amount, payroll ÷ 0.60). Amount to repay = loan − forgiveness (at the program's 1% interest over the remaining term).
Assumptions and limitations: a simplified model; eligible payroll is subject to per-employee compensation caps (e.g. $100,000 annualised) not enforced here; non-payroll categories must meet SBA eligibility; the FTE quotient and safe-harbour tests are entered as a single factor rather than computed. For historical reference only.
Sources: U.S. Small Business Administration (SBA) PPP loan forgiveness guidance and Form 3508 — see citations.
Glossary+−
- Paycheck Protection Program (PPP)
A temporary U.S. COVID-19 relief program offering forgivable loans to help businesses keep workers on payroll.
- Covered Period
The window (8–24 weeks) after loan disbursement during which spending counts toward forgiveness.
- 60/40 Rule
The requirement that at least 60% of the forgiven amount be spent on payroll costs.
- FTE Reduction Quotient
A factor reducing forgiveness in proportion to cuts in full-time-equivalent employees, subject to safe harbours.
- Eligible Non-Payroll Costs
Qualifying rent, covered utilities, mortgage interest and certain operational costs that count toward forgiveness, up to 40%.
Key takeaways
Enter the loan amount, eligible payroll and non-payroll costs and a reduction quotient to estimate forgiveness as the smallest of modified costs, the loan and the 60% payroll cap.
Historical reference only — excludes per-employee caps and computed FTE tests. See SBA Form 3508 guidance.
Related calculators
Useful links
Worked examples
Example: $100,000 loan, $80,000 payroll, $30,000 non-payroll, no reduction
A borrower with payroll comfortably above 60% of costs and full headcount retained.
Interpretation
The loan is fully forgiven because eligible costs exceed the loan and payroll is well above 60%. If non-payroll had dominated (e.g. payroll only $50,000), the 60% cap of $83,333 would limit forgiveness.
Frequently asked questions
Is the PPP still accepting forgiveness applications?
The PPP was a temporary COVID-19 program and the forgiveness window has closed for most borrowers. This calculator is for historical reference and reconciliation only.
What is the 60/40 rule?
At least 60% of the forgiven amount must be spent on payroll. If non-payroll costs are large, forgiveness is capped at payroll ÷ 0.60 so the 60% threshold is met.
What is the FTE reduction quotient?
A factor (0–1) reducing forgiveness for cuts in full-time-equivalent staff or salaries reduced more than 25%. Safe harbours for restoring staff/wages by set dates could bring it back to 1.00.
Are per-employee caps applied?
Not in this simplified tool. Eligible payroll per employee was capped (e.g. $100,000 annualised, prorated to the covered period). Enter payroll already adjusted for those caps.
Sources & references
- SBA — PPP loan forgiveness: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-loan-forgiveness
- SBA — PPP Loan Forgiveness Application Form 3508: https://www.sba.gov/document/sba-form-3508-ppp-loan-forgiveness-application-instructions-borrowers
- U.S. Treasury — PPP resources: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-businesses
Quality & oversight
- Author
- Ugo Candido, MBA
- Maintained by
- Ugo Candido, MBA
- Page updated
- Jun 10, 2026
- Tool version
- v1.2.0