1. PPP Loan Forgiveness Help Center
  2. Forgiveness Application Questions

How does a reduction in full-time equivalent (FTE) employees affect my loan forgiveness?

Borrowers are eligible for loan forgiveness for certain expenditures during the Covered Period. However, the actual loan forgiveness amount that the Borrower will receive may be less, depending on whether the Borrower’s average weekly number of FTE employees during the Covered Period was less than during the Borrower’s chosen reference period.

The Borrower is exempt from such a reduction if they qualify for FTE Reduction Exceptions or Safe Harbors.

Note: borrowers with loans $50,000 and under do not need to incorporate FTE or salary/hourly wage reductions into their overall requested loan forgiveness amount, unless they - together with affiliates, if applicable - received First Draw PPP Loans of $2 million or more or Second Draw PPP Loans of $2 million or more.

See also: How do I calculate my FTE Reduction Quotient?

See also: Will I be doubly penalized if I had reductions in both the number of employees and in employees’ salary and wages?