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

When are payroll costs considered paid vs. incurred?

Payroll costs are considered paid on the day that paychecks are distributed or that the Borrower originates an ACH credit transaction.

Payroll costs are considered incurred on the day that the employee’s pay is earned (i.e., on the day the employee worked). For employees who are not performing work but are still on the borrower’s payroll, payroll costs are incurred based on the schedule established by the borrower (typically, each day that the employee would have performed work).

Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered Period. Count payroll costs that were both paid and incurred only once. Include only payroll costs for employees whose principal place of residence is in the United States.