If you reduced the number of employees during the Covered Period compared to your chosen reference period, you may need to reduce your overall requested loan forgiveness amount.

*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.*

First, remember you do not need to account for any FTE reductions if you qualify for FTE Reduction Exceptions or Safe Harbors outlined here. Additionally, remember you will not be doubly penalized if you had reductions in both the number of employees and in employees’ wages.

**To calculate your FTE reduction quotient if you do not meet those criteria, follow these steps:**

**Step 1**: Determine the average FTE during your chosen reference period by assigning a "1.0" for employees who worked 40 hours or more per week during that period and "0.5" for employees who work fewer hours.* Add each employee’s quotient together to determine your average number of FTE employees during your reference period.- For purposes of this calculation, the reference period is, at the Borrower’s election, either (i) February 15, 2019 to June 30, 2019; (ii) January 1, 2020 to February 29, 2020; or (iii) in the case of seasonal employers, either of the preceding periods or any consecutive 12-week period between February 15, 2019 and February 15, 2020.

**Step 2:**Determine the average FTE during your Covered Period by assigning a "1.0" for employees who worked 40 hours or more per week during that period and "0.5" for employees who worked fewer hours.* Add each employee’s quotient together to determine your average number of FTE employees during your Covered Period.**Step 3**: Calculate your**FTE Reduction Quotient**by dividing the result in Step 2 by the result in Step 1. If your quotient amounts to more than 1.0, use 1.0.

**You will multiply your forgiveness amount by this FTE Reduction Quotient to get your updated requested forgiveness amount that incorporates your FTE reductions.**

*Another way to calculate average FTE over a period of time is to calculate the average number of hours paid per week, divide by 40, and round the total to the nearest tenth for each employee. The maximum for each employee is capped at 1.0 if you use this method. If you use this method instead, you must use it consistently across all FTE calculations.