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

How do I know if I reduced salary/hourly wages for an employee by over 25%?

To determine if pay was reduced more than 25% for an employee:

  • Step 1. Determine the employee's average annual salary or hourly wage during Covered Period
  • Step 2. Determine the employee's average annual salary or hourly wage during the most recent full quarter before the Covered Period
  • Step 3. Divide the value entered in Step 1 by the value entered in Step 2
  • Step 4. If the value in Step 3 is 0.75 or more, you did not reduce this employee's pay by more than 25% and do not need to account for them in your reductions. If the value in Step 3 is under 0.75 you did reduce this employee's pay by more than 25% and will need to account for them in your reductions calculation.