Paycheck Protection Program
PPP Loan Forgiveness Application Form 3508S
SBA Form 3508S (10/20)
Page 2
(not the Alternative Payroll Covered Period) wherever there is a reference in this application to “the Covered Period” only.
In no event may the Alternative Payroll Covered Period extend beyond December 31, 2020.
To calculate eligible payroll costs incurred or paid during the Covered Period or the Alternative Payroll Covered Period,
sum Cash Compensation, Employee Benefits, and Owner Compensation, as follows:
Cash Compensation: The sum of gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family,
medical or sick leave, not including leave covered by the Families First Coronavirus Response Act), and allowances for
dismissal or separation paid or incurred during the Covered Period or the Alternative Payroll Covered Period. For each
individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of
$100,000, as prorated for the Covered Period. For an 8-week Covered Period, that total is $15,385. For a 24-week Covered
Period, that total is $46,154 for purposes of this 3508S. You can only include compensation of employees who were
employed by the Borrower at any point during the Covered Period or Alternative Payroll Covered Period and whose
principal place of residence is in the United States.
Employee Benefits: The total amount paid by the Borrower for:
1. Employer contributions for employee health insurance, including employer contributions to a self-insured,
employer-sponsored group health plan, but excluding any pre-tax or after-tax contributions by employees. Do not
add employer health insurance contributions made on behalf of a self-employed individual, general partners, or
owner-employees of an S-corporation, because such payments are already included in their compensation.
2. Employer contributions to employee retirement plans, excluding any pre-tax or after-tax contributions by
employees. Do not add employer retirement contributions made on behalf of a self-employed individual or general
partners, because such payments are already included in their compensation, and contributions on behalf of owner-
employees are capped at 2.5 months’ worth of the 2019 contribution amount.
3. Employer state and local taxes paid by the borrower and assessed on employee compensation (e.g., state
unemployment insurance tax), excluding any taxes withheld from employee earnings.
Owner Compensation: Include any amounts paid to owners (owner-employees, a self-employed individual, or general
partners). For a 24-week Covered Period, this amount is capped at $20,833 (the 2.5-month equivalent of $100,000 per year)
for each individual or the 2.5-month equivalent of their applicable compensation in 2019, whichever is lower. For an 8-
week Covered Period, this amount is capped at 8/52 of 2019 compensation (up to $15,385).
Payroll costs are considered paid on the day that paychecks are distributed or the Borrower originates an ACH credit
transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but
not paid during the Borrower’s last pay period of the Covered Period (or Alternative Payroll 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 (or Alternative Payroll Covered Period). For each individual employee, the total amount of cash compensation
eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the Covered Period. Count payroll
costs that were both paid and incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule
on Paycheck Protection Program posted on April 2, 2020 (85 FR 20811
), as amended by the Revisions to First Interim Final
Rule, posted on June 11, 2020 (85 FR 36308)). Include only payroll costs for employees whose principal place of residence
is in the United States.
2. Eligible nonpayroll costs. Nonpayroll costs eligible for forgiveness consist of:
(a) covered mortgage obligations: payments of mortgage interest (not including any prepayment or payment of principal)
on any business mortgage obligation on real or personal property incurred before February 15, 2020 (“business mortgage
interest payments”);
(b) covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in
force before February 15, 2020 (“business rent or lease payments”); and
(c) covered utility payments: business payments for a service for the distribution of electricity, gas, water, telephone,
transportation, or internet access for which service began before February 15, 2020 (“business utility payments”).
An eligible nonpayroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or
before the next regular billing date, even if the billing date is after the Covered Period. Eligible nonpayroll costs cannot
exceed 40% of the total forgiveness amount. Count nonpayroll costs that were both paid and incurred only once.
