Free PPP loan calculator. Estimate your maximum loan amount, per-employee allocation, and forgiveness eligibility based on payroll spending.
The Paycheck Protection Program (PPP) Calculator estimates your maximum loan amount and forgiveness eligibility under the SBA's PPP guidelines. Enter your number of employees, average payroll, and covered period details to determine loan size, per-employee allocation, and whether your payroll spending meets the 60% threshold for full forgiveness.
The PPP was designed to help businesses retain employees during economic disruptions. The loan amount is based on 2.5× (or 3.5× for restaurants) your average monthly payroll, with a per-employee cap of $100,000/year ($8,333.33/month). The program offers loan forgiveness if at least 60% of funds are used for payroll costs during the covered period.
The forgiveness scenarios table shows how different payroll spending percentages affect forgiveness, helping businesses plan their spending to maximize forgiveness. Per-employee breakdowns help allocate the loan across your workforce. It is useful for checking whether a payroll plan stays inside the covered-period rules before filing forgiveness paperwork, and for estimating how much funding is actually available once caps and offsets are applied. You can also compare first-draw and second-draw assumptions without rebuilding the calculation by hand. The example uses a simple full-forgiveness case, but the calculator also handles partial forgiveness scenarios and EIDL adjustments. Check the example with realistic values before reporting. Use the steps shown to verify rounding and units. Cross-check this output using a known reference case.
Understanding PPP loan mechanics — maximum amounts, per-employee caps, and forgiveness rules — is critical for small business financial planning. This calculator models the full program, including the 60% payroll threshold, EIDL advance offsets, and first vs second draw differences. It helps owners and advisers see how payroll structure affects both borrowing capacity and forgiveness outcomes before making a filing decision.
Capped Payroll = min(Avg Monthly, $8,333.33) × Employees Max Loan = Capped Payroll × Multiplier − EIDL Advance Forgiveness = 100% if ≥60% on payroll; otherwise prorated Unforgiven Balance = Loan − Forgiveness (repaid at 1% over 5 years)
Result: Max loan: $150,000, Full forgiveness eligible
Capped monthly: $60,000 (15 × $4,000). Loan: $150,000 (× 2.5). At 75% payroll spend ($112,500): exceeds 60% threshold → full forgiveness.
The PPP loan formula starts with your average monthly payroll, caps each employee at $8,333.33/month ($100K/year), multiplies by 2.5 (or 3.5 for restaurants), and subtracts any EIDL advance received. Self-employed individuals use net self-employment income from Schedule C, divided by 12, multiplied by 2.5.
The key to full forgiveness is the 60% payroll threshold. Businesses should prioritize payroll spending during the covered period. If you choose a 24-week covered period (vs. 8 weeks), you have more time to reach the 60% mark. Track spending weekly to ensure you're on pace.
PPP Second Draw required businesses to demonstrate a 25% revenue decline in any quarter of 2020 compared to the same quarter in 2019. The maximum was reduced to $2 million, and the program targeted smaller businesses (under 300 employees) with demonstrated economic impact.
First Draw: $10 million. Second Draw: $2 million. Both are calculated as 2.5× average monthly payroll (3.5× for NAICS 72 businesses — restaurants and hotels). Per-employee compensation is capped at $100,000/year.
At least 60% of PPP funds must be used for payroll costs during the covered period for full loan forgiveness. If less than 60% is spent on payroll, forgiveness is reduced proportionally.
Yes. If you maintain employee headcount and compensation levels and spend at least 60% on payroll during the 8-24 week covered period, the entire loan can be forgiven. Forgiveness is tax-free.
Salary, wages, commissions, tips, vacation/sick/parental leave, health insurance, retirement contributions, and state/local payroll taxes. Owner compensation is included but capped.
Up to 40% can be used for rent, utilities, mortgage interest, operations expenditures, supplier costs, worker protection costs, and property damage from civil unrest. Those costs still have to fit the SBA rules for the covered period and documentation requirements. If payroll drops below the 60% threshold, forgiveness is reduced even if the non-payroll spending is otherwise eligible.
Unforgiven portions become a loan at 1% interest with a 5-year maturity. Payments are deferred until after the forgiveness decision. The terms are extremely favorable.