At Biz2Credit we are constantly looking for talented, enthusiastic, and self-motivated people to join our team. At the end of the 8-week coverage period, you’ll then need to determine the number of full-time equivalent employees you currently have on staff. Try for FREE! So, in this scenario, your FTE calculations might look like this: If you wanted an easier way to calculate FTE, you could also assign an FTE of 1.0 to all employees that work 40 hours or more per week and an FTE of 0.5 to employees who work less than 40 hours per week. The next step is comparing your average FTE as of the earlier of the date the loan forgiveness application is submitted or December 31, 2020 to the FTE count as of February 15, 2020. For example, a borrower with a $1,000,000 loan and a 90% FTE ratio can still obtain 100% forgiveness if their total spent is more than $1,111,111. Divide the top number by the bottom number (60 hours/40 hours = 1.5 FTE). We’re not the only people that think we’re awesome. For example, if you have a part-time worker who is paid for 20 hours per week, their FTE would be 0.5 (20 hours paid each week / 40 = 0.5). This allows the covered period FTE count to be measured at 12/31/20 and compared to the base FTE count of the pay period that includes 02/15/20. Lucky Lanes also has 10 part-time employees. The penalty for not having coverage in 2018 & earlier, Small Business Health Insurance Tax Credit, Insurance for multiple locations & businesses, Additional resources for agents & brokers, Exploring coverage options for businesses, Learn more about individual coverage HRAs, How to get covered if you're a sole proprietor. Create a pivot table showing columns of “week ending date” and rows of “employee ID” and “employee name”. Bend, Oregon 97702 If you weren’t an employer then, enter the average weekly hours for each part-time employee you expect to employ during the current calendar year. Any employees who during the Covered Period or the Alternative Payroll Covered Period (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours. Round down, and you’ll have 8 FTEs. 1. A full-time equivalent (FTE) is a measurement used to show the average hours worked by a single employee on a full-time basis. Eugene, Oregon 97401 One of the key features of these loans is that they’re forgivable if certain guidelines are followed. Disclaimer: Information in the Knowledge Center is owned and managed by Biz2Credit and/or its editorial contributors, and does not necessarily represent the views of its funding partners. If this is you, you’re in the right place. Text HELP for help. As businesses have begun to wrap up their Paycheck Protection Program (“PPP”) loan covered period or decide whether to extend a little longer, the number one question is around the full-time employee equivalent (“FTE” or “FTEE”) calculation. Not only would the funds help them keep their staff employed, but the loan was up to 100 percent forgivable if used for approved expenses (including payroll, rent, mortgage interest, and utilities). Next, write down the average amount of hours your part-time employees work each week. During the ever-changing rules around the PPP, FAQ #40 was issued to provide some relief to businesses that were unable to hire employees to fill empty roles. First, you must add all of your part-time workers together. Now that you’re signed up, we’ll send you deadline reminders, plus tips about how to get enrolled, stay enrolled, and get the most from your health insurance. The “forgiveness period”. We’re all ears! Calculate both and choose the one for the application that is more favorable to your results: Covered Period (“CP”) ranging from eight to 24 weeks beginning on the date of your loan disbursement. Every company out there has a culture, here are some ways to create a good one. Need online time and expense tracking for your employees or just for yourself? Calculating FTE is pretty simple, and most payroll providers provide PPP loan support. And how do I know if I’m maintaining my FTEs so I can qualify for loan forgiveness?”. Using the frozen data, calculate the FTE by employee using the Simplified method by writing a formula of counting each employee working 40 hours or more as 1.0 and those working less than 40 hours as 0.5. The revised loan forgiveness application clarified the cure date as the earlier of the submission date of your loan forgiveness application or December 31, 2020. Here, we’ll show you. *There are still some unknowns here on how many hours per week will count as full-time. The calculation indicates the workload of an employed person that could be comparable on similar circumstances. Loan forgiveness will not be reduced if the borrower can show documentation for one of the following: If you have questions or concerns about how this will affect you and your situation, then you should consult with your tax adviser. If your business meets the pay or play penalty then you will want to plan a way to provide benefits to your employees. Documentation of these exemptions is extremely important to support these exemptions. Now that you have identified these potential exemptions, how do you calculate the average FTE for each employee? The IRS classifies part-time workers as those who work less than 130 hours a month, or average fewer than 30 hours per week. GBQ is a tax, consulting and accounting firm operating out of Columbus, Cincinnati, Toledo and Indianapolis. So, even if you have salaried employees that work 60 hours a week, they wouldn’t equal 1.5 FTE (60 hours paid each week / 40 = 1.5) because FTE can’t exceed 1.0. The robust features and ease of use will benefit your company both inside and outside your HR team. If you employ part time or hourly workers, they may have an FTE of less than 1.0. One of the guidelines pertains to maintaining the number of employees you have on payroll, and the calculation for this is made using something called Full Time Equivalents, or FTEs. Therefore, the four part-time employees are equivalent to one and a half full-time workers. Each employee that works a 40-hour work or more a week will be counted as 1.0 FTE, whereas employees who work fewer than 40-hours are divided by 40 to calculate their FTE (i.e. Calculate both and choose the one for the application that is favorable to your results: FTEs as of February 15, 2020 (based on the pay period including this date), Average FTEs during the period 2/15/20 to 4/26/20, Number of FTEs as of the earlier of the submission date of loan forgiveness application or December 31, 2020. After that, take the total and divide it by 30, and you’ll have your part-time FTE number. Create a table to show this comparison as such: Based on this table comparison, you can decide which reference period to use (2/15/19 to 6/30/19 OR 1/1/20 to 2/29/20), as well as which FTE calculation to use (Actual or Simplified). If the number in your result is larger than or equal to 1, you have successfully maintained your headcount and you meet this requirement for loan forgiveness. So Lucky Lanes now knows that with their 8 full-time employees, and the number 5 calculated as the FTE for their part-time workers, their final FTE number, or the number of full-time equivalent employees is 13 (8+5). Using FTE calculations Review the FTE comparison chart towards the bottom of the report. This payroll would be excluded from the FTE calculation and the other payrolls would be included. If you recall prior to the PPP Flexibility Act, the cure date was June 30, 2020. Product seems cool, but who are these people? Add this number to the number of full-time employees you have, and you’re set! FTE Reduction Safe Harbor 2: This calculation is on the PPP Schedule A Worksheet and is based on whether you reduced your average FTE between February 15, 2020 and April 26, 2020, compared to the pay period inclusive of February 15, 2020. So as you can see the FTE calculation can be quite cumbersome and confusing and there are a lot of considerations to evaluate from time periods to use and applicability of safe harbor tests. The calculation for full-time employees (individuals who work 30 hours per week or more on average) is extremely easy. If you have further questions about qualifying for loan forgiveness or about PPP loans, we advise you to speak with your lender, an SBA representative, or a lawyer. Here’s everything you need to know about how to calculate full-time employees for PPP loan forgiveness: Before we jump into loan forgiveness calculations, let’s review the requirements for Paycheck Protection Loan forgiveness. On the summary tab, average the totals for each payroll period and method to arrive at your average FTE.

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