Q: “Would employer paid holidays, such as Memorial Day, be included in the PPP forgiveness calculations – either the 8 paid hours of time off or the holiday wages paid for ‘payroll costs’?”
May 27, 2020
Answered by Aria D. Eckersley
Answer: Yes, employer paid holidays may be included in the PPP forgiveness calculation when calculating full-time equivalent (FTE) employees for forgiveness purposes. As discussed in more depth in yesterday’s post, to calculate FTEs, borrowers must divide the average number of hours paid for each employee per week by 40.
So, if an employee receives pay for a holiday, the day of that holiday will count when calculating the average number of hours paid for that particular week the holiday falls on in order to get to the overall average number of hours paid over the 8 week period. Taking Memorial Day as an example, if an employee was paid for the Memorial Day holiday on Monday, May 25, when calculating the average number of hours that employee was paid for the week of May 25, hours paid for the day of May 25 will be included in the calculation for that week – example: if the employee is normally paid 8 hours per day, 5 days per week for an average of 40 hours per work, all 40 hours would still “count” for calculating the average hours paid for the week of Memorial Day.