Payroll after receipt of PPP Loan/Grant

There is no difference in payroll types covered by a PPP loan. The loan is just money in.  If you received it and used NONE of it for payroll the worst that can happen is you pay 1% interest over 2 years, pretty cheap funds. To be forgiven, 75% of it has to be used for payroll over the 8 weeks following funding. And you have until June 30 to rehire to the FTE level typically reported in your application but when it comes down to it, one of two short periods of your choice, neither of which follows a quarter or is even for a year.

You cannot nor should use PPP loan for National Paid Leave (which is eligible for its own almost full credit of "free" money after the fact) but you are not restricted from paying your employees at full pay to still stay home for 8 weeks. Whether you get work out of your workers is not the issue. 

MOst important, as I see it, is to segregate the days worked by paycheck running two pay runs the first week of funding and two pay runs the 8th week , using timesheet entry will not split up the pay when running a report

If the SBA later determines that our standard methods of running payroll and that we include the next 8 weekly payrolls regardless of when the work was performed (same as IRS) it won't matter, but I was a Boy Scout and our motto was Be Prepared

How do I even run payroll w/employees limited hours and PPP loan proceeds?  What hours do I input? How much do I pay employees?  Based on last years average payment per paycheck?  Where do I enter amount?

Hello, @gmom.

I know running your payroll using the PPP loan can be a bit confusing, but I'm here to help.

You can pay your employees like you regularly would using the money from the Paycheck Protection Program loan. You can also use it to pay mortgage and rent payments, utilities, and additional wages paid to tipped employees. If you have any employee's on paid leave due to COVID-19, you check out this article on how to track paid leave and sick time for the coronavirus.

I'm only a few clicks away if you have any other questions or concerns. Enjoy the rest of your week.

How should I record the deposit of the proceeds of a PPP loan?  Is it considered a liability or income in my chart of accounts?

Part of the computation of the loan amount was Net Income which is passed through to my Self-Employment Income.   So can I pay myself with the funds from PPP and will they be forgivable? 

Hello, AerialStudio. 

Thanks for stopping by the QuickBooks Community with your question. As I know, a lot of this may be confusing, but you're correct, according to the IRS, you can pay your salary with the PPP loan funds.Below I will attach a helpful fact sheet, directly from the IRS. It has a lot of helpful info on it for you to check out. 

- PPP loan fact sheet from the IRS

If there's anything else I can help you with, you can post below. I'm just a click away. 

Thank you and have a pleasant evening.