Paycheck Protection Program (PPP) Reports for Square Payroll Employers
This article is only for educational purposes and does not constitute legal, financial or tax advice. Make sure you consult a professional regarding your unique business needs.
|Please note that the Paycheck Protection Program ended on May 31, 2021. If any assistance is needed for filing PPP reports for prior quarters, we recommend to contact an accountant for additional assistance.|
The Paycheck Protection Program (PPP), a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides loans to small businesses to help cover the costs of retaining employees during COVID-19. More information about PPP loans can be found on Square Capital's website.
Your business may be eligible for a loan through the PPP and the specific information needed for your application will be determined by your lender. This article includes an overview of the program and how to gather the information you may need on Square Payroll to apply for these loans.
The PPP loan application requires your average monthly payroll (AMP) costs and average number of employees. We have facilitated the process of calculating AMP by providing you with a PPP report through Square Payroll. You may also need to provide your lender with other reports, which can often be referred to as payroll records, payroll register, payroll summaries, and other names - all which can be found on Square Payroll by creating a custom payroll report and downloading previously filed tax forms (see “Tax Filings for the PPP Application” below).
PPP Application Report
The Paycheck Protection Program (PPP), a part of the CARES Act, provides loans to small businesses to help cover the costs of retaining employees during COVID-19. The PPP application requires your average monthly payroll costs (AMP) and number of employees, among other things. We have created a report within Square Payroll to help facilitate these calculations and the application process.
Visit the History & Reports tab of your Square Payroll Dashboard.
Click Payroll Reports.
Select a date range (based on your lenders requested look back period) and the report type:
PPP Report - Payroll Costs: Provides average monthly payroll (AMP) costs and average number of employees for the selected period. Will only be available for accounts that have processed at least 1 W-2 pay run with Square Payroll.
Click Download to download a spreadsheet containing your requested details.
Runs will not appear in custom reports until the deadline to cancel the run has passed. For more information, please see Square Payroll Reports.
Note: This report is intended to provide payroll information for the purpose of applying for a loan under the Small Business Administration’s Paycheck Protection Program (PPP). The information contained herein is from Square Payroll's gross payroll records and based on information that you or your authorized administrator(s) have provided. It is reflective of tax documentation that Square has filed or will file with the IRS on your behalf. Average monthly payroll costs are calculated based on the language of the CARES Act, as amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, in addition to SBA and Treasury guidance published as of January 20, 2021. Please review and confirm the accuracy of the information contained within this report. You acknowledge that you are solely responsible for the accuracy of all information you submit as part of your loan application.
PPP Forgiveness Report
Loans through the Paycheck Protection Program (PPP) may be fully forgiven if the borrower is able to show that they spent the funds on eligible expenses (including payroll, mortgage, rent, and utilities) within the given covered period (8-week or 24-week period after receiving the loan).
Through Square Payroll you are able to generate a report that calculates eligible payroll costs during the selected covered period. To download a report:
1. Visit Staff > Payroll > History & Reports of your online Square Dashboard.
2. Click Payroll Reports.
3. Select the report type: PPP Forgiveness - Payroll Costs (XLSX).
4. Choose a Covered Period Start Date for your report. The Covered Period Start Date is usually the PPP loan disbursement date, but borrowers with a biweekly (or more frequent) payroll schedule can also elect the first day of the first pay period following the PPP loan disbursement date.
5. Choose a Covered Period Length for your report, either 8 weeks or 24 weeks. The Covered Period is either the 24-week (168-day) period beginning on the PPP loan disbursement date, or if the borrower received its PPP loan before June 5, 2020, the borrower may elect to use an eight-week (56-day) Covered Period. If the start date is after June 5, 2020, you will only see the 24 week option.
6. Click Download.
Note: This report is intended to provide payroll information for the purpose of applying for loan forgiveness under the Small Business Administration’s Paycheck Protection Program (“PPP”) forms 3508, 3508EZ and 3508S. The information contained herein is from Square Payroll's payroll records and based on information that you or your authorized administrator(s) have provided. It is reflective of tax documentation that Square has filed or will file with the IRS on your behalf. The payroll costs contained in your Square Payroll PPP Loan Forgiveness Report are calculated based on the CARES Act, the Flexibility Act, and rules and guidance from the Small Business Administration and U.S. Department of the Treasury published as of November 4, 2020. Please review and confirm the accuracy of the information contained within this report. You acknowledge that you are solely responsible for the accuracy of all information you submit as part of your PPP loan forgiveness application.
Average monthly payroll calculation
You can find your average monthly payroll (AMP) costs by downloading a PPP report following the steps above. Alternatively, if you prefer, you can calculate AMP by following these steps:
Step 1: Generate and download a company totals report following the steps above. The date range should reflect the information requested by your lender and be based on your business classification as a regular, seasonal, or new business.
Step 2: Add (+) together:
Start with total “Earnings”
If any of your employees earn over $100,000, subtract (-) cash compensation over $100,000 per employee
If you’ve paid contractors, subtract (-) “Contractor hours” and/or “Contractor amount”
Add (+) total “Employer Taxes”
Subtract (-) ER Fed. Unemployment,
Subtract (-) ER Soc. Security
Subtract (-) ER Medicare
Add (+) total “ER Benefits Contributions”
Step 3: Divide (/) this number by number of months in the look back period to determine the average monthly payroll cost (e.g. if your look back period is 2019, divide your sum by 12). This should give you the average monthly payroll cost.
Step 4: Multiply (x) this number by 2.5 to determine the maximum PPP loan eligibility amount.
If applicable, add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between Jan. 31, 2020 and April 3, 2020 less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid). This will help calculate the maximum amount you may be able to borrow.
For example, let’s say you’ve paid $200,000 in total compensation to employees in 2019, none of whom have an annual salary over $100,000. Additionally, you paid $15,000 in health insurance and $7,000 in state and local taxes. You have not taken out an EIDL loan. Your calculation would like like this:
Step 1: Generate a company totals report
Step 2: $200,000 + $15,000 + $7,000 = $222,000
Step 3: $222,000 / 12 = $18,500
Step 4: $18,500 x 2.5 = $46,250 max PPP loan eligibility amount
Number of employees
You can calculate the number of employees paid by downloading a “PPP Report” following the steps above. You can also view the totals paid per employee by downloading an “Employee Totals” Report.
Note: Form 941 reports the number of employees who received wages, tips, or other compensation during that quarter. The number reported on Form 941 is based on the number of employees for the pay period which includes the following dates: Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4). This number excludes off-cycle payments and therefore may not be applicable when calculating the number of employees reported on the PPP application.
Tax Filings for the PPP Application
Annual and quarterly tax forms that were filed by Square Payroll can be found by going to Staff > Payroll > Tax Forms in Square Dashboard. This includes tax filings such as Forms 941, 940, 944, W-2, W-3, and the applicable state tax forms. Learn more about tax filings and payments through Square Payroll.
Square Payroll prepares and files tax forms electronically. Completed tax forms are stored as PDF files and may not be formatted the same way as similar forms you may find online. They do, however, provide you with all the information we file with tax agencies on your behalf. If you need federal Forms 940 or 944 formatted exactly like the tax form, you can manually transfer the information from the PDF generated by Square Payroll. To facilitate this process, please see Transfer Data from Square Payroll Tax Form PDFs to IRS Paper Forms.