By Justin Tisdale on May 30

The Payroll Protection Program (PPP) provides businesses with a forgivable loan if the proceeds are used primarily for payroll. The loan amount is based on 2.5 times that amount, to help cover eight weeks of payroll. To be forgivable at least 75% of the PPP proceeds must be used on payroll.

The first hurdle a business must jump is a staffing requirement. You must maintain the number of employees on payroll. You'll want to calculate full-time equivalent employees for:

• The 8-week period following initial PPP disbursement (A)

• February 15, 2019 to June 30, 2019 (B)

• January 1, 2020 to February 29, 2020 (C)

Take A and by B and take A and divide by C. Take the largest of number between the two calculations. Note: seasonal employers must use A divided by B.

If you calculated a 1 then you have maintained your headcount and are one step closer to PPP forgiveness. If your result is less than 1 then your PPP forgivable expenses will be reduced proportionately.

The next hurdle is a pay requirement: You must pay each employee at least 75% of their pre-COVID-19 pay. For each employee that's salary has decreased more than 25%, the eligible amount of forgiveness will be reduced by the difference between their current pay and 75% of their original pay.

If you find that you're failing one of these test don't fret. You have until June 30 to restore the employee and salary figures.