COVID-19 Reports for CARES Act PPP Loan Calculation

This guide will provide information on the reports available in Namely Payroll to help you with your calculations to apply for the Paycheck Protection Program, an SBA loan program offered in conjunction with the CARES Act.

Congress recently passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in an effort to provide financial relief to businesses and individuals. The act affords businesses the opportunity to apply for the Paycheck Protection Program (PPP), which is a loan administered by the Small Business Administration (SBA.)

The Paycheck Protection Program application requires data that is stored in Namely - specifically, the calculation of two and a half times your organization's monthly payroll costs. We have created three reports that you can use to complete your application. 

Note: If you receive a PPP loan, your organization will become ineligible for Employee Retention Credits. You may leverage those credits until the loan is approved. If your PPP loan is forgiven at the end of the eight-week loan period, your organization will become ineligible for Employer Social Security tax deferrals from the date of forgiveness onward. Please advise Namely if your loan is forgiven so that we can resume collecting employer Social Security. If the loan is not forgiven, you may continue to leverage both programs.


STAY UP TO DATE:

Always stay up to date with COVID-19: Consolidated Appropriations Act Updates for 2021.

 

Instructions for running the reports

All three reports - SBA Loan - In Business 2019 - Seasonal, SBA Loan - In Business 2019 - Not Seasonal and SBA Loan - Not In Business 2019 - are available under Excel Reports and CSV Reports in the Date Range reports section of Namely Payroll. The next section explains when each report should be used.

  1. Click Reports > Date Range, and select the date range applicable for your organization’s loan application.

  2. Download one of the three reports that best suits your organization, based on the criteria detailed in the next section.

  3. Review the report to ensure all applicable earnings are captured. There are a number of earning types that are not included on these reports, detailed below. 

  4. If you need to add any earnings to the report, click Reports > Date Range, and download the Excel version of the Payroll Register for the same date range.

  • For example, if you are running an SBA loan report for January 1, 2019, through December 31, 2019, you will want to use that same date range for your Payroll Register.

  1. Add the missing wage columns from the Payroll Register into your SBA Loan Report.

 

Reports per Company Type

  1. SBA Loan - In Business 2019 - Seasonal 

    • Criteria: Your organization was in business as of February 15, 2019, and is a seasonal employer.

    • Description: The loan amount equals 2.5 times the average total monthly payroll costs (not to exceed $10 million) incurred during the twelve-week period that’s decided by the loan recipient, starting on February 15, 2019, or March 1, 2019 and ending June 30, 2019.

  2. SBA Loan - In Business 2019 - Not Seasonal 

    • Criteria: Your organization was in business as of February 15, 2019, and is not a seasonal employer.

    • Description: The loan amount equals 2.5 times the average total monthly payroll costs (not to exceed $10 million) incurred during the twelve-month period based on the loan request date.

  3. SBA Loan - Not In Business 2019 

    • Criteria: Your organization was not in business as of February 15, 2019, and is not a seasonal employer.

    • Description: The loan amount equals 2.5 times the average total monthly payroll costs (not to exceed $10 million) incurred during January 1, 2020, through February 29, 2020.

Disqualifiers

Please note, if any of the following circumstances apply to your organization, the data in this report would not necessarily reflect the information required in the SBA loan application, as Namely would lack sufficient data to determine your average monthly payroll costs.

  1. If you processed your first payroll with Namely with a first check date of April 1, 2019, or later.

    • We need your per pay period data from the lookback period to determine monthly costs. We upload quarterly data during implementation for any quarter that has closed to ensure accuracy and to match Form 941, so we would not have per pay period data on file. 

  2. If you processed your first payroll with Namely in 2019 or 2020, but came from a Professional Employer Organization (PEO) or Certified Professional Employer Organization (CPEO.)

    • We would be missing some of your year to date payroll data, as it would have been filed under a different FEIN.

 

Instructions for reading the reports

  1. In the Total EE Wages column of each report, you'll find the reportable wage totals for each employee, which has a total date range sum at the bottom of the report, labeled Wage Total. 

  2. At the bottom of the report, you'll also find fields labeled ER Tax Total and ER Deduction Total, which are the sums of all included employer taxes and employer deductions, respectively.

  3. Finally, you'll find a field labeled Average Monthly Payroll Costs, which is the sum of Total EE Wages, ER Tax Total, and ER Deduction Total, divided by twelve, which is your average monthly payroll cost calculation. The following section details what is included and excluded in the report's calculation of your organization’s payroll costs.

 

What are Payroll Costs?

Next, we'll explain which fields are included and excluded in the reports as Payroll Costs. 

Included in Payroll Costs

  1. Regular employee salary, wages and commissions

  2. Payment of cash tips

  3. Payment of vacation, with the standard Namely vacation earning code, vacation hour benefits, or a custom code with the name "Vacation” or “PTO”

  4. Parental, family medical or sick leave, or third party sick pay

  5. Allowance for dismissal or separation (severance)

  6. Payment required for group health benefits (including insurance premiums, such as employer contributions to Section 125 medical costs)

  7. Employer payment of retirement benefits, such as 401(k) or 403(b)

  8. Employer state or local payroll taxes, such as SUI.

 

Excluded from Payroll Costs

  1. Compensation of an individual person is capped to $100,000 in the Total EE Wages column of each report

  2. Federal employment taxes imposed or withheld, such as FUTA or employer FICA

  3. Railroad retirement taxes or income taxes 

  4. Compensation to an employee whose principal residence is outside of the United States. (Note, the reports automatically exclude employees with Home Addresses in payroll that are not in the United States)

  5. Qualified sick leave allowed under Section 7001 of Families First Coronavirus Response Act, which translates to the following earning codes:

    • Federal Paid Medical Leave (type 1 through 3)

    • Federal Paid Medical Leave (type 4 through 6)

  6. Qualified family leave allowed under Section 7001 of Families First Coronavirus Response Act, which translates to the following earning code:

    • Federal Paid Family Leave

  7. Earnings that are not mentioned in the “Included as Payroll Costs” section above

  8. All wages paid to a 1099 employee 

All other earnings are excluded in the calculation of these reports, because the calculation is for monthly payroll expenses, which wouldn’t necessarily include all ad hoc or customized earnings. In short - these earnings are not necessarily paid out each payroll, and thus, not necessarily attributed to monthly payroll costs. You'll notice the following disclaimer in the footer of each report:

This report includes standard Namely codes that correlate to the description of payroll costs contained in Paycheck Protection Program guidance issued by the U.S. Treasury Department on April 2, 2020. It does not include custom codes that a client may have created for other forms of taxable compensation that may or may not qualify as payroll costs under the Paycheck Protection Program. This report is not, and should not be relied upon, as a comprehensive calculation of payroll costs under the Paycheck Protection Program.

If you would like to add any missing earnings to the report, please follow the instructions outlined above.
 

Additional SBA Loan Reports

The loan application additionally requests you to report on the number of terminations your company has had over a certain period of time. We've created a report which allows you to view all employees who have been terminated over a particular date range, to address this portion of the application. 

In Namely Payroll, go to Reports > Date Range, and select the date range that would apply for your organization’s loan application. Then, download the SBA Loan - Termed Employees report, which is available under both Microsoft Excel Reports and CSV Reports, using the date range that applies to your organization.
 

FAQs

Can Namely regenerate any of these reports to include custom earning codes that I want to be included?

These reports capture standard earning codes - if you have any custom earning codes that need to be added, please follow the instructions above for details on how to add them to your report. 

Which report do I use for my organization?

We have developed three different reports to accommodate different organizations - however Namely does not provide legal, accounting, or tax advice. Please consult with professional counsel for any tax, accounting or legal questions to ensure you're capturing the proper data for your application. 

Why aren’t any of my custom earnings included in this report?

All other earnings are excluded in the calculation of these reports, because the calculation is for monthly payroll expenses, which wouldn’t necessarily include all ad-hoc or custom earnings. These earnings are not necessarily paid out each payroll, so they may not necessarily be attributed to your monthly payroll costs.

I started processing my payroll with Namely starting in April of 2019, and I was not previously with a PEO. Why would this report not work for my organization?

We need your per pay period data from the lookback period to determine monthly costs. We upload quarterly data during implementation for any quarter that has closed to ensure accuracy and to match Form 941, so we would not have per pay period data on file. 

Will Namely be able to assist us with the process of applying for government loans?

As a payroll provider, we are a repository for much of the data required in the loan application, and can assist by providing data in a report. Namely cannot assist in the application process - and we do not provide legal, accounting, or tax advice. Please consult with professional counsel for any tax, accounting or legal questions.

 

Is there a resource where we can find out more information about loans administered by the Small Business Administration (SBA) and U.S. Chamber of Commerce?

Yes - please refer to the COVID-19 portion of the SBA website and U.S. Chamber of Commerce website for more information.

If we receive a loan from the SBA, are we also eligible for employee retention tax credits?

No - receipt of the SBA loan disqualifies you from any further employee retention tax credits. 

If we receive a loan from the SBA, are we also eligible for employer Social Security tax deferrals?

Yes, you are eligible for the twenty-four-week loan period - however - if the loan is forgiven, you are no longer eligible for the deferral, from the date of forgiveness onward.

If we are rejected or are deemed ineligible for the SBA loan, are we eligible for employer Social Security tax deferrals or employee retention credits?

Yes - you would remain eligible for both programs.
 

If we receive a loan from the SBA, are we also eligible for state tax deferrals?

Yes - if you receive a loan from the SBA, you may still defer participating state taxes.