Our 4/6/2020 Bulletin Release yesterday outlined points concerning the $100,000 Cap on Annual Compensation per employee. This issue continues to get substantial attention concerning what is to be included. The Treasury Department issued FAQs on their website yesterday providing additional clarification on this issue. See https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequenty-Asked-Questions.pdf
According to this latest Treasury guidance, the $100,000 cap on annual compensation per employee does not include the additional non-wage benefit expenses. Those non-wage benefit expenses are added includible in addition to the $100,000 salary/wage cap per employee. The following is our revised bullet point as per this Treasury guidance.
$100,000 Cap on Annual Compensation – The $100,000 cap on annual “compensation” per employee DOES NOT INCLUDE retirement plan & health benefits PAID on behalf of that employee and state & local payroll taxes (generally state unemployment taxes) paid on that employee’s compensation. Anyone who may have compiled their PPP loan request data based on our bulletin from April 6th should revisit that data and include benefits and taxes in addition to the wage/salary cap per employee of $100,000 so that the total compensation amount for any employee does NOT exceed $100,000 salary/wages PLUS all of these costs.
We apologize for the confusion. We are working continuously to provide you with information and guidance which continues to evolve daily.
Let us know if you have any questions.
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