The following methodology, which is one of the methodologies authorized by the Act, will be most useful for many applicants.
Step 1: Aggregate payroll costs from 2019 or 2020 for employees whose principal place of residence is the United States.
Step 2: Subtract any compensation paid to an employee in excess of $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred.
Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
Step 5: If applicable, add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).
Slightly different calculations (primarily differing as to the documentation and treatment of eligible payroll costs) apply to independent contractors and self-employed individuals/sole proprietorships, partnerships, and farmers/ranchers.