If You Make Over $100,000 the SBA-PPP Stimulus Bill Could Mean a Pay-cut or your Job

This article was last updated on March 31

Under the recently enacted $2 trillion Coronavirus stimulus bill (CARES ACT) small business owners have been afforded many provisions to help them stay in business and incentivize them to keep paying bills and their workers.

Specifically the Paycheck Protection Program (PPP) has provisions in it to provide forgivable loans for small businesses (generally less than 500 employees) that use those funds towards retaining their employees and making sure they get paid. However workers compensation at the small business’ payroll exceeding more than $100,000 per year will not be eligible for relief under the PPP meaning that small business owners won’t be able to claim the excess payroll related deduction and apply it towards loan forgiveness for those employees.

This could mean that employers choose to either cut pay for those higher paid employees or let go of the more highly compensated employees, which are generally management positions at small business.

Many who read this will complain that if someone is earning over $100,000 per year then they should be fine. But the reality is that in most large metro markets $100,000 is not that much and you will have several thousand workers at small business’ earning well above this amount. If the purpose of the stimulus was to retain employees the concern is that you could be encouraging companies to leave out, furlough or fire their most valued and senior employees in order to get the most amount of loan forgiveness and save their company under the new PPP program.

21 thoughts on “If You Make Over $100,000 the SBA-PPP Stimulus Bill Could Mean a Pay-cut or your Job

  1. Last year i made $75K with a one time bonus of $20K. Now when i’m trying to apply for the loan forgiveness in one of the reports that i need to privide looks like that i made more than $100k
    When i called the payroll company i was told that they use the max week payment to determined the salary for 2019 and they also instructed me to just present that document and should not be worry about it.
    If i’m not allow to be part of the loan forgiveness, should i just opt for the 24 weeks so i’ll be able to use only the payroll for my employee
    thanks for your reply

  2. My employer paid me $8333 twice during the pandemic and applied for the SBA loan. However, I have paid back the first payment of $8333 through my paycheck and I am still making payments to the second payment of $8333. Is that the way it is supposed to happen?

  3. For employees making more than 100K, can employers setup a new bank account specifically for PPP funds, then use those funds to pay salaries up to the maximum $8333 from that account. Then from their “normal” accounts pay the balance of the salaries and not jeopardize the forgivable loan?

    Obviously it is not the intention of the SBA for workers to take pay cuts so it seems to me this scenario would be acceptable. Of course getting employers to buy in is another story.

  4. Question: For half-time employee (0.5 FTE), is the forgivable loan amount for their compensation capped at $100,000 annualized or would it be $50,000 annualized? In other words, is the annualized cap of $100,000 per full-time employee?

  5. Can there be any loan forgiveness for an employee who made over $100K in 2019, but who is paid less than $8,333 per month for the 8 week/2month covered period in 2020? I am thinking “no,” because the 2019 salary was too high.

  6. I make over the 100,000 annually, and my company is considered essential so we are working, but not doing near the business that we would normally. My question, my employer pays me the $8333/ per month, is he obligated to pay also any commission that I have earned?

  7. My job applied for the loan, got the entire staff excited about it, now they are saying “managers” are excluded form the program. Not a set income amount either. Some of us make 65k per year some make 90k per year. Most do not clear the 100k threshold. I am a commission job with a small salary, which they cut the second this pandemic hit. Please God help me, did they use my income for the loan? Am i supposed to be getting paid? where do I find these answers??

    1. Hey, whether you are under or over 100,000, you are still covered under PPP. You wohld be capped at 100k if over. The company still has the right to lay off or pay less. They would forgoe partial loan forgiveness if they end up paying you less.

  8. I have a question that I have searched high & low and it doesn’t seem to be addressed. Our business has definitely been impacted. Our employees are basically full-time, make over $100k but the bulk is made between April – July time frame as field technical employees. They are very highly paid hourly employees. We have managed to keep them working with a ‘few’ hours working at home doing paperwork. QUESTION: Can we pay them the maximum weekly PPP amount of approximately $1,925 per week and they continue to earn the additional money working from home? We have no problem with attempting to pay 100% of the PPP money to our employees. Anything we pay will fall short of their normal annualized pay. I just don’t wish to be caught in situation having to pay back money (loan) when in good faith attempting to be an honest broker towards our employees. (don’t forget, during this period our revenue is down by the same percentage as my $100k+ employees even though they are working a ‘few’ hours from home) We are not looking to game the system. We are looking to take care of our employees while maintaining our workforce skill level and staying afloat business wise. Thank you.

  9. My employer took this loan and cut my salary to 100K for the next 8 weeks. I feel like they applied to ensure that they could employ people through the pandemic, but I don’t think that this measure was necessary from what I’m reading. I think my company was told that they HAD to do this in order to get the loan per employee. I live in a metro area where 100K doesn’t actually go very far.

  10. I made $80,000 last year. My company is trying to force me to take $875 per week instead of $1500 per week. What can I do. He is choosing to pay others a higher rate than he should and cutting mine to accomplish this.

  11. My employer, with no notice or transparency cut my salary in order to utilize $100K for the PPP loan payroll portion. Their answer was that they understand this is what they needed to do. Can you provide an answer as if they had no other choice? If there was no other choice, after June 30th would they need to return my salary to where it was? Lastly, what would a “good” employer do in this situation?

    1. They should return to your existing salary if they are good , but they may feel like keeping this permanent if you are doing the same work in 3 months. Get something in writing now to say this is only a temporary cut and goes back when things improve.

    2. the other “choice” would be unemployment and not working but receiving a max of $980 a week

  12. there’s so much blather from hustler Americans. So typical. There’s enormous misinformation and disinformation from this “article” or huckster USians trying to peddle the “free” 10K. Unreal, but typical. 100K pre-tax is rather low on either coast. That’s reality not typical US propaganda.

  13. This article is misleading, if not wrong. You can pay every employee a 1,000,00 a year and still get the loan. But the amount of the loan is limited to the first 100,000 of annual salary (divided by 12 and times 2.5).

    1. I did say the pay that was able to be offset against the loan was up to 100k. So if not a job loss then employees earning above this could be asked to take a pay cut as then their entire payroll cost could be offset against the forgivable loan.

  14. congress should be taking pay cuts whay have they really done for the last 3 yrsthat has been positive for the country?

  15. Hmm…I really feel we should all be taking a pay cut in the environment we are in. Also $100,000 gets you a long way in most states. We cannot just design programs for city dwellers and those in the Swap.

    1. I don’t think anyone should have to take a pay cut except Congress. People don’t make enough to live comfortable as it is.
      People that suggest pay cuts have too much money! You can’t take away from people that rely on there income to pay there mortgages and bills they currently have unless you are in the bankruptcy business!

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