CARES Act/SBA/PPP "Payroll Cost" Definition

Finance SBA Loans
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For purposes of the covered loans, “ payroll costs ” means:

  • as to companies having employees — the sum of payments of any compensation with respect to employees that is a:
    • salary, wage, commission or similar compensation;
    • payment of cash tips or equivalent;
    • payment for vacation, parental, family, medical or sick leave;
    • allowance for dismissal or separation;
    • payment required for the provision of group health care benefits, including insurance premiums;
    • payment of any retirement benefit; or
    • payment of state or local tax assessed on the compensation of employees.

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I am afraid that those partnerships that do not recognize any of the partners’ work as salary are going to have real trouble getting their actual incomes covered. I often advocate (as does Paul) that practices distinguish between the contributions partners make as clinicians vs. what they earn as partners. This situation provides new, but significant, support for that argument.

I do wonder, however, if those benefits outlined about can be counted? I would think so. Health insurance alone is pretty strong. Oh, the irony of that realization.

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