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Your PPP loan can be used for two costs: payroll and eligible non-payroll costs. Payroll costs include the same components that were included in the application: compensation (salary, wages, tips, bonuses, etc.), payment for vacation, parental, family, medical or sick leave; allowance for separation or dismissal; employer paid Health benefits (medical, dental, vision) retirement; and Employer payment of state and local taxes assessed on compensation of employees. Eligible non-payroll costs including: mortgage interest on property that was incurred before February 15, 2020 (principal on mortgage obligations is NOT eligible); business rent obligations under a lease agreement in force before February 15, 2020; and business utility payments for which service began before February 15, 2020.
The most important component of achieving forgiveness on your loan is spending it on payroll costs. At least 60% of your loan amount must be spent on payroll to be forgiven. You can spend more than 60% on payroll if you want, but you can't spend less. Whatever you don't spend on payroll must be spent on eligible non-payroll costs.
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