QUESTION #1

The CARES Act excludes from the definition of payroll costs any employee compensation in excess of an annual salary of $100,000. Does the exclusion apply to all employee benefits of monetary value?

ANSWER

No. The exclusion of compensation in excess of $100,000 annually applies only to cash compensation, not to non-cash benefits, including:

  • Employer contributions to defined-benefit or defined-contribution retirement plans;
  • Payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums; and
  • Payment of state and local taxes assessed on compensation of employees.

(SOURCE: https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2013%2020_2.pdf)