How to Pay for PPE Expenses
July 7, 2020
July 7, 2020
As of May 28, 2021, the Paycheck Protection Program has run out of funding. You can learn more about the PPP with our COVID-19 resource hub.
The Occupational Safety and Health Administration (OSHA) requires that employers protect their workers from hazardous work environments and ensure workplace safety, which includes providing personal protective equipment (also known as PPE).
While PPE has always been required in certain industries (for example, health care or construction), the coronavirus pandemic has dramatically increased the number of businesses that need to provide personal protective equipment to their employees. As the US moves forward with reopening plans, restaurants, retailers, and small businesses of all types will need to provide adequate PPE to keep their staff and customers safe.
Originally, PPE was not considered an eligible expense under the Paycheck Protection Program, so business owners who secured PPP loans were unable to use those funds to purchase personal protective equipment for their staff. PPE was also ineligible as a business tax write offâ€”meaning business owners were having to pay for staff PPE out of pocket.
But with the recently passed Paycheck Protection Program Flexibility Act (PPPFA), PPE has joined the list of eligible non-payroll expenses, which allows business owners to allocate PPP funds to cover the cost of PPE for their employees.
This new legislation is a big win for small businesses. But like any new regulations, there are still some question marks as to how to pay for and track PPE costs in a way that maintains compliance with the PPPFA and qualifies the expenses for loan forgiveness.
According to OSHA standards, PPE is â€śequipment worn to minimize exposure to a variety of hazards.â€ť As an employer, you are required to perform a hazard assessment of your workplace, identify any potential hazards, and provide your employees with equipment that will give them personal protection from those hazardsâ€”and then train them on the proper use of PPE.
There is a variety of protection equipment that; depending on the worksite, job site, or work environment; could be considered PPE, including:
While your required PPE will depend on the needs of your general industry (for example, dental offices, dental practices, or health care facilities will require different PPE to protect their employees from a retail store, restaurant, or construction company), right now, PPE selection for all businesses revolves around securing the PPE necessary to protect their employees from COVID-19, like masks and gloves.
Now that you understand whatâ€™s considered personal protective equipment, letâ€™s jump into how to buy PPE using PPP funds.
If you want your PPE purchases to be forgivable under the Paycheck Protection Program Flexibility Act, itâ€™s imperative to keep clear records. While it remains unclear if personal protective equipment will qualify as a tax deductible business expense, business owners should track all PPE expenses as such (as part of Section 2, line 22, of the Schedule C Profit or Loss from Business IRS form).
So how, exactly, do you do that?
Protecting your employees (and your customers) is always importantâ€”but itâ€™s particularly important now, as we continue to navigate COVID-19 and its implications on the way we interact and do business. While paying for the personal protective equipment necessary to provide that protection was falling on the shoulders of business owners, the Paycheck Protection Program Flexibility Act has now given the green light to business owners to start allocating PPP funds for PPE purchasesâ€”which is a major win for your business, your employees, and your customers alike.
And now that you understand how to use your Paycheck Protection Program loan to purchase personal protective equipment for your team and your business, youâ€™re armed with the information necessary to buy PPE in a way that not only secures the equipment you need, but also ensures those purchases qualify for loan forgiveness.