Federal tax is not excluded neither, only FICA tax
-1
https://www.sba.gov/sites/default/files/2020-04/PPP%20Interim%20Final%20Rule_0.pdfg. Is there anything that is expressly excluded from the definition of payroll costs?
Yes. The Act
expressly excludes the following:
...
iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020,
including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes,
and income taxes required to be
withheld from employees;...
https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2003%2020.pdf16. Question: How should a borrower account for federal taxes when determining its payroll costs for purposes of the maximum loan amount, allowable uses of a PPP loan, and the amount of a loan that may be forgiven?
Answer: Under the Act, payroll costs are calculated on a
gross basis without regard to (i.e., not including subtractions or additions based on) federal taxes imposed or withheld, such as the employee’s and employer’s share of Federal Insurance Contributions Act (FICA) and income taxes required to be withheld from employees. As a result, payroll costs are not reduced by taxes imposed on an employee and required to be withheld by the employer, but payroll costs do not include the employer’s share of payroll tax...