ERC Calculator — Estimate your Employee Retention Credit
Estimate your 2020 + 2021 Employee Retention Credit in seconds. IRS-rate accurate: 50% in 2020 (annual $10K/employee cap), 70% in 2021 (per-quarter $10K/employee cap).
Canadian business? You're looking at the wrong credit — use the SR&ED calculator instead.
Your inputs
Use your 2019 average. ERC caps are per-employee, so this drives the ceiling.
2020 quarters (Q2 / Q3 / Q4)
Total quarterly W-2 wages ÷ employee count. Capped at $10K/employee/year by IRS — annual cap, not per-quarter for 2020.
2021 quarters (Q1 / Q2 / Q3)
2021 uses a $10K/employee/quarter cap (way more generous than 2020). Higher rate too: 70% vs 50%.
Optional. Health plan expenses count alongside wages for ERC — included in the same caps.
⚠ This is an estimate, not a claim.
ERC eligibility requires meeting either the operational suspension test (government order) or revenue decline test (≥50% in 2020, ≥20% in 2021 vs same quarter 2019). The calculator assumes you qualify — your CPA confirms.
Filing window: 3 years from your actual 941 filing date. For on-time filers, 2021 Q3 closed ~Oct 2024 and is no longer claimable. Late original filers, Q4 2021 recovery startup businesses, and extension filers may still have windows open. Verify your specific 941-X amendment deadline before relying on the number.
Free 15-min diagnostic. Recovery Broker walks you through every eligible quarter + handles the 941-X filing.
How the ERC works
The Employee Retention Credit is a refundable payroll tax credit created by the CARES Act in March 2020. It rewards employers who kept W-2 staff on payroll during pandemic-era operational disruption or revenue decline. The credit is claimed retroactively by filing an amended Form 941-X for each eligible quarter.
2020 rules: 50% credit on the first $10,000 of qualified wages per employee for the entire year (max $5,000 per employee). Eligible quarters: Q2, Q3, Q4 of 2020. Requires either a government-ordered operational suspension or a ≥50% revenue decline vs. the same quarter in 2019.
2021 rules (more generous): 70% credit on the first $10,000 of qualified wages per employee per quarter (max $7,000 per employee per quarter, or $21,000 across Q1–Q3). Revenue decline threshold drops to ≥20%. Eligible quarters: Q1, Q2, Q3 of 2021 (Q4 was repealed retroactively for most employers).
Qualified wages include employer health plan contributions. Most small businesses miss this — adding the health plan expense to the wage base can lift the credit 10–30%.
Filing windows — most are closed, some aren't
ERC claims are filed by amending Form 941. The IRS allows amendments for three years from the original 941 filing date. Standard windows for on-time filers:
- 2020 Q2–Q4: closed (April–July 2024).
- 2021 Q1: closed (April 2024).
- 2021 Q2: closed (July 2024).
- 2021 Q3: closed for on-time filers (October 2024).
Still potentially open: late original 941 filers (window runs from your actual filing date, not the quarter end), recovery startup businesses with extended Q4 2021 eligibility, and any business that filed an extension on the original return.
The calculator is also useful if you've already filed and want a second opinion on the claim amount, or if you're preparing for an IRS audit/withdrawal letter and need to recheck the math. Verify your specific 941 filing date with your preparer before relying on any deadline — only your actual 941 filing receipts confirm what's still open.
What this calculator does not do
This is an order-of-magnitude estimate. It assumes you qualify in the quarters you selected. It does not:
- Verify your operational suspension or revenue decline test for each quarter.
- Account for PPP loan overlap (wages used for PPP forgiveness can't double-count for ERC).
- Adjust for owner-related wages (greater than 50% owners and their family members are excluded).
- Adjust for >100 FTE rules in 2020 or >500 FTE rules in 2021 (large-employer rules restrict wages to non-working employees only).
- Pull your actual payroll data — for that, you'd run the Fruxal diagnostic with a Gusto connection, which produces a quarter-by-quarter claim package.
Further reading
ERC Look-Back in 2026: Which Quarters Are Still Open and What to Do About IRS Audit Letters →7-min read · Late-filer carve-outs, recovery startup businesses, withdrawal program math, IRS Letter 6614/6612/105C playbook.
Estimate looks promising?
A Fruxal Recovery Broker handles the full ERC review on contingency: confirms your eligibility for each quarter, pulls your payroll from Gusto, drafts the 941-X package, and coordinates with your CPA for filing. Free 15-minute diagnostic. You only pay 30% of the confirmed recovery — and only after the IRS sends the check.
Start your free ERC review3× refund commitment: if we don't find or identify 3× your engagement fee within 90 days, we refund the fee in full.
FAQ
What is the Employee Retention Credit?
A refundable payroll tax credit created by the CARES Act for businesses that kept W-2 staff on payroll during pandemic-era operational disruption or revenue decline. Claimed retroactively via Form 941-X.
Is it too late to claim in 2026?
For on-time filers, yes — the 2021 Q3 window closed around October 2024. But the three-year clock runs from your actual 941 filing date. If you filed late, you may still have weeks left. Recovery startup businesses with Q4 2021 eligibility get an extra quarter. And if you've already filed but think the claim was wrong, the calculator helps you recheck before audit response or amendment.
My CPA said we didn't qualify. Should I get a second opinion?
Often yes. Generalist CPAs apply the revenue-decline test and stop there. The operational-suspension test (government orders that limited capacity, supply chain, or hours) is qualitative and frequently missed. A 15-minute diagnostic checks both tests against your actual quarter-by-quarter operations.
What if I already took PPP?
You can still claim ERC. The rule is that wages used for PPP loan forgiveness can't also be claimed under ERC — but most businesses with significant payroll have plenty of wages beyond the PPP forgiveness amount. The math usually works in your favor.
Do health plan contributions really count?
Yes. Employer-paid health plan expenses count as qualified wages and are subject to the same per-employee caps. For a 12-person team with $500/employee/quarter in employer health contributions, that's $6,000/quarter — meaningful at the margin.