Believe it or not, you can’t. Well you can pay your state unemployment taxes. But you cannot pay the big piece—your 941 taxes (all the money you withhold from payroll), or your 940 taxes (federal unemployment tax), from PPP proceeds because these are neither an allowable use nor a forgivable expense. Only state unemployment taxes are considered a “payroll cost” for purposes of PPP loans. No, it doesn’t seem logical, but it’s true nonetheless.