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National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

1. Anthony earns $750.00 per week. He has a cash taxable benefit of $25.00 per week. Anthony is exempt from CPP contributions. Calculate the net taxable income for the week.

2. In Block 6 of the Record of Employment, what pay period type is entered for employees who are paid salary plus regularly paid commission?

A) Irregular
B) Monthly
C) Depends on the pay period frequency
D) Weekly

3. Paula is granted a pay increase. The paperwork informing the payroll department of the pay increase is two pay periods late. What method would be used to calculate income taxes on the separate retroactive payment?

A) Lump-sum tax method
B) Retroactive tax method
C) Bonus tax method
D) Tax table method

4. Raminder was hired in January 1997. He was fully vested in the organization's pension plan at the time he received the retiring allowance. His employment was terminated on May 1, 2006 and he was paid a
$10,000.00 retiring allowance. Calculate the eligible portion of the retiring allowance.

A) $7,500.00
B) None of the retiring allowance is eligible
C) $10,000.00
D) $2,000.00

5. Which of the following situations would not require an employer to issue a Record of Employment?

A) Employee's earnings fall to 40% of their normal weekly earnings
B) A business is sold and the new owner retains all employees and payroll records with no loss of earnings
C) Employee is laid off and will not be recalled
D) Full-time employee went on 6 weeks' unpaid leave of absence

Solutions: