FPC Book questions
Tips can be counted towards the employees minimum wage
True
A nonexempt employee working at a hospital can work more than 40 hours in a week and not be paid OT
True - employees of hospitals can have their OT calculated on a 14-day work period instead of a workweek. However, if the EE has worked more than 8 hours in any day during the 14 day period, the hours over 8 must be paid at OT rate
What form must a pensioner file to have input into the amount of federal income tax witheld
W-4P
When paying supplmental wages, when must the aggreate witholding method be used ?
When no income tax is withheld form regular wages for the current or preceeding calendar year
The amount of federal income tax that is withheld from an EE regular wages is determined by a formula that uses all of the following items except
a flat rate - only when paying a supplemental wage can an ER use the optional flat rate method to calculate FIT
An emlpoyees belongs to a professional organization. When his company pays his dues, the payment is
a working condition fridge, these are tax free
All of the following types of employees are classified as exempt from FLSA minimum wage and overtime requirements except
computer repairman
All employees must complete a new form W-4 each year...
false - only EE wishing to continue an expemption must file each year
payroll tax liabiity accounts should be reconciled at least weekly
false - reconciliations should occur montly
When system-generated totals do not agree to batch control totals, what must occur?
finding the cause and correcting the error when the system is not in balanace, it must be corrected before proceeding
name two key advantages of intergrated databases
help reduce data integrity eliminate timing issues eliminate the need for sendning data from one system to another
An employer may provide all of the following features in a 401k except ?
higher benefits for highly compensated employees
An employee claims exempt from withholding on his form W-4. To continue the exempt status for the next year, a new form W-4
must be filed by Feb 15th of the following year - the exempt status falls on this date and must refile to continue the exempt period
When an employee is overpaid and the repayment occurs in the same year, the repayment requested is the EE
net overpayment
For a payment after the EE death in the year after the death, what taxes if any are witheld
no taxes
During Thanksgiving week, a nonexempt EE was piad for the following hours -0,10,10,8pto,8holiday,8pto,8 how much ot is paid?
none - OT is based on hours worked, not PTO
All of the following deferred compensation plans limit the EE to making a federral contribution of 19500 in 2021 except
nonqualfied
an EE earns 40k annually claiming single with no enteries on step 2 3 or 4 on her form w4. She contributes 6k annually on her 401k. How much tax must be witheld for federal income tax, SS and medicare on the contribution
only SS and medicare so 6000 x 6.2 = 87.00 6000 x 1.45 = 372 372 + 87 = 459 total in taxes witheld
A computerized payroll system can help a payroll department accomplish all of the following tasks expect
recognize changes in laws and regulations
Name one way payroll managers can increase security through stricter internal control of the payroll staff.
segregation of job duties rotation of personnel restricted access to the system
Which of the following employee beenfits is taxable compensation
sick pay
If a state sets the minimum wage at a rate greater than the federal minimum wage, the state minimum wage must be paid to workers in that state.
true
Required deductions must take precedence over voluntary deductions
true
Resident aliens are generally subject to the same federal tax witholdings as US citizens
true
When an EE lives and works in the same rate, the employer witholds income tax for that state?
true
The federal minimum eage is used when figuring the amount to withold for a creditor garnishment
true (unless states is higher which usually isnt the case)
Every month, all of the following records are reconciled EXCEPT:
validitiy edits monthly account reconsiliation helps validate the integrity of the information in your payroll
Checking inputs or outputs against predetermined constraints is called:
validity edit - the system automatically checks to make certain all inputs are outputs are within normally accepted ranges. If not, the operator is alerted
All of the following deductions are involuntary deductions except
wage assignemtns are voluntary deductions from EE pay
When an EE begins to receive SS benefits, the employer no longer needs to withold SS and Medicare
False
The FLSA requires that time worked on Saturday be paid at OT rates and time worked on Sunday be paid at double time rates
False - OT is determined by 40 hours in a workweek
Which of the following employee benefits is nontaxable compensation?
company vehicle business use
A voluntary deduction must be
Authorized by the employee
an employee pays 280 for parking per month to rent a spot. How much of his monthly parking is taxable
$10 - up to 270 is exluded for taxes
What taxes, if any, must be withheld from an employee's pay?
-federal income -social security -medicare -state taxes -local taxes
An employer pays semimonthly on the 15th and last day of each month. The workweek is Sunday through Saturday. Memorial day is May 31st. A nonexempt EE worked the following hours -8,8,0,0,8,8,8 -8,10,4,0,8,8,0 -8,12 How many hours of OT, if any did the EE work during this pay period ?
0 - You are only paid overtime for 40 hours in a workweek
Which is the chronological sequence for the following events associated with DD
1)Company collects EE info 2)Company creates ACH file 3)Originating financial instituion transmits data 4)Settlement through ACH 5)Employee recieves deposit in his or her bank account
If a state wage and hour law requires that a nonexempt employee be apid an OT premium when the EE works more than 8 hours in a day and the EE works the following schedule of - 5, 7, 6, 8, 10, 8, 6
10 hours - he worked 50 hours in a week
What taxes, if any, must be withheld from an independent contractor's pay who provides a TIN?
1099 EE who are provided a TIN do not have taxes withheld and must pay them on their own
In 2021, an ER must pay SS tax on employees wages up to
142,800
A firms cheif executive office is paid 9615.38 biweekly. On his form 2021 W4 he claims married filling jointly, does not complete step 2. Step 3 claims 4500 in tax credits, and in step 4 elects to have an additional 250 withheld from his pay each period. Using the % method in worksheet 1 of publication 15 T what is his bi-weekly witholding for federal income tax
1693.00 check book for steps
Use the worksheet 3 from Publication 15-T pre2020 W4 form and its wage bracket method to calculate FIT witholding on an EE weekly paycheck of $1415 - The EE is single with one allowance
195
A superintendent who is 49 years only on December 31st 2021 earns 100k. His district has a 403B plan, what is the max he can contribute to this plan before taxes in 2021
19500
How long must you hold each of the following docs ?
2 years: employee time cards, work time scheudles, 3 years: I-9, wage ang hour records, name/address/title of each EE, overtime info 4 years: proof of tax deposits, copies of quarterly tax returns, canceled checks, FLSA, IRCA, IRS SSA FUTA, W-4, total wages and tips 5 years: log of injuries on job OSHA
A waitress is paid $2.25 per hour and she recieves $255 in tips during the week. She works 40 hours a week. Do you have to alter her base pay ? Check: 7.25 x per hour = answer
2.25 x 40 = 90 90 + 255 = 345 345 / 40 = 8.62 per hour 8.62 is greater than the federal minimum wage, so her employer is allowd to reduce her cash wage to no less than 2.13 per hour
An employee was sick the last week in December. His paycheck dated Dec 31st 2021 was held for him until he returned to work on Jan 7 2022
2021 since the check date was in December
An employee's most recent pay period began on December 15th 2021 and ended on Dec 31 2021. The EE was paid on jan 7 2022. In what year are his wages earned between December 15-31 included in his taxable wages?
2022 - Wages are included in taxable income when paid on that check date
An ER provides 300 bus tickets each month, how much of this is nontaxable
270
An employee worked for 30 hours on his regular shift at 10 per hour and 16 hours on the late-night shift at 12 per hour. In addition, he earned a production bonus of 50. What is his total weekly compensation ?
30 x 10 = 300 300 + (16 x 12) = 492 492 + 50 = 542 regular pay 542/46 hours = 11.78 per hour (regular rate of pay) 11.78 x .5 = 5.89 (overtime premium rate) 5.89 x 6 hours = 35.34 premium pay for OT 542 + 35.34 = 577.34 total weekly compensation answer from book - not sure where 6 hours came from in their answer insteaad of 16
All of the following types of compensations are included in calculating an EE regular rate of pay for OT purposes except
4 hours paid but not worked
Under which type of plans are employee contributions subject to SS and medicare taxes?
401(k), 403(b), and 457(b)
determine the value using the cents per mile method based on 10k business miles and 5200 personal miles
5200 personal miles x .56 per mile = 2912 for personal use of the vehicle
What is the ER SS tax rate in 2021
6.2%
A nonexempt EE works in a state with minumum wage of 7.35 per hour, while living in a state with a minimum wage of 8.05 what is the rate that must be paid
7.35 you pay the federal rate of the state that you work in
An employee with a 2021 form w4 claims status of single/married filing separately in Step 1, does not complete step 2, claims one depentdent not a qualififty child under age 17 in step 3, and does not complete step 4. The EE earnes 1400 bi-weekly. Use the % method in worksheet 1 of publicaion 15-T to calculate witholding FIT
83.94 line 1 1,400 x 26 = 36,400 36,400 + 0 = 36,400 If the box in step 2 of form w4 is checked, enter 0 8600 if filing single, married filing separately line 2 36,400-8,600 = 27,800 adjusted annual wage amount amount from column A of step 2, checkboxed not check, single or married filing separately percentage method table - 13,900 amount from column C of step 2 same ^ - 995 percentage from column D of step 2 same ^ - 12% 27,800-13,900 = 13,900 13,900 x .12 = 1,668 1,668 + 995 = 2,663 2,663 / 26 = 102.42 line 3 amount from step 3 on the 2021 w4 form - 500 500/26 = 19.23 102.42-19.23= 83.19 line 4 additional witholding from step 4 on the w4 form - 0 0 + 83.19
All of the following types of payments are included in the regular rate of pay calcuation except
A traditional 50 dollar gift cerfiticate which the firm has paid for the past five years during the holiday season - Bonuses paid during the holiday is a gift, and may be excluded from regular rate of pay even if the EE expects it.
when must OT be paid
As soon as practically possible - overtime is to be paid with the next regular payday due to administrative reasons it can be delayed until next pay day
The integrity of the data can be verified by:
Balancing and reconciliations ensure that amounts in the system are correct
All of the following reasons are reasons payroll keeps records except
Demonstrate security of payroll: records are used to determine compliance, calculate pay, and produce reports
Which of the following events that would require an EE to fill out an amended form W-4 within 10 days of its occurance ?
EE becomes legally separated from his or her spouse who was claimed as a dependent - any changes that cause an increase in tax liability must be reported within 10 days Any reports that cause a decrease in tax liability can fill out new W-4 at any time. Death doesnt have to be reported until the next year All of these changes are the ER responsibility
A retired safety inspector for the company was rehired as a consultant when they company expanded its plant operations. The reitred EE was a natural choice, the tasks he undertook as a consultant were the same as the ones he performed before retirement. Paid monthly, he has agreed to work under the direction of his old boss until the new plant facilities are fully operational. What is his status?
Employee - consultants are generally treated as contractors. However, when an ex employee is performing the same or a similar job as before retirement/termination. It is unlikely that he or she qualifies as a 1099 after termination
Prior to beginning work for a company, a chemical engineer signed a contract stating that she agreed to work as a 1099. She performs all her duties in the company labs, where she has full access to their testing equiptment. She works under the companys direction and maintains her regular office hours. What is her status?
Employee - do not assume that the ER has fulfilled its responsibilites and is free from penalty simply by having a worker sign a contract stating he or she is an 1099. Indivduals do not have a right to waive their EE status in a contract
A receptionist has agreed to work afternoons at the company until the company can find a full-time replacement. What is the receoptionist stauts?
Employee- it doesnt matter if she is full time or part time.
Employers who provide paid vacation leave must count the hours of PTO when determining if the EE must recieve an overtime preimum when the total hours worked in a week exceed 40 ?
False - PTO doesnt count towards a work week
The FLSA requries immediate payment of an employees final paycheck upon termination
False - however, most states impose time limits governing when an employees final paycheck must be paid to the employee
Under what condtions can an EE claim exemption from witholding on form W-4
Had no tax liability last year and expects no tax liability this year - EE claiming exempt must owe no federal taxes in the prior year and the current year as no tax will be withheld
Who has the responsibility to determine if the worker is an employee or independent contractor
Hiring entity is held responsible even though IRS and SSA lay out guidelines
How can one or two-person payroll departments guard against breaches of security?
If you are in a small department, est checkpoints with other departments (for instance HR and accounting) so that no one department handles a function in it entirety
All of the following regulate payments made by DD except:
Local laws - The consumer financial protection bureau regualtion e allows the use of electronic funds transfer. Nacha provides the operational rules for EFT. State laws facilitate the payment process
An employee works 40 hours per week as a fry cook. During the week, she substitues for one of the waitresses and reports 5 per week in tips. Can her employeer over pay her 2.13 per hour?
No - the tip credit can be used to reduce the minimum wage only if the EE regulary recieves tips and documents recieving more than 30 per month in tips
An employee was recently married. The ER pays on the 15th and last day of every month. On June 10th the EE submitted a revised W-4 form. When must you change the amout of his witholding ?
On June 30th, you must report no later than the first payroll period ending on or after the 30th day from the date you recieved the amended form W-4
Which of the following is the best method of guarding against phantom EE
Physical payout - only way is to have auditors physically hand out checks to each EE and require ID
What type of pay is included in the regular rate of pay calculation?
Production bonuses - The FLSA excludes paid time off and discretionary bonuses from the regular rate of pay calculation
All of the following types of records can be combined with payroll date in intergrated system except
Purchasing - intergrated data bases include payroll, benefits, and other HR data
For a payment after the EE death in the year of the death, what taxes if any would be witheld
SS and Medicare
what taxes if any, must the salesperson employer withhold for his personal use of the company vehicle
SS tax and medicare tax only ; have to be notified by Jan 31st
When an ER stop deduction a federal tax levy from an EE wages?
The IRS issues a form 668-D
All of the following are supplemental wages except
Salary - is considered a regular wage not supplemental
An employee is married with one child. His beginning salary is 1k semimonthly. Because of his unexpected business trip, the EE fails to submit a 2021 W-4 form by his first payday. What witholding satus must the ER use for his first paycheck?
Single/married filling separately, no entries in 2,3,or 4
In what part of a 2021 form W-4 does an EE claim dependents?
Step 3
What does an ER use to calculate the amount to withold for an IRS tax levy ?
Take home pay is used to calcuate this
When using the optional flat rate method, which of the following items is considered when making the calculation
Taxable wages are only use when using this method
Which of the following is true if the EE in question 5 also recieves a 100 bonus ?
The aggreagate and flat rate methods will produce a different amount to withold Using the aggregate method and worksheet 3 the EE witholding on 1515 (1415 in regular wages and 100 bonus) is 218. That is the difference of 23 over the EE regular with holding 195 see question five) Using the flat rate, the witholding is 22% or $22 on a $100 bonus. So the witholding will be different depending on which method is used
A salesperson drives a company owned vehicle valued at 25k. In a year he logged 12k in business miles and 4k in personal miles, use the annual lease value method to calculate the value of his personal use of the vehicle
The salesperson uses the car for 75% business and 25% personal. check car value chart to pull annual lease value of 6850 so 6850 x .25 = 1712.50
An employer maintains its employee master file in computer files. Which of the following statements is true?
There is no federal requirement to update the data monthly - while records should be current no federal regulations mandate monthly updating. Its in the companies best interest to update that frequently. No backups are required. Most data (wages, occupations, hours worked must be kept for 3 years
Last week a high school teacher spent 40 hours in the classroom, worked 10 hours grading papers and was required to put in another 8 hours on saturday at the school-sponsored science fair. Under the FLSA, what overtime hours, if any, must the teacher be paid?
Time and one-half for 0 hours - teachers are exempt under the professional exemption. Only non-exempt EE must be paid OT
How long should payroll records beyond legal requirements be kept?
as long as the company needs the records
In order to setup DD of payroll, you need which 3 pieces of information
bank routing # bank acounnt # type of account savings or checkings
Name two key advantages of automated interfacing
data is entered once, reducing time labor less chance of error than with a manual system allows info to be shared on an as-needed basis more timely exchange of data between systems more accurate data exchange
What does an ER use to calculate the amount to withold for a child support witholding order?
disposable pay is required by law to determine max support witholding
All of the following issues are concerns of external auditors EXCEPT
efficienty of payroll procedures - external auditors are more concerned with truth, security, and risk to the companys well being
Payroll documentation accomplished all of the following except
ensure procedures are followed payroll management is entrusted with ensuring procedures are followed
An employer maintains the following information in its employee master file
hire date termination date payment date regular rate of pay additions/deductions from pay frequency of payment shift bonus overtime hours/pay
Name three systems that commonly need to be interfaced with the payroll computer system
human resources benefits bank checking accounts DD data collection systems time and attendance general ledger cost accounting
What are exempt employees exempt from ?
minimum wage and overtime - they must be paid a fixed salary for each workweek
Name two items that should be documented in the payroll department
payroll policies prodcedures system and software user manuals employee job descriptions file descriptions
A retail sales clerk took advantage of the companys EE discount program to purchase closed at 10% off the normal rates retail price. This service represents
qualified employee discount
If you need very rapid response time with minial lag between input and output into your computer system, look for
real-time processing these are interactive systems in which the response time is measured in milliseconds. This contrasts with batch systems, which have response time measured in hours or even day
name two features found in systems providing employee self-service
the ability to update personal data the ability to view and print pay statements the ability to view and produce W2 forms
For her 10 years of service, an EE was given a gold neckalce valued at 100. Which of the following is true?
the gift is tax free bc it is for length of service