CPP Payroll

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What is the meaning of the term "compensable time"?

"compensable time" is defined as all hours during which the employee is under the employer's control, even if the time is unproductive, so long as he time is spent for the employer's benefit.

Group term life calculated per ______/month

$1000

What is the maximum amount that can be excluded from gross income under the foreign earned income exclusion?

$101,300

One was personal use of company provided vehicle commuting exclusion

$11.50

Adoption limit

$13,460

Maximum exclusion for qualified adoption expenses?

$13,460

Deferered comp 401k 403b under 50

$18000

What is the federal minimum wage for tipped employees?

$2.13

Qualified bicycle commuting reimbursement per month?

$20

Tip income is subject to federal income tax withholding and social security, Medicare and FUTA taxes if the employee reports more than ____ in tips per month

$20

Minimum amount that can be withheld on W4S

$20 (W-4s is sick pay)

Company provided vanpool or public transit pass limits

$255

Parking near work or commuter parking limit

$255

Parking limit or Transit Pass limit

$255 per month; No cash advance. Reimbursement only. If employer has to pay 1% or greater or $15 fee, you can have the EE buy directly

FSA Limit

$2550

annual compensation limit (401k)

$265,000 (page 4 110)

A computer professional must be paid what per hour to be exempt from OT requirements?

$27.63

what is the minimum wage that hourly paid computer professionals must be paid to be exempt from overtime requirements of the FLSA

$27.63

round trip personal use of company provided vehicle commuting exclusion?

Barbara is an hourly paid employee making $7.48 per hour. She is scheduled to work 35 hours a week. For the past week, Barbara worked 43 hours. Under FLSA, what is he minimum she must receive as gross pay?

$332.86

Opportunity wage (workers under 19 for first 90 days)

$4.25

Qualified plan awards. The average cost of all plan awards must not exceed______.

$400 after 5 years

what is the maximum amount of an employer provided group term life insurance policy that can be excluded from an employee's income?

$50,000

FSA that can be carried over to the next year

$500

Dependent care assistance exclusion cannot exceed

$5000

Educational assistance, non job related exclusion

$5250

Independent contractors paid more than $______ must be provided with a 1099M

$600

Deferred comp 401k 403b over 50

$6000

Federal minimum wage

$7.25

Using the 2016 percentage method withholding tables, calculate the employee's withheld federal income tax based on the following data: ' Weekly pay frequency Vacation earnings: $360.62 Regular compensation: $239.38 401(k) pre-tax deferral: $48.50 Married, 0 allowances (A) $40.28 (B) $22.25 (C) $67.33 (D) $30.96

(A) $40.28 $360.62 + $239.38 - $48.50 = $551.50 $551.50 - $521 = ($30.50 X 15%) + $35.70 = $40.28

An employee is terminated with 3 workdays remaining in a month. The employee earned an annual salary of $24,000 and was paid semimonthly. What is the regular compensation due this employee for the final pay period? (A) $723.07 (B) $782.61 (C) $800.00 (D) $869.57

(A) $723.07 ($24,000 ÷ 24) - (($24,000 ÷ 260) x 3) = $723.07 SEE SECTION 2.6-4

Under the FLSA, how long are employers required to keep records relating to wages, hours, and conditions of employment? (A) 3 years (B) 4 years or until the file is no longer active (C) 7 years (D) permanently

(A) 3 years

During 2016, an employee worked for company A and quit after earning $120,000. Later in the same year the employee was hired by company B. With respect to social security, Medicare and FUTA, how should company B treat the employee's earnings as of the first wage payment? (A) Start accumulating social security, Medicare, and FUTA wages, and withhold both social security and Medicare taxes. (B) Start accumulating Medicare wages only, and withhold only Medicare tax. (C) Start accumulating social security, Medicare, and FUTA wages, but withhold Medicare tax only. (D) Start accumulating Medicare wages only, but withhold both social security and Medicare taxes.

(A) Start accumulating social security, Medicare, and FUTA wages, and withhold both social security and Medicare taxes.

The KEY difference between user guides and payroll policies and procedures is: (A) User guides focus on tasks associated with automated tools. (B) Payroll policies and procedures set company policies and standards. (C) User guides help payroll personnel interpret company policy. (D) Payroll policies and procedures permit human resources to design new compensation and benefits programs.

(A) User guides focus on tasks associated with automated tools.

On what form must mistakenly paid wages, for which no repayment is made, be reported? (A) W-2 (B) W-4 (C) 1099-R (D) 1099-MISC

(A) W-2 SEE SECTION 8.8-3

Which of the following factors provides system security? (A) access level authorizations (B) shared passwords (C) conducting "physical payouts" (D) segregation of duties

(A) access level authorizations

A report has been requested that is NOT a standard report from the system. This type of report is called a(n): (A) ad-hoc report (B) integrated report (C) batch system report (D) edit report

(A) ad-hoc report

How often are Form 940 taxable wages reported? (A) annually (B) semi-annually (C) quarterly (D) monthly

(A) annually

Under the FLSA, a workweek is defined as: (A) any 7 consecutive 24-hour periods (B) Sunday through Saturday (C) a minimum of a 40-hour/5-day time frame (D) stated in a collective bargaining agreement

(A) any 7 consecutive 24-hour periods

Techniques for conducting periodic physical payouts: (A) are the same for all employees (B) vary by whether the employee is paid by check or direct deposit. (C) vary for some employees such as telecommuters , (D) vary by wage class and compensation level ·

(A) are the same for all employees

What is the payroll department manager responsible for in a company with strong internal controls? (A) assuring segregation of duties in the department (B) developing company policy (C) initiating payroll transactions (D) writing the internal audit transaction test plan

(A) assuring segregation of duties in the department

The process of balancing multiple time sheets within a specified pay period utilizes a procedure known as: (A) batch totaling (B) exception reporting (C) system documentation (D) renciliation

(A) batch totaling

One reason many companies use a Zero Balance Checking Account is that: (A) cash is available for investment until items are presented for payment at the company's bank. (B) funds do not have to be deposited until the employee cashes the check (C) the company receives interest on the account (D) bank reconciliations are not required

(A) cash is available for investment until items are presented for payment at the company's bank.

One employment data element in the masterfile is: (A) hourly rate of pay (B) marital status (C) birthdate (D) occupation

(A) hourly rate of pay

The BEST reason for tracking pay-related problem statistics is to enable Payroll to: (A) identify root causes and take actions to prevent similar recurrences (B) apologize to clients in a more professional manner (C) direct problems to those who caused the problem (D) justify more resources to handle more problems

(A) identify root causes and take actions to prevent similar recurrences

Which of the following authorities dictates the information provided on a payroll check stub? (A) individual states (B) Federal Unemployment Tax Act (C) Federal Wage and Hours Division (D) Social Security Administration

(A) individual states see 5.4

One element of a payroll calendar is: (A) payfrequency (B) hire dates (C) total remuneration (D) social security numbers

(A) payfrequency

To exhibit good customer service skills, payroll staff must understand and be able to explain: (A) payroll forms (B) benefits enrollment techniques (C) systems design decisions (D) strategic depaitmental direction

(A) payroll forms

All of the following steps are required when initiating direct deposit for an employee EXCEPT: (A) prenotification (B) receiving financial institution routing number · (C) getting authorization from the employee · (D) receiving employee's bank account number ·

(A) prenotification

request for proposal (RFP) can be used to: (A) provide vendors with technical and functional system requirements (B) request funds during a budget process (C) analyze needs for the system (D) assign programming resources to enhance functionality

(A) provide vendors with technical and functional system requirements

The proper handling of a stop payment includes all of the following steps EXCEPT: (A) reversing the direct deposit (B) canceling the payment in the payroll system · . , (C) notifying the bank account reconciliation employees (D) documenting the reason for the transaction

(A) reversing the direct deposit

Which of the following items determines the disposition of unclaimed wages? (A) state law only (B) federal law only (C) federal and state law (D) no recognized procedures exist

(A) state law only SEE SECTION 5.5

An employee who works for more than one employer and has exceeded the social security wage base may: (A) take a credit against federal income tax on Form 1040 (B) demand that the employer refund the overage (C) apply the social security tax to next year's withholdings (D) apply the overage to benefits paid at age 65

(A) take a credit against federal income tax on Form 1040

Company deadlines for payroll data input documents are essential for: (A) timely processing of the payroll (B) accurate entry of data (C) guaranteeing that all information is processed (D) adequate auditing purposes

(A) timely processing of the payroll

What is the purpose of the payroll accrual entry? (A) to recognize expenses in the period in which they were incurred (B) to reverse an entry made in error (C) to recognize expenses in the period in which they were paid (D) to reverse an entry from a previous period

(A) to recognize expenses in the period in which they were incurred

What is the effect of failing to record salaries that are earned but not paid at the end of an accounting period? (A) understatement of expenses for the period (B) overstatement of expenses for the period (C) understatement of assets for the period (D) overstatement of liabilities for the period

(A) understatement of expenses for the period

A company has a gross payroll of $120,589.36 that is taxable for federal income, social security, and Medicare taxes. Federal income tax withheld is $24,117.87; combined social security and Medicare taxes withheld are $9,225.09. What is the company's total payroll tax liability for this pay period? (A) $33,342.96 (B) $42,568.05 (C) $40,156.26 (D) $66,685.92

(B) $42,568.05 $24,111.87 +$9,225.09 + $9225.09 = $42568.05 see section 8.2

A nonexempt employee earns $400 per week for a normal schedule of 35 hours. Under the FLSA, how much would this employee be due if 48 hours were worked? (A) $400.00 (B) $594.40 (C) $548.64 (D) $433.32

(B) $594.40 $400 ÷ 35 = $11.43 (48 x $11.13) + ($11.23 x .5 x 8) = %594.4

For an employee earning $10.20 per hour and participating in a 401(k) plan with a deferral per pay period of $50, compute the federal income taxable wages based on the following: Biweekly pay period Regular 80 hours 4 hours overtime 3 hours double-time (A) 731.40 (B) $888.40 (C) $898.60 (D) $938.40

(B) $888.40 (80 x $10.20) + (4 x $10.20 x 1.5) + (3 x $10.20 x 2) - $50 = $888.40

An employee covered by group health insurance at the time his employment terminates to return to school is entitled to COBRA continuation rights for: (A) 12 months (B) 18 months (C) 24 months (D) 30 months

(B) 18 months

Certain company records must be retained for four years to comply with regulations of which of the following agencies? (A) U.S. Citizenship and Immigration Services (B) Internal Revenue Service (C) Social Security Administration (D) Wage and Hour Division, Department of Labor

(B) Internal Revenue Service

Which form is used to request an employer identification number? (A) I-9 (B) SS-4 (C) SS-5 (D) SS-8

(B) SS-4

Which of the following statements describes a self-insured workers' compensation plan? (A) The state pays the workers' compensation payments. (B) The employer funds the workers' compensation payments. (C) The wages will continue as if the employee is still working. (D) The individual employee is responsible for his own insurance.

(B) The employer funds the workers' compensation payments.

Which of the following elements is essential to a disaster recovery plan? (A) an excess supply of checks and direct deposit stubs (B) a compatible off-site remote location to produce payrolls (C) detailed documentation of current company policies (D) a procedure for limiting security system access

(B) a compatible off-site remote location to produce payrolls

A payroll department manager should assure: (A) an independent mission statement · (B) appropriate training and equipment resources for staff members (C) immediate enactment of employee suggestions (D) top payment of staff

(B) appropriate training and equipment resources for staff members

A procedure to have a time record signed by an employee indicates: (A) authorization for payment (B) confirmation of total hours (C) hours cannot be challenged (D) time spent at the establishment

(B) confirmation of total hours

The fact that transactions affect two separate accounts of a business is called: (A) compound-entry accounting (B) double-entry accounting (C) accrual accounting (D) T-accounting

(B) double-entry accounting

The KEY advantage of using an automated time and attendance system is that it: (A) identifies phantom employees (B) reduces errors (C) interfaces with the payroll system (D) frees supervisors from having to review hours

(B) reduces errors

Which of the following items represents an input interface to the payroll system? (A) general ledger (B) time and attendance (C) benefit payments (D) material usage records

(B) time and attendance see section 12.2-1

Which of the following documents proves an employee's identity and authorization to work? (A) social security card (B) unexpired U.S. passport (C) birth certificate (D) Form I-9

(B) unexpired U.S. passport

All of the following factors are advantages of having an in-house developed system EXCEPT: (A) scheduling flexibility (B) user groups (C) security (D) control of the system

(B) user groups

An employer that deposits payroll taxes semiweekly incurs a tax liability of $55,000 on Tuesday and a tax liability of $110,000 on Wednesday. When must the taxes be deposited? (A) $55,000 on Thursday and $110,000 on Friday (B) $55,000 on Friday and $110,000 on the next Wednesday (C) $110,000 on Thursday and $55,000 on Friday (D) $165,000 on Thursday

A payroll register for the pay period shows gross earnings of $300,000 and deductions of $120,000. The entry to the payroll expense account would be: (A) $120,000 (B) $180,000 (C) $300,000 (D) $420,000

An employee earns $9 per hour and an additional 10 cents per hour for hours worked after 7:00 p.m. If an employee works from 2:00 p.m. to 11 :00 p.m., with an unpaid meal break from 6:00 p.m. to 7:00 p.m., Monday through Friday, what is the employee's weekly gross pay under the Fair Labor Standards Act? (A) $360 (B) $361 (C) $362 (D) $364

For how many years must the employer's copy of Form 940 be retained? (A) 2 (B) 3 (C) 4 (D) 5

Employers in non-credit reduction states that pay their state unemployment taxes on time can deduct up to what percentage from the full FUTA tax rate in calculating their FUTA tax payments? (A) 0.6% (B) 4.5% (C) 5.4% (D) 6.0%

Which of the following forms may be submitted to the IRS in order to receive a written determination of a worker's status as an employee or independent contractor? (A) Form W-5 (B) Form SS-5 (C) Form SS-8 (D) Form W-9

When checking for phantom employees, which of the following actions should be taken? (A) Notify the employees of an impending physical payout. (B) Have the managers hand checks out to their employees. (C) Have employees pick up checks and direct deposit/paycard advices and show identification. (D) Mail checks directly to employees' homes.

Which of the following outcomes is the PRIMARY advantage of developing an in-house system? (A) Outsiders are not involved in a firm's daily operations. (B) Costs are reduced and can be distributed on an equitable basis. (C) The employer controls the entire computer system. (D) Time is saved by not having to explain business policies and practices.

When paying supplemental wages along with regular wages WITHOUT specifying the amount of each, how would a company determine the amount of income tax to withhold from the supplemental wages if the employee has been paid no supplemental wages so far during the year and the supplemental wage payment is no more than $1,000,000? (A) Withhold a flat 25% from the supplemental wages and-withhold from regular wages using the appropriate table. (B) Withhold a flat 25% from the supplemental wages. (C) Withhold income tax as if the total were a single wage payment for a regular payroll period. (D) Compute income tax withholding on the regular wages separate from the supplemental wages.

When an employer is advised by the IRS that an employee's Form W-4 is invalid, what action must the employer take? (A) All future Forms W-4 must be sent to the IRS as long as the employee is being paid. (B) Employers have no obligation to change exemptions unless notified by the employee through a new Form W-4. (C) Withhold on the basis of information provided by the IRS. (D) The employer should send notice at the end of the quarter, requesting that the employee contact the IRS to clear up the problem.

Which of the following plans describes a cafeteria plan under section 125 of the Internal Revenue code? (A) a quantified and accountable expense reimbursement plan (B) a tax-qualified retirement plan for public educational institutions (C) a plan which permits employees to select from two or more qualified taxable and nontaxable benefits (D) a plan whereby state government employees may request that pretax dollars be set aside in a retirement account until age 59

Payroll system user documentation should include: (A) a copy of the RFP (B) copies of project development documents (C) details of disaster recovery procedures (D) the history of the payroll system conversion

Copies of the production files and most recent payroll transactions are sent nightly to the parent company in a remote location. This practice is part of what type of plan? (A) security (B) control (C) disaster recovery (D) maintenance

Which of the following answers BEST defines the term nonexempt under the FLSA? (A) a lower-paid class of employees (B) hourly-paid workers only (C) employees who must be paid overtime (D) a special class of employees as determined by the employer

Employer-sponsored athletic facilities may be nontaxable fringe benefits if the: (A) employer requires substantiation of the amount, time, and business purpose of the facilities ' use (B) employer incurs no substantial additional cost, except labor, to provide the facilities (C) facilities are on the employer's premises (D) facilities qualify as a de minimis fringe

A team comprised of members of a department's staff with the intention of improving their own process is a: (A) cross-functional team (B) conversion team (C) functional team (D) management team

All of the following data elements are required to be maintained in the employee masterfile EXCEPT: (A) social security number (B) birth date (C) marital status (D) hourly rate of pay

What is the chief advantage of a vendor payroll package? (A) reduced processing time (B) inexpensiveness and ease of installation (C) no required major in-house system development (D) lower cost than a service provider contract

Upward communication involves: (A) dissemination of management decisions to the staff (B) interactions between you and your manager (C) passing information to management (D) conducting quality circle meetings

With regard to employees' reported tips, the employer must: (A) withhold and pay only the employees' portion of social security and Medicare taxes on tips (B) report taxes on tips separately when making an employment tax deposit • (C) report tips as wages on Form W-2 and pay the employer portion of social security and Medicare taxes (D) report and pay the employer portion of social security and Medicare taxes on the portion of cash tips above the federal minimum wage

Employee deferrals under section 401 (k) are subject to which taxes? (A)federal income, social security, and Medicare taxes (B) social security and Medicare taxes only (C) social security, Medicare, and FUTA taxes (D) federal income, social security, Medicare, and FUTA taxes

All of the following practices are acceptable to an external auditor EXCEPT: (A) the accounting department reconciling the payroll checking account (B) the payroll supervisor verifying that deposits are made timely (C) storage of blank payroll checks in the payroll department (D) the treasury department being responsible for the signature of payroll checks

All of the following actions demonstrate a strong customer service orientation EXCEPT: (A) exhibiting a customer friendly attitude (B) viewing customers as the most important part of the job (C) using voice mail to answer phone calls from customers (D) establishing relationships with people

Employees who are not eligible for direct deposit and receive paychecks sent through the mail are constructively paid: (A) on the check date (B) when the checks were postmarked (C) when the checks were delivered (D) when the checks were cashed

15. Calculate the employee's gross pay under the FLSA based on the following data: Rate of pay per hour: $8.00 Production bonus: $25.00 Shift differential per hour: $0.25 Total shift hours in workweek: 44 (A) $380.64 (B) $377.00 f7 (C) $404.50 (D) $405.64

(D) $405.64 (44 X $8) + ( 44 X $.25) + $25 = $388 $388 ÷ 44 = $8.82 $388 + ($8.82 X .5 X 4) $388 + $17.64 = $405.64

An employee is paid $9 per hour plus a 10% differential for evening shifts. During the past week, the employee worked 24 hours on the day shift and 24 hours on the evening shift. Under the FLSA, what are the employee's gross wages for the week? (A) $378.00 (B) $432.00 (C) $439.20 (D) $491.44

(D) $491.44 (48 x $9) + (24 x $9 x 10%) = $453.60 $453.60 ÷ 48 = $9.45 ($453.60 + ($9.45 x .5 x 8) ) = $491.44

In 2016, an individual worked for three employers during the calendar year, earning $38,000, $39,000, and $45,000 respectively. What is the total amount of social security and Medicare taxes that should be withheld from the employee's wages by the three employers? (A) $9,065.25 (B) $6,893.00 (C) $9,116.00 (D) $9,333.00

(D) $9,333.00 ($38,000 + $39,000 + $45,000) x 7.65% = $9,333.00

Using federal child support guidelines, calculate the maximum amount of support that can be withheld from an employee's semimonthly disposable earnings of $1,500.00. The employee is four months in arrears in making child support payments and has no other dependents. (A) $750.00 (B) $825.00 (C) $900.00 (D) $975.00

(D) $975.00 ($1,500 x 65% = $975) SEE SECTION 9.1-2

The Family and Medical Leave Act requires employers to maintain records for at least: (A) 12 weeks (B) 1 year (C) 2 years (D) 3 years

(D) 3 years

An employer may exclude a business expense reimbursement from income when the employee's expenses meet which of the following requirements? (A) Reimbursements are made with regular payroll. (B) Expenses are substantiated and excess advances are returned timely. (C) Expenses are business-related, substantiated, and excess advances are retained for future travel. (D) Expenses are business-related, substantiated, and excess advances are returned timely.

(D) Expenses are business-related, substantiated, and excess advances are returned timely.

Which of the following practices is a strong internal control procedure? (A) Have the payroll bank account reconciled in the payroll department. (B) Have the payroll manager distribute paychecks. (C) Place payroll checks under the personal control of the payroll manager. (D) Have a person other than the person who requested and authorized the payments prepare the payroll checks.

(D) Have a person other than the person who requested and authorized the payments prepare the payroll checks.

Which of the following statements is CORRECT regarding a federal tax levy? (A) It does not have to be honored if any other garnishments have been served. (B) It requires a new order for each pay period. · (C) It is limited only by the amount of the employee's net pay. (D) It is continued each pay period until a release of levy is received.

(D) It is continued each pay period until a release of levy is received.

What does it mean if, at the end of an accounting period, a company has a debit balance in a liability account? (A) The company has underdeposited taxes withheld from employee wages. (B) The company has not yet paid the third party. (C) The company has withheld too much from the employee. (D) The company has paid to a third party more than was withheld from the employee.

(D) The company has paid to a third party more than was withheld from the employee. SEE SECTION 11.1-2

With online input, what is the BEST way to control miscellaneous payments? (A) verification of a sample of entered data (B) a visual audit of the online activity report (C) an auditor's comparison of each input source document to the data base record (D) a comparison of the online report totals to predetermined totals taken from the source documents

(D) a comparison of the online report totals to predetermined totals taken from the source documents

Penalties for failure to make timely deposits are determined by: (A) a flat rate of 10% for late deposits (B) 5% of the undeposited amount with a maximum of $100,000 (C) 15% of the undeposited amount with a maximum of $100,000 (D) a four-tiered penalty structure based on the number of days the deposit is late

(D) a four-tiered penalty structure based on the number of days the deposit is late

At least how often must employers report noncash fringe benefits as income for federal tax withholding purposes? (A) each pay period (B) monthly (C) quarterly (D) annually

(D) annually

A company pays all executives semimonthly. The FLSA requires all other employees to be paid on: (A) a weekly cycle (B) a biweekly cycle (C) a semimonthly cycle (D) any established cycle

(D) any established cycle

Documenting payroll policies and procedures will provide all of the following results EXCEPT: (A) a vehicle for improving processes (B) a tool for assessing internal business controls · (C) a mechanism for educating payroll partners, suppliers, and customers (D) assurances of payroll personnel competency and performance

(D) assurances of payroll personnel competency and performance

How may federal income tax be withheld from separation pay and accrued vacation wages totaling $20,000 that are paid at the time of termination and identified separately on the employee's pay stub, if the employee has been paid $25,000 so far this year and had income tax withheld from her most recent wage payment? (A) using the aggregate method only (B) using the prior 12 months' tax rate (C) at the optional flat rate for all payouts at termination only (D) at the optional flat rate or using the aggregate method

(D) at the optional flat rate or using the aggregate method

To build morale and motivate staff, a manager must: (A) give good reviews and raises (B) reward "stars" and promote competition within each team (C) delegate accountability to staff members · (D) be sincere and specific with praise

(D) be sincere and specific with praise

When determining the value of employer-provided parking, which of the following valuation methods is allowed? (A) employer's cost (B) employee's cost (C) lower of employee's cost or fair market value (D) employee's fair market value

(D) employee's fair market value

How are salaries reflected on the income statement? (A) income (B) assets (C) accruals (D) expenses

(D) expenses

From which of the following taxes are statutory workers' compensation payments exempt? (A) federal income tax only (B) social security and Medicare taxes only (C) federal unemployment tax only (D) federal income, social security, Medicare, and federal unemployment taxes

(D) federal income, social security, Medicare, and federal unemployment taxes see section 13.2-3

A local national is defined as an employee: (A) from another country working in the U.S. (B) from the U.S. working in a foreign country (C) from a foreign company working in the U.S. (D) from a foreign country working in his or her home country location

(D) from a foreign country working in his or her home country location

All of the following items qualify as a de minimis fringe benefit EXCEPT: (A) occasional parties and picnics for employees (B) occasional supper money for working overtime (C) traditional holiday gifts, such as food items (D) group legal services worth less than $100 annually

(D) group legal services worth less than $100 annually

On a company's financial statements, payroll tax expense appears in the: (A) balance sheet (B) accrued payroll (C) salaries expense (D) income statement

(D) income statement

Transactions are recorded in chronological order into books of original entry called: (A) registers (B) vouchers (C) invoices (D) journals

(D) journals

As part of the implementation of a new payroll system, all transactions from the most recent actual payroll are processed in the new system prior to using the system to run payrolls. This is an example of what type of testing? (A) compliance (B) back-up (C) ongoing (D) parallel

(D) parallel

In a customer service situation, Payroll should: (A) assure the caller everything is okay, even when it is not (B) get in the last word (C) avoid addressing stressful issues (D) remain assertive and stay focused

(D) remain assertive and stay focused

Which of the following features is LEAST likely to be considered when looking at the security of a new payroll system? (A) regular data back-up and storage (B) protection against computer viruses · (C) limited system access· (D) system edits

(D) system edits

Which of the following steps is LEAST important during the parallel testing phase of a new payroll system? (A) the testing of employee earnings and deductions accuracy (B) the verification of employees transferred to the new system from the old system (C) the verification of tax withholding calculations for employees (D) testing the functionality of a wage attachment process

(D) testing the functionality of a wage attachment process

All of the following techniques would enhance the level of customer service EXCEPT: (A) adding more customer service personnel (B) publishing payroll customer service procedures, calendars, and directories (C) utilizing automated call processing tools to take and process caller inquiries (D) training company management on pay calculation and tax withholding rules

(D) training company management on pay calculation and tax withholding rules

Which of the following records MUST be kept for four years? (A) hours worked (B) time cards (C) OSHA records (D) voided payroll checks

(D) voided payroll checks

All of the following types of compensation are subject to social security tax EXCEPT: (A) tips under $100 (B) deferred bonus (C) third-party sick pay up to $3,000 (D) workers' compensation benefits

(D) workers' compensation benefits

ADD multi choice for chpter 2

...

What is the Medicare rate when above $200,000?

0.90% ?? .009?

What does Fair Labor Standards Act regulate?

1. Overtime 2. Minimum rate of pay 3. Child Labor Laws 4. Equal pay

Medicare Limit - EE

1.45

Medicare Limit - ER

1.45

Medicare Limit ER rate

1.45

Social Security wage limit

118,500

FMLA how many weeks

FMLA 12 weeks with an a ____ month period

12 (calendar year, rolling)

What is the maximum time that a temporary assignment can realistically be expected to last for the purposes of excluding business expense reimbursement from income?

12 months

What section of the Internal Revenue Code regulates cafeteria plan

125

Student loan garnishment max

15%

What percentage of the maximum foreign earned income exclusion is used to determine the base housing cost?

16%

A work week is any consecutive 7 days, which is how many hours?

168 possible (24x7)

An employee terminated (that was covered by health insurance) is entitled to COBRA coverage for how many months after termination?

18 months

Mileage for moving expenses?

19 cents $0.19

discount on services cannot exceed what amount?

20%

The Medicare rate us 1.45% up to what dollar amount?

200,000

Creditors garnishment max

25%

Supplemental wage % if wages are less than $1,000,000

25%

Electronic W-2 submission, more than _____ forms require electronic submission of w2 to the IRS

250

What is the age limit for dependent care under ACA?

Backup withholding

28%

Sam's regular work week consists of 40 hours and he is paid bi-weekly. If Sam works 38 hours in week one and 43 hours in week two, how may overtime hours must he be paid for?

retention records: How long for FLSA?

3 years (4 is 3) 3 yeas after the last date of entry or 3 years from the last date they were effective

How many days does an employer have to produce a W2 after an employee terminates, if requested?

30 days

Supplemental wage % if wages are greater than $1,000,000

39.6%

retention records: How long for IRS?

4 years (3 is 4)

What is the maximum number of hours a nonexempt employee can work in a workweek under FLSA before overtime premium pay is due?

Tax qualified, defined contribution pension account (IRC Code)

401k

Defined contribution account for educational/non-profits (IRC Code)

403b

Defined contribution account for state and local governments and non-profits (IRC Code)

457 (no b)

The IRS approved rate for employer provided fule

5.5 cents per mile

FMLA applies to private sector employees with ___ or more employees

Supports another family and is current (withholding percentage for child support)

50%

Business standard milage rate

54 cents

at what age is an employee no longer subject to a 10% excise tax when an employee receives a distribution from his or her qualified retirement plan?

59 1/2

FUTA rate

6% -5.4% = 0.6%

Social Security EE rate

6.2%

Social Security ER rate

6.2%

Does not support another family and is current (withholding percentage for child support)

65%

FUTA wage base is

7000

ACA

Affordable Care Act

Attendance at lectures, meetings, seminars, and training sessions is considered work time unless certain conditions are met. What are these conditions?

All the following conditions must be met for attendance at meetings, lectures, seminars and training's sessions to be considered non-work-time: The meeting, lecture etc., is not held during the employee's regular work hours. Attendance is voluntary. the meeting, lecture, etc., is not directly related to the employee's job. The employee does not perform any productive work for the employer while attending.

ALE

Applicable Large Employer

Under the FLSA, what is the compensation due an employee whose rate of pay is $8 per hour and who is paid for 52 hours during a one-week period, including 8 hours of sick pay? A. $416 B. $432 C. $448 D. $464

B. $432 (52 X $8) + ($8 X .5 X 4) = $432

What records for FLSA must be kept for 3 years after the last date of entry?

Beginning of workweek Housre worked each workday Regular rate of pay Overtime premium earnings Additions and deductions from wages

Cash equals?

CASH!

CODA

Cash or Deferred Arrangement

Code K

Code K is the 20% golden parachute excise tax. (think 24K gold)

What records for FLSA must be kept for 3 years after the last date they were effective?

Collective Bargaining agreements Records showing total sales volume and goods purchased

COBRA

Consolidated Omnibus Budge Reconciliation Act

COLA

Cost of Living Adjustment

403(b)

Defined contribution pension account for Educational/non-profits (IRC CODE)

ERISA

Employee Retirement Income Security Act

ESOP

Employee Stock Ownership Plan

EIN

Employer Identification Number

ESR

Employer Share Responsibility

What penalties can be assessed for violations of the FLSA's child labor restrictions?

Employers can be fined up to $11,000 for each violation of the child labor restrictions and up to $50,000 for each violation that causes the death or serious injury of a minor.

what government agency enforces equal pay act?

Equal Employment Opportunity Commission

What is the basic difference between exempt and nonexempt employees?

Exempt employees do not have to be paid the required minimum wage or overtime pay, and the employer does not have to keep certain records detailing their work - while nonexempt employees must be paid the required minimum wage and overtime pay and the employer must keep detailed records of their work hours and wage payments.

what law established minimum wage overtime standards in the U.S.?

Fair Labor Standards Act

The job title is a strong factor in determining whether an employee is exempt from the minimum wage and overtime provisions of the FLSA.

False. An important sounding job title does not exempt an employee from the minimum wage and overtime pay provisions for the FLSA. The employee's actual duties and salary must meet the tests of the exemption.

The time spent by employees during bona fide meal periods is considered work time.

False. Bona fide meal periods during which the employee is completely relieved from duty are not working time.

Wages other than cash are included in the minimum wage calculation if they primarily benefit the employer.

False. In addition to wages paid in the form of cash,employees may be paid in other forms as well. They may be paid partly in room, board, or other facilities provided by the employer. These facilities must primarily benefit the employee, not the employer, in order to be classified as wages.

Onsite gym is taxable

False. No tax

Taxicab drivers are exempt from the minimum wage and overtime requirements of the FLSA.

False. Taxicab drivers are only exempt from the overtime pay requirements.

The FLSA requires overtime pay for hours worked on Sunday.

False. The FLSA does not require overtime pay for hours worked on Sunday, unless the total hours worked for the workweek exceed 40.

The FLSA requires employers to pay employees to pay for employees for hours not worked because of illness.

False. The FLSA does not require the employer to pay for hours not worked because of illness.

The FLSA always overrides any wage-hour law.

False. The employer must comply with whichever law is more beneficial to the employee.

To determine gross earnings, the total overtime earnings are subtracted from the total regular earnings.

False. To determine gross earninngs, the total overtime earnings are added to the total regular earnings.

Employers are required by FLSA to give rest periods to employees.

False. Under FLSA, employers are not required to give rest periods to employees. However, rest periods may be required by state law.

For the purpose of determining whether the minimum wage has been paid, service charges automatically added to a customer's bill are classified as tips.

False. Where service charges are automatically added to customer's bills and then turned over to the employee, these amounts are not tips and are considered wages when determining whether the minimum wage has been paid.

Sharon works in Oregon, where the minimum hourly wage is $9.25. At that time, Sharon must be paid at least federal minimum hourly wage of $7.25 if she is covered by both the state wage-hour law and the FLSA.

False: the Oregon state minimum hourly wage is higher than the federal minimum wage, so sharon must be paid the state minumum hourly wage of $9.25

A mechanic must be reimbursed for the cost of laundering this work clothes if the clothes are required by the employer.

False: when employees are required to wear uniforms that cannot be worn as regular "stree clothing" and their cost and maintenance would put the employee below the minimum hourly wage, the employer must pay for the purchase, cleaning, and repair of the uniform. If the uniform can be worn off the job, the employer need not reimburse the employee, even if the employee's wages go below the minimum.

FMLA

Family Medical Leave Act

FTE

Full Time Employee

GTL

Group Term Life

HMO

Health Maintenance Organization

HRA

Health Reimbursement Account

HDHP

High Deductible Health Plan

HCE

Highly Compensated Employee

De Minimis

Impractical to track. Example: Use of copier or occasional picnic. Holiday Turkey

How to calculate taxable Life Insurance

Imputed (see tables)

What is Imputed Income?

Imputed income works on the principle of adding value to cash or non-cash employee compensation to properly withhold employment and income taxes from wages. In other words, Imputed income is the value of a service or benefit provided by employers to employees, which must be treated as income. Unless specifically exempt, imputed income is taxed. Since it is calculated for employment-related services, employers need to include it in Form W-2 for accurately reflecting taxable income.

IRA

Individual Retirement Account

MSA

Medical Savings Account (renamed to Archer MSA)

What are the five areas regulated by the Fair Labor Standards Act?

Minimum Wage Overtime Child Labor Equal pay Recordkeeping

What restrictions does the FLSA place on employers regarding the employment of minors under 18?

No minors under age 18 can work in a job that has been declared hazardous by the Wage and Hour Division. Some minos age 16 and 17 are exempt from these resrictions under student learner or apprenticeship programs, under and exemption for loading paper alers and compactors, or under an exception for 17-yr-olds who work with wood products under the supervision of a parent and meet several other requirements.

Retirement planning for Employee's taxable?

No. it's ok if it's not tax-prep

Code P

Parking

PPO

Preferred Provider Organization

SEC 125

Pretax cafeteria plan (IRC CODE)

George, a nonexempt employee, received a production bonus of $38 for a workweek in addition to his regular hourly rate of $10. George worked 44 hours during the workweek. Calculate his total earnings for the workweek.

Regular hourly pay: $10 x 44 hours = $440 Total regular pay: $440 + $38 = $478 Regular rate of pay: $478 / 44 = $10.86 Overtime hours worked: 44 - 40 = 4 Overtime premium rate: $10.86 x 0.5 = $5.43 overtime premium pay: $5.43 x 4 = $21.72 total earnings: $478 + 21.72 = $499.72

Bob, a nonexempt employee, receives and hourly wage of $13 for a 35-hour workweek. In one week, in addition to his regular hours he worked 7 hours on Saturday. Calculate his total earnings for the workeweek

Regular pay: $12 x 42 = $504.00 Overtime hours: 42 - 40 = 2 Overtime premium rate: $12 x 0.5 = $6 overtime premium pay: $6 x 2 = $12 total earnings: $504 + $12 = $516

Joe, a nonexempt employee, receives and hourly wage of $9 for a 40-hour workweek. During one workweek he worked 47 hours. calculate his total earnings for the workweek.

Regular pay: $9 x 47 hours = $423 Overtime hours = 47-40 = 7 Overtime premium rate: $9 x 0.5 = $4.50 overtime premium pay: $4.50 x 7 = $31.50 Total earnings = $423 + $31.50 = $454.50

Teri is a nonexempt employee whose normal hourly rate is $10, but she receives a $1 per hour shift differential for working the midnight to 8AM shift. During one workweek she works 45 hours on the late shift. Calculate her total earnings for the workweek.

Regular pay: ($10 + 1) x 45 hours = $495 Overtime hours: 45 - 40 = 5 Overtime premium: $11 x 0.5 = $5.50 Overtime premium pay: $5.50 x 5 = $27.50 Total earnings: $495 + $27.50 = $522.50

SIMPLE

Savings Incentive Match Plan for Employees

SERP

Supplemental Executive Retirement Plan

401(k)

Tax qualified, defined contribution pension account (IRC CODE)

What questions must be answered before overtime pay can be calculated?

The following questions must be answered to properly calculate overtime pay: What is he employee's workweek? What constitutes hours worked? What payments made to the employee are considered wages? What is the employee's regular rate of pay?

A plan similar to the fluctuating workweek plan was approved by the U.S. Supreme Court and later made part of the FLSA and its regulations. What is this plan called, and what does it provide?

The plan is called the "Belo" plan, named after the company involved in the Supreme Court's decision, and the plan guarantees a fixed salary for irregular hours that includes a set amount of overtime pay.

What is the "regular rate of pay" and how is it determined?

The regular rate of pay is an hourly rate of pay determined by dividing the total regular pay actually earned for the workweek by the total of hours worked. For salaried nonexempt employees, the regular rate of pay is the employee's salary divided by the number of hours the salary is intended to compensate.

What is the limit for filing an FLSA complaint with the Wage and Hours Division

The time limit is two years after the alleged violations or three years if the violation was willful.

What must an employee's primary duty be to qualify for the administrative employee exemption under the FLSA?

To qualify as an administrative employee: * The employee's primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers. * The employee's primary duty must include the exercise of discretion and independent judgement regarding matters of significance.

Employers that enter into an agreement with their employees to pay them a fixed weekly wage even though their hours vary from week to week are operating under a fluctuating workweek.

True

Exempt employees do not have to be paid the required minumum wage or overtime payments

True

Seamen working on foreign ships are fully exempt from the FLSA's minimum wage and overtime requirements.

True

The FLA does not require that an employee's preliminary and postliminary activities be counted as time worked.

True

The FLSA requires employers to pay tipped employees a cash wage of at least $2.13 per hour.

True

The FLSA requires overtime pay at least 1 1/2 times the employee's regular rate of pay

True

The Portal-to-Portal Act of 1947 generally states that travel time spent commuting from home to work and work o home is not considered compensable work time.

True

The basic unit for determining the proper wages due to employee is the workweek.

True

For a 40-hour workweek, Paul, who is nonexempt employee, is paid $270. This is a violation of the FLSA.

True (only $6.75 per hour)

"Mom and Pop" shops whose only employees are immediate family members are exclude from coverage under FLSA.

True.

Hospital workers are covered by the FLSA regardless of the hospital's annual volume of revenue.

True.

The FLSA is commonly known as the Federal Wage-Hour Law

True.

Under FLSA, what are the differences between enterprise coverage and individual employee coverage?

Under enterprise coverage, all the employees of a business are covered y the FLSA so long as a least two employees of the business are engaged in interstate commerce or involved in the production of goods or services for interstate commerce, and the business had annual gross sales of at least $500,000. Individual employees can e covered even if the business is not a covered enterprise if the employee is engaged in interstate commerce or the production of goods for interstate commerce.

Under FLSA, what are the differences between enterprise coverage and individual employee coverage?

USERRA

Uniformed Services Employment & Re-employment Act

Company B hires a computer systems analyst and agrees to pay the employee $25 an hour. If this person works over 40 hours in a week, is the employee due overtime pay?

Yes. in order for the computer professional exemption to apply to an hourly paid employee, the employee would have to e paid at least $27.63 per hour.

Box 12 Code R

Your employer made contributions to an Archer MSA (medical savings account) for you.

Employee covered by collective bargaining agreements may be exempt from which provisions of the FLSA? a. Minimum wage requirements b. Overtime pay requirements C. Minimum wage and overtime pay requirements d. Child labor restrictions

b. Overtime pay requirements

Which of of the following conditions of employment is governed by FLSA? a. The frequency of pay for employees b. recordkeeping requirements c. Hours worked by employees over age 16 d. Lunch and rest break requirements

b. Recordkeeping requirements

which of the following areas is not governed by the portal-to-portal act? a. travel time b. equal pay for equal work c. De minimis time d. Preliminary and postliminary activities

b. equal pay for equal work

exempt of non exempt? Trade Associations

exempt - do not tax. SHRM or APA example

exempt of non exempt? Club Memberships

not exempt - tax for personal use

reduceing taxable income: 401k come out of fed. cafe comes out of all FIT, SS and MED

note

David, a nonexempt hospital employee, has agreed with the hospital to work on a 14-day work period basis, and his regular rate of pay is $10 an hour. David works 5 days at a 9 hours each day and 4 days at 10 hours each day during the 14-day period. Calculate his gross pay for the period.

step one: Calculate total earnnings due if overtime pay is required for hours worked over 8 in a day. Regular pay: $10 x 85 hours = $850. Overtime hours: [5 x (9 - 8)] + [4 x (10 - 8)] = 13 Overtime premium rate: $10 x 0.5 = $5 overtime premium pay: $5 x 13 hours = $65 Total earnings: $850 + $65 = $915 Step 2: Calculate total earnings due if overtime pay is required for hours worked over 80 in the 14-day work period. Regular pay: $10 x 85 = 850 Overtime hours : 85 - 80 = 5 Overtime premium: $10 x 0.5 = $5 Overtime premium pay: $5 x 5 hours = $25 Total Earnings: $850 + $25 = $875 Step 3: David must be paid the higher of the results in step 1 or 2: $915

The "white collar" exemption from minimum wage and overtime provisions of the FLSA is made up of what categories of employees.

the following categories of employees make up the "white collar" exemption under FLSA: Administrative Executive Professional Computer-related professional Outside Sales

What conditions must be met for an employer to take advantage of the tip credit?

the following conditions must e met for an employer to apply the tip credit to minimum wage: * the employee must be a "tipped employee", which is an employee working in the occupation in which he or she regularly receives at least $30 per month in tips. * The employee must receive at least as much in tips ad the credit taken y the employer. * The employee must be informed about the tip credit provision of the law before the credit is taken. *All tips received by the employee must e kept y the employee, although tip pooling may e required among employees who are customarily and regularly tipped. *Credit card tips must be given to the employee be the next pay payday

What is the FLSA salary test for outside salesperson in dollar per workweek?

there is no salary minimum

FLSA wages include the fair market value of facilities such as board and lodging .

true (is this correct??)

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