APA Payroll Administration and Management 2 — Questions and Answers
Question 1: Under the FLSA, which employees are exempt from overtime pay requirements?
- All salaried employees regardless of job duties
- Employees earning at least $684/week in a bona fide executive, administrative, or professional role (Correct answer)
- Any employee earning more than $15 per hour
- Employees who voluntarily waive overtime in writing
Correct answer: Employees earning at least $684/week in a bona fide executive, administrative, or professional role
FLSA white-collar exemptions require both a salary of at least $684/week AND that the employee's primary duties qualify as executive, administrative, or professional.
Question 2: An employer fails to deposit payroll taxes by the due date. Under the FTD penalty structure, what is the penalty for deposits 1–5 days late?
- 2% (Correct answer)
- 5%
- 10%
- 15%
Correct answer: 2%
IRS imposes a 2% penalty for federal tax deposits made 1–5 calendar days late under IRC Section 6656.
Question 3: Which payroll register column tracks the cumulative year-to-date earnings used to determine when an employee reaches the Social Security wage base?
- Net pay column
- Current period gross column
- YTD gross earnings column (Correct answer)
- Taxable wages column
Correct answer: YTD gross earnings column
The YTD gross earnings column accumulates all wages paid to an employee during the year, which is compared against the Social Security wage base to stop withholding once the limit is reached.
Question 4: A company uses a semi-weekly deposit schedule. Payroll is paid on Wednesday. By when must the payroll taxes be deposited?
- The following Monday
- The following Friday (Correct answer)
- The next business day
- By the 15th of the following month
Correct answer: The following Friday
Under the semi-weekly rule, taxes on wages paid Wednesday through Friday must be deposited by the following Friday.
Question 5: What is the primary purpose of a payroll reconciliation at year-end?
- To recalculate all employee net pay amounts
- To ensure W-2 amounts agree with quarterly Form 941 totals and general ledger balances (Correct answer)
- To determine whether employees owe additional taxes
- To reset all payroll system accumulators to zero
Correct answer: To ensure W-2 amounts agree with quarterly Form 941 totals and general ledger balances
Year-end reconciliation confirms that wages and taxes on Form W-2 match the cumulative amounts reported on Forms 941 and recorded in the general ledger.
Question 6: An employee's Form W-4 is submitted without a signature. What must the employer do?
- Withhold at the highest single rate until a valid W-4 is received (Correct answer)
- Accept the form and process it as submitted
- Return the form and ask for a new signed one before the next payroll
- File the unsigned form with the IRS immediately
Correct answer: Withhold at the highest single rate until a valid W-4 is received
An unsigned W-4 is invalid; the employer must withhold as if the employee is single with no adjustments until a valid, signed W-4 is received.
Question 7: Which document must employers use to verify employment eligibility for all newly hired employees in the United States?
- Form W-4
- Form I-9 (Correct answer)
- Form SS-5
- Form 8850
Correct answer: Form I-9
Form I-9 (Employment Eligibility Verification) is required by USCIS for all new hires to verify identity and authorization to work in the U.S.
APA Payroll Administration and Management 2
Under the FLSA, which employees are exempt from overtime pay requirements?