Payroll Processing & Administration Flashcards
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Read the first 7 Payroll Processing & Administration flashcards as text
Which of the following fringe benefits is generally excluded from an employee's gross income for federal tax purposes?
Answer: Employer-paid health insurance premiums
Employer-paid health insurance premiums are excluded from employees' gross income under Section 106 of the Internal Revenue Code.
What document must employers provide to employees by January 31 each year summarizing annual wages and taxes withheld?
Answer: Form W-2
Employers must furnish Form W-2 (Wage and Tax Statement) to each employee by January 31 of the following year.
An employee enrolls in a Section 125 cafeteria plan. How does this affect their federal income tax withholding?
Answer: It reduces taxable wages by the pre-tax contribution amount
Section 125 cafeteria plan contributions are made pre-tax, reducing the employee's taxable wages for federal income tax withholding purposes.
Which form is used by employers to transmit Copy A of all Forms W-2 to the Social Security Administration?
Answer: Form W-3
Form W-3 (Transmittal of Wage and Tax Statements) is the cover sheet submitted with Copy A of all W-2 forms to the SSA.
Under the FLSA, which category of workers is generally exempt from overtime pay requirements?
Answer: Executive, administrative, and professional employees meeting salary thresholds
The FLSA's white-collar exemptions apply to executive, administrative, and professional employees who meet specific salary and duties tests.
An employer's payroll register shows gross wages of $50,000. Employee FICA withholdings total $3,825. What amount does the employer owe in matching FICA taxes?
Answer: $3,825.00
Employers match employee FICA contributions dollar-for-dollar, so the employer owes $3,825 in matching FICA taxes.
What is the purpose of the payroll lookback period for determining deposit frequency?
Answer: To determine whether an employer is a monthly or semi-weekly depositor
The lookback period (a 12-month period ending June 30 of the prior year) is used to determine whether an employer must deposit payroll taxes monthly or semi-weekly.