CBS Payroll Processing & Administration 2 — Questions and Answers
Question 1: An employee's gross pay is $4,200 per month. They contribute 6% to a 401(k) pre-tax. What is their taxable gross for federal income tax withholding purposes?
- $3,948 (Correct answer)
- $4,200
- $3,780
- $4,452
Correct answer: $3,948
Pre-tax 401(k) contributions reduce taxable gross: $4,200 × 6% = $252, so $4,200 − $252 = $3,948.
Question 2: Which federal form must employers file quarterly to report wages paid and taxes withheld for employees?
- Form 944
- Form 941 (Correct answer)
- Form 940
- Form W-3
Correct answer: Form 941
Form 941 is the Employer's Quarterly Federal Tax Return used to report wages, tips, and federal tax withholding each quarter.
Question 3: Under the FLSA, which of the following workers is most likely classified as non-exempt and therefore entitled to overtime pay?
- A salaried HR manager earning $65,000/year
- An hourly warehouse picker earning $18/hour (Correct answer)
- A salaried IT director earning $80,000/year
- A commissioned outside sales rep
Correct answer: An hourly warehouse picker earning $18/hour
Hourly workers performing non-managerial duties typically do not meet FLSA white-collar exemption tests and must receive overtime pay.
Question 4: What is the IRS standard mileage reimbursement rate used for in payroll?
- Calculating taxable fringe benefits for company vehicles
- Reimbursing employees for business use of personal vehicles tax-free (Correct answer)
- Setting the minimum wage for delivery drivers
- Determining commuting expense deductions
Correct answer: Reimbursing employees for business use of personal vehicles tax-free
Employees reimbursed at or below the IRS standard mileage rate for business travel in personal vehicles receive a non-taxable reimbursement.
Question 5: A garnishment order for child support arrives for an employee. Under federal law (CCPA), the maximum amount that can be garnished if the employee supports another family is:
- 50% of disposable earnings (Correct answer)
- 60% of disposable earnings
- 25% of disposable earnings
- 65% of disposable earnings
Correct answer: 50% of disposable earnings
Under the CCPA, the maximum garnishment for child support is 50% of disposable earnings when the employee is supporting another spouse or child.
Question 6: Which payroll record retention period does the IRS require for employment tax records such as W-4s and payroll registers?
- 2 years
- 3 years
- 4 years (Correct answer)
- 7 years
Correct answer: 4 years
The IRS requires employers to retain employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later.
Question 7: An employee is paid $20/hour and works 50 hours in a workweek. What is their total gross pay under FLSA overtime rules?
- $1,000
- $1,100 (Correct answer)
- $1,200
- $1,300
Correct answer: $1,100
Regular pay: 40 × $20 = $800; overtime: 10 × $30 = $300; total = $1,100.
CBS Payroll Processing & Administration 2
An employee's gross pay is $4,200 per month.
They contribute 6% to a 401(k) pre-tax.
What is their taxable gross for federal income tax withholding purposes?