CBS Payroll Processing & Administration 3

Question 1

Which of the following is a correct statement about Supplemental Wage withholding using the flat rate method?

Accepted Answer

The flat rate is 22% for supplemental wages under $1 million

Answer

For 2024, the IRS flat withholding rate on supplemental wages (bonuses, commissions) up to $1 million is 22%.

Question 2

A new employee does not submit a Form W-4. Which withholding status must the employer apply?

Accepted Answer

Single with standard withholding at the highest rate

Answer

If an employee fails to submit a W-4, the employer must withhold as if the employee is Single with no adjustments — the highest withholding rate.

Question 3

What distinguishes a Section 125 cafeteria plan benefit from a standard employee benefit for payroll tax purposes?

Accepted Answer

It reduces both federal income tax and FICA taxable wages

Answer

Section 125 cafeteria plan elections reduce gross wages subject to both federal income tax withholding and FICA (Social Security and Medicare) taxes.

Question 4

Under the Electronic Federal Tax Payment System (EFTPS), when is a monthly depositor required to deposit payroll taxes?

Accepted Answer

By the 15th of the following month

Answer

Monthly depositors must deposit payroll taxes accumulated during a calendar month by the 15th of the following month.

Question 5

An employer pays the employee share of FICA taxes on behalf of an employee (gross-up arrangement). How are those employer-paid employee taxes treated?

Accepted Answer

They are additional taxable wages to the employee

Answer

When an employer pays the employee's share of FICA, those payments are treated as additional taxable wages subject to income tax and FICA.

(CBS) Certified Budget Specialist Practice Test

(CBS) Certified Budget Specialist Practice Test

CBS Payroll Processing & Administration 3