Practice Test Geeks(CPM) Certified Payroll Manager Practice Test
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Payroll Processing and Administration Flashcards

7 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Payroll Processing and Administration flashcards as text

  1. Under FLSA, which of the following workers is correctly classified as exempt from overtime requirements?

    Answer: A salaried store manager earning $700/week who directs two or more employees and has hiring authority

    The executive exemption requires a salary of at least $684/week, primary duty of management, and authority over at least two employees.

  2. A garnishment order requires withholding $300 per week, but the employee's disposable earnings are only $350. Under CCPA, what is the maximum that can be withheld?

    Answer: $87.50 (25% of $350)

    CCPA limits garnishment to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage.

  3. Which payroll tax deposit rule applies when a company's accumulated tax liability reaches $100,000 on any day during a deposit period?

    Answer: Deposit by the next business day

    The $100,000 next-day deposit rule requires immediate deposit by the next business day once cumulative liability reaches $100,000.

  4. An employer provides group-term life insurance coverage of $75,000 to an employee. What amount is subject to income and FICA taxes?

    Answer: The cost of coverage over $50,000

    The imputed income taxable to the employee is the employer-provided cost of group-term life insurance coverage exceeding $50,000.

  5. What is the correct treatment for backup withholding on payments subject to Form 1099 reporting when a payee fails to provide a valid TIN?

    Answer: Withhold at the backup withholding rate of 24%

    Backup withholding is required at a flat 24% rate when a payee fails to provide a valid taxpayer identification number.

  6. A payroll manager discovers that an employee was overpaid $800 in a prior year. What is the correct procedure for correcting the over-withholding?

    Answer: Issue a corrected W-2c and file Form 941-X to claim a refund of over-withheld FICA

    Prior-year payroll errors require filing a W-2c to correct the employee's wage statement and a Form 941-X to adjust or claim refund of over-withheld employment taxes.

  7. Under IRS regulations, what is the maximum contribution limit for a Health Flexible Spending Account (Health FSA) employee salary reduction in 2024?

    Answer: $3,200

    For 2024, the IRS health FSA salary reduction contribution limit is $3,200 per employee.