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
Which record-keeping requirement under FLSA applies to payroll records for non-exempt employees?
Answer: Records must be retained for at least 3 years
FLSA requires that payroll records for non-exempt employees be retained for a minimum of three years.
An employee earns a $10,000 bonus in addition to regular wages in the same paycheck. Using the aggregate method for supplemental wage withholding, how is withholding calculated?
Answer: Combine regular wages and bonus, calculate withholding on the total, subtract withholding already taken from regular wages
The aggregate method adds supplemental wages to regular wages and computes withholding on the combined amount, then subtracts withholding already withheld from the regular wages.
Which of the following fringe benefits is always fully taxable as wages?
Answer: Cash payments in lieu of a non-taxable fringe benefit
Cash provided to employees in lieu of a qualified nontaxable benefit (such as cash instead of transit passes) is fully taxable as wages.
A company fails to deposit payroll taxes by the required due date. The deposit is made 8 days late. What FTD penalty rate applies?
Answer: 5%
IRS FTD penalties are tiered: 2% for 1-5 days late, 5% for 6-15 days late, 10% for more than 15 days late, and 15% after IRS notice.
What is the purpose of the IRS Form 8027 that employers in the food and beverage industry must file?
Answer: To report tip income allocated to tipped employees
Form 8027 is used by large food and beverage establishments to report receipts from food and beverage sales and tip income allocated to tipped employees.
When an employer pays an employee's share of FICA taxes (tax equalization), how is this treated for income tax purposes?
Answer: It is included in the employee's gross income as additional wages
When an employer pays the employee's share of FICA, that payment is additional taxable wages subject to income and employment taxes.
Which IRS publication provides the withholding tables and methods used to calculate federal income tax withholding from employee wages?
Answer: Publication 15 (Circular E)
IRS Publication 15 (Employer's Tax Guide / Circular E) contains the federal income tax withholding tables and instructions for employers.