CPM Payroll Processing and Administration 3

Question 1

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

Accepted Answer

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

Answer

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

Question 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?

Accepted Answer

$87.50 (25% of $350)

Answer

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.

Question 3

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

Accepted Answer

Deposit by the next business day

Answer

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

Question 4

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

Accepted Answer

The cost of coverage over $50,000

Answer

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

Question 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?

Accepted Answer

Withhold at the backup withholding rate of 24%

Answer

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

(CPM) Certified Payroll Manager Practice Test

(CPM) Certified Payroll Manager Practice Test

CPM Payroll Processing and Administration 3