CPP Payroll Tax Compliance

Question 1

What is the current Social Security tax rate for employees in the United States?

Accepted Answer

6.2% on wages up to the annual wage base limit

Answer

Employees pay 6.2% of their wages in Social Security tax up to the annual wage base limit ($168,600 in 2024), with employers matching the same amount.

Question 2

What is Form W-4 used for?

Accepted Answer

For employees to indicate their federal tax withholding preferences to their employer

Answer

Form W-4 (Employee's Withholding Certificate) tells employers how much federal income tax to withhold from employee paychecks based on filing status, dependents, and other adjustments.

Question 3

What is the FICA tax and what does it fund?

Accepted Answer

Federal Insurance Contributions Act tax funding Social Security and Medicare

Answer

FICA consists of Social Security tax (6.2%) and Medicare tax (1.45%) paid by both employees and employers, funding the federal Social Security and Medicare programs.

Question 4

When is the employer required to deposit payroll taxes with the IRS?

Accepted Answer

On a semi-weekly or monthly schedule based on the employer's total tax liability

Answer

Employers must deposit payroll taxes on either a semi-weekly or monthly schedule, determined by the employer's lookback period tax liability, with penalties for late deposits.

Question 5

What is the Additional Medicare Tax?

Accepted Answer

An additional 0.9% tax on wages exceeding $200,000 for single filers, paid only by the employee

Answer

The Additional Medicare Tax of 0.9% applies to employee wages exceeding $200,000 (single), $250,000 (married filing jointly), with no employer match.

CPP - Certified Payroll Professional Practice Test

CPP - Certified Payroll Professional Practice Test

CPP Payroll Tax Compliance