CPP Certified Payroll Professional 2 — Questions and Answers
Question 1: An employee who is paid biweekly earns $52,000 annually. What is their gross pay per pay period?
- $1,000.00
- $2,000.00 (Correct answer)
- $4,333.33
- $2,166.67
Correct answer: $2,000.00
Biweekly means 26 pay periods per year; $52,000 ÷ 26 = $2,000.00 per pay period.
Question 2: Under the FLSA, which of the following workers is generally EXEMPT from overtime requirements?
- A non-exempt clerical worker earning $35,000/year
- A bona fide executive employee meeting the salary threshold (Correct answer)
- A part-time hourly retail associate
- A seasonal amusement park worker earning hourly wages
Correct answer: A bona fide executive employee meeting the salary threshold
Bona fide executive, administrative, and professional employees who meet salary and duties tests are exempt from FLSA overtime.
Question 3: Which IRS form is used to report an employee's annual wages and taxes withheld?
- Form 941
- Form W-2 (Correct answer)
- Form 1099-NEC
- Form W-4
Correct answer: Form W-2
Form W-2 (Wage and Tax Statement) reports annual wages and federal, state, and other taxes withheld for each employee.
Question 4: What is the federal income tax withholding method that uses tables based on filing status and wage amount?
- Percentage method
- Wage bracket method (Correct answer)
- Annualized income method
- Supplemental wage method
Correct answer: Wage bracket method
The wage bracket method uses IRS Publication 15-T tables that match gross wages and filing status to a withholding amount.
Question 5: An employee receives a $5,000 bonus. The employer uses the flat supplemental withholding rate. How much federal income tax is withheld?
- $1,100 (Correct answer)
- $1,500
- $1,000
- $750
Correct answer: $1,100
The optional flat supplemental withholding rate is 22%, so $5,000 × 22% = $1,100.
Question 6: Which payroll concept refers to the reduction of taxable income through pre-tax benefit deductions such as health insurance premiums?
- Tax credit
- Tax gross-up
- Cafeteria plan deduction (Correct answer)
- Imputed income
Correct answer: Cafeteria plan deduction
Cafeteria plan (Section 125) deductions reduce an employee's taxable wages before federal income tax and FICA are calculated.
Question 7: What is the purpose of the Social Security wage base?
- It caps the amount of wages subject to Medicare tax
- It limits the wages on which Social Security tax is withheld each year (Correct answer)
- It sets the minimum wage for covered employees
- It determines the employer's FUTA tax rate
Correct answer: It limits the wages on which Social Security tax is withheld each year
The Social Security wage base is the annual earnings ceiling above which the 6.2% Social Security tax no longer applies.
CPP Certified Payroll Professional 2
An employee who is paid biweekly earns $52,000 annually.
What is their gross pay per pay period?