CPP Payroll Tax Compliance 2

Question 1

What is the employer's share of the Social Security tax rate applied to employee wages up to the wage base?

Accepted Answer

6.2%

Answer

The employer pays 6.2% of the employee's wages up to the Social Security wage base as their share of OASDI.

Question 2

Which IRS form must employers file quarterly to report federal income tax withheld and FICA taxes?

Accepted Answer

Form 941

Answer

Form 941, the Employer's Quarterly Federal Tax Return, is used to report withheld income taxes and FICA taxes each quarter.

Question 3

An employee earns $3,000 bi-weekly. What is the combined employee FICA tax (Social Security + Medicare) withheld per paycheck?

Accepted Answer

$229.50

Answer

Employee FICA is 7.65% (6.2% SS + 1.45% Medicare) × $3,000 = $229.50.

Question 4

Under FUTA, what is the standard federal unemployment tax rate before any state credit reduction?

Accepted Answer

6.0%

Answer

The gross FUTA rate is 6.0% on the first $7,000 of each employee's wages, before applying the 5.4% state tax credit.

Question 5

What is the deposit penalty rate for payroll taxes that are 1–5 days late under the IRS penalty schedule?

Accepted Answer

2%

Answer

A 2% penalty applies when federal payroll tax deposits are 1–5 days late under the tiered penalty structure.

CPP - Certified Payroll Professional Practice Test