CPS Study Guide 2026
Everything you need to pass the CPS exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 CPS Exam Format at a Glance
📚 CPS Topics to Study (21)
✍️ Sample CPS Questions & Answers
1. Which state law concept requires employers to pay all wages due upon an employee's termination on a specific timeline that may differ from regular payday?
State final paycheck laws specify when terminated employees must receive their last paycheck, and the deadline often differs (sometimes immediately) from the regular pay schedule.
2. What differentiates fixed from variable costs in CPS?
Fixed costs (rent, salaries) remain constant; variable costs (materials, commissions) fluctuate with activity volume.
3. Why is payroll compliance essential for businesses?
Compliance ensures that businesses meet all legal requirements, avoid penalties, and protect employee rights.
4. What is the role of Form 940 in payroll taxation?
Form 940 is used by employers to report and pay unemployment taxes to the IRS.
5. When an employee's Section 401(k) elective deferral exceeds the IRS annual limit, what must the employer do by April 15 of the following year?
Excess 401(k) deferrals must be returned to the employee, along with any earnings attributable to the excess, by April 15 of the year following the year of deferral to avoid double taxation.
6. What does ROI measure in CPS financial analysis?
ROI compares net gain or loss to initial investment cost, helping compare profitability of different options.