CPS Payroll Fundamentals 2 — Questions and Answers
Question 1: An employee works 46 hours in a workweek. How many overtime hours must be paid at the FLSA overtime rate?
- 4 hours
- 6 hours (Correct answer)
- 8 hours
- None — overtime begins at 50 hours
Correct answer: 6 hours
FLSA requires overtime pay for all hours worked over 40 in a workweek, so 46 - 40 = 6 overtime hours.
Question 2: Which IRS form must employers file quarterly to report federal income tax withheld and FICA taxes?
- Form 940
- Form 941 (Correct answer)
- Form W-2
- Form 1099-NEC
Correct answer: Form 941
Form 941, the Employer's Quarterly Federal Tax Return, reports wages paid, federal income tax withheld, and FICA taxes each quarter.
Question 3: What is the employer's share of the Social Security tax rate applied to wages up to the wage base?
- 1.45%
- 6.2% (Correct answer)
- 7.65%
- 12.4%
Correct answer: 6.2%
Employers pay 6.2% for Social Security (OASDI) on wages up to the annual wage base, matching the employee's contribution.
Question 4: A salaried exempt employee earns $52,000 annually. What is her gross pay per biweekly pay period?
- $1,000.00
- $2,000.00 (Correct answer)
- $2,166.67
- $4,333.33
Correct answer: $2,000.00
$52,000 ÷ 26 biweekly periods = $2,000.00 per pay period.
Question 5: Under the FLSA, which of the following workers is most likely classified as exempt from overtime?
- A full-time cashier earning $30,000/year
- An administrative assistant earning $35,000/year
- A systems analyst earning $68,000/year with primary duty of office work (Correct answer)
- A part-time warehouse loader earning $20/hour
Correct answer: A systems analyst earning $68,000/year with primary duty of office work
To qualify for the administrative exemption, an employee must earn at least $684/week and have a primary duty of office/non-manual work exercising discretion.
Question 6: Which of the following is a pre-tax deduction that reduces an employee's federal taxable wages?
- Roth 401(k) contributions
- Traditional 401(k) contributions (Correct answer)
- Union dues
- Garnishment payments
Correct answer: Traditional 401(k) contributions
Traditional 401(k) employee contributions are made pre-tax, reducing the employee's federal taxable income in the contribution year.
Question 7: What is the purpose of Form W-4 in the payroll process?
- To report year-end wages to the Social Security Administration
- To authorize direct deposit of net pay
- To instruct the employer on the amount of federal income tax to withhold (Correct answer)
- To certify an employee's exempt status from FICA
Correct answer: To instruct the employer on the amount of federal income tax to withhold
Form W-4 (Employee's Withholding Certificate) tells the employer how much federal income tax to withhold from each paycheck.
CPS Payroll Fundamentals 2
An employee works 46 hours in a workweek.
How many overtime hours must be paid at the FLSA overtime rate?