Free Fundamental Payroll Certification Trivia Question and Answers — Questions and Answers

Question 1: What two forms must be completed before you may get paid?

Form W-4 and Employee's Withholding Allowance Certificate (Correct answer)
Form I-9 and Form 1099
Form I-9 and Form 1040
Form 1-9 and Form W-4

Correct answer: Form W-4 and Employee's Withholding Allowance Certificate

Before an employee can be paid, they must complete two essential forms for payroll and tax purposes. Form W-4, the Employee's Withholding Certificate, instructs the employer on how much federal income tax to withhold from each paycheck. Form I-9, Employment Eligibility Verification, confirms the employee's identity and legal eligibility to work in the United States.

Question 2: Except for whom of the following are all non-exempt workers?

A computer specialist
A high school administrator
A manager who has people reporting to her
A person whose primary job is to index computer files continuously (Correct answer)

Correct answer: A person whose primary job is to index computer files continuously

Non-exempt workers are typically paid hourly and are entitled to overtime pay under the Fair Labor Standards Act (FLSA). Exempt workers, such as computer specialists, administrators, and managers, are generally salaried and meet specific duties tests that exempt them from overtime. A person continuously indexing computer files is likely performing a routine, non-discretionary task, making them non-exempt.

Question 3: Which response is most unlikely to be accurate? Workers can be categorized as

Exempt
Employees
Non-Exempt
Temporary Contractors (Correct answer)

Correct answer: Temporary Contractors

Workers are primarily categorized as employees (who can be either exempt or non-exempt from overtime rules) or independent contractors. 'Temporary Contractors' is not a standard, official classification for workers in the same way 'Exempt,' 'Non-Exempt,' or 'Employees' are under labor laws. While temporary workers or contractors exist, 'Temporary Contractors' as a distinct, official category alongside the others is the least likely to be accurate in a formal classification context.

Question 4: Medicare taxes and Social Security payments together make up what is known as

State Income Tax
County Income Tax
FICA (Correct answer)
FCC

Correct answer: FICA

FICA stands for the Federal Insurance Contributions Act, which is a U.S. federal payroll tax. This tax funds both Social Security and Medicare programs. Employees and employers both contribute a percentage of wages to FICA, providing benefits for retirees, the disabled, and children of deceased workers, as well as healthcare for the elderly.

Question 5: Which of the following applies IF an independent contractor fails to give a TIN number?

Back up withholding of 40%
Garnishment of 1099 income
Monetary fines
Back up withholding of 28% (Correct answer)

Correct answer: Back up withholding of 28%

If an independent contractor fails to provide a Taxpayer Identification Number (TIN) to the payer, the IRS requires the payer to withhold a percentage of payments as 'backup withholding.' This rate is currently 24%, though it has been 28% in previous years. This measure ensures that taxes are collected even if the contractor does not report their income.

Question 6: Which of the following is NOT required under the FLSA?

Overtime
Record Keeping Keeping (3 years)
Vacation Pay (Correct answer)
Payable Time

Correct answer: Vacation Pay

The Fair Labor Standards Act (FLSA) sets federal standards for minimum wage, overtime pay, recordkeeping, and child labor. However, the FLSA does not mandate that employers provide vacation pay, holiday pay, severance pay, or sick leave. These types of benefits are typically determined by employer policy, collective bargaining agreements, or state laws, not federal FLSA requirements.

Question 7: False or True. To report pay that is over $800 per year for independent contractors, the business issues a 1099 MISC form to the employee and the IRS.

False (Correct answer)
True

Correct answer: False

This statement is false. Businesses are required to issue a Form 1099-MISC (or 1099-NEC for nonemployee compensation) to independent contractors and the IRS when payments for services exceed $600 in a calendar year, not $800. This form is crucial for reporting income paid to non-employees, enabling the IRS to track and tax this income appropriately.

Free Fundamental Payroll Certification Trivia Question and Answers

What two forms must be completed before you may get paid?