Payroll Benefits and Retirement Plans Flashcards
6 cards from real Fundamental Payroll Certification practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Payroll Benefits and Retirement Plans flashcards as text
What is the IRS employee deferral limit for a 401(k) plan in 2024?
Answer: $23,000
The IRS set the 2024 annual 401(k) employee deferral limit at $23,000.
Which type of retirement plan guarantees a specific monthly benefit at retirement based on salary and years of service?
Answer: Defined benefit plan
A defined benefit plan promises a specific retirement benefit calculated from salary history and years of service.
What is the catch-up contribution limit for employees aged 50 and over in a 401(k) plan for 2024?
Answer: $7,500
Employees aged 50 and older can make an additional $7,500 catch-up contribution to a 401(k) in 2024.
A SIMPLE IRA plan may be established by employers with no more than how many employees?
Answer: 100
SIMPLE IRA plans are available to employers with 100 or fewer employees who earned at least $5,000 in the prior year.
Which retirement plan requires the employer to contribute the same percentage of compensation for all eligible employees?
Answer: SEP IRA
In a SEP IRA, the employer must contribute the same percentage of compensation for every eligible employee.
Pre-tax employee contributions to a traditional 401(k) plan reduce the employee's taxable wages for which tax?
Answer: Federal income tax withholding
Traditional 401(k) pre-tax deferrals reduce federal income tax withholding but remain subject to FICA (Social Security and Medicare) taxes.
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