Fundamental Payroll Systems and Administration Flashcards
7 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 7 Fundamental Payroll Systems and Administration flashcards as text
Which payroll processing method requires the employer to manage all payroll functions internally without outside assistance?
Answer: In-house (manual) payroll
In-house or manual payroll means the employer handles all calculations, tax filings, and record-keeping using internal staff and systems.
A company uses a payroll service bureau. Who is ultimately responsible for ensuring payroll taxes are filed correctly and on time?
Answer: The employer
Even when using a service bureau, the employer retains legal responsibility for accurate and timely payroll tax compliance.
What does 'gross-to-net' processing refer to in a payroll system?
Answer: Calculating an employee's net pay by subtracting taxes and deductions from gross earnings
Gross-to-net processing starts with total earnings and systematically subtracts all required taxes and voluntary deductions to arrive at net pay.
Which control helps prevent a single payroll employee from both authorizing payroll and disbursing funds?
Answer: Dual authorization or segregation of duties
Segregation of duties requires that different individuals authorize payroll and actually release the funds, reducing the risk of fraud.
An employee is classified as exempt from overtime. Under the FLSA, which of the following is NOT a requirement for the executive exemption?
Answer: Must be paid on an hourly basis
The FLSA executive exemption requires a salary basis of at least the threshold amount, not hourly pay; hourly payment typically disqualifies the exemption.
How does a payroll system typically handle a mid-period pay rate change for an hourly employee?
Answer: Calculates pay at the old rate for hours before the change and the new rate for hours after
Most payroll systems support split-rate processing, applying each rate only to the hours worked while that rate was in effect.
Which federal agency must employers notify when setting up a new payroll account for tax withholding purposes?
Answer: Internal Revenue Service
Employers obtain an Employer Identification Number (EIN) from the IRS and use it for all federal payroll tax deposits and filings.
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