Fundamental Payroll Certification Fundamental Payroll Certification 2 — Questions and Answers
Question 1: An employee earns $18/hour and works 46 hours in a week. What is their gross pay under FLSA overtime rules?
- $828.00
- $856.00
- $882.00 (Correct answer)
- $918.00
Correct answer: $882.00
Regular pay: 40 × $18 = $720; overtime: 6 × $27 (1.5×) = $162; total = $882.
Question 2: Which IRS form is used by an employee to claim exemption from federal income tax withholding?
- Form W-2
- Form W-4 (Correct answer)
- Form 1099-NEC
- Form 941
Correct answer: Form W-4
Form W-4 (Employee's Withholding Certificate) instructs the employer on federal income tax withholding, including exemption claims.
Question 3: The Social Security tax rate for employees under FICA is:
- 1.45%
- 2.9%
- 6.2% (Correct answer)
- 12.4%
Correct answer: 6.2%
Employees pay 6.2% of covered wages for Social Security; employers match this amount.
Question 4: A company pays employees on the 15th and last day of each month. This is called a:
- Weekly pay period
- Biweekly pay period
- Semimonthly pay period (Correct answer)
- Monthly pay period
Correct answer: Semimonthly pay period
Semimonthly pay schedules have exactly two fixed pay dates per month, resulting in 24 pay periods per year.
Question 5: Which federal agency enforces the Fair Labor Standards Act (FLSA)?
- IRS
- Department of Labor — Wage and Hour Division (Correct answer)
- Social Security Administration
- Department of Treasury
Correct answer: Department of Labor — Wage and Hour Division
The Wage and Hour Division of the U.S. Department of Labor enforces FLSA minimum wage, overtime, and recordkeeping requirements.
Question 6: Which of the following is a pre-tax deduction that reduces federal income tax withholding?
- Roth 401(k) contributions
- After-tax life insurance premiums
- Traditional 401(k) contributions (Correct answer)
- Wage garnishments
Correct answer: Traditional 401(k) contributions
Traditional 401(k) contributions are pre-tax, reducing the employee's taxable wages for federal income tax purposes.
Question 7: Under FUTA, what is the standard tax rate applied to the first $7,000 of each employee's wages?
- 0.6%
- 2.7%
- 5.4%
- 6.0% (Correct answer)
Correct answer: 6.0%
The gross FUTA rate is 6.0%, but employers in states with no outstanding federal loans receive a 5.4% credit, yielding a net 0.6%.
Fundamental Payroll Certification Fundamental Payroll Certification 2
An employee earns $18/hour and works 46 hours in a week.
What is their gross pay under FLSA overtime rules?