Fundamental Payroll Certification Fundamental Payroll Certification MCQ 2 — Questions and Answers
Question 1: An employee earns $18/hr and works 46 hours in a workweek. What is their gross pay using the half-time overtime method?
- $828.00
- $855.00 (Correct answer)
- $882.00
- $918.00
Correct answer: $855.00
Under the half-time method, total pay = $18 × 46 + ($18/2) × 6 = $828 + $54 = $855 (used when overtime is included in a fixed salary covering fluctuating hours).
Question 2: Which IRS form is used to report an employee's annual wages and taxes withheld?
- Form 941
- Form W-2 (Correct answer)
- Form 1099-NEC
- Form W-4
Correct answer: Form W-2
Form W-2 (Wage and Tax Statement) reports annual wages, tips, and withheld taxes to both the employee and the SSA/IRS.
Question 3: What is the FUTA tax rate after applying the standard 5.4% state credit to a state with no credit reduction?
- 0.6% (Correct answer)
- 1.2%
- 5.4%
- 6.0%
Correct answer: 0.6%
The gross FUTA rate is 6.0%; employers in states with no credit reduction receive a 5.4% credit, leaving a net rate of 0.6%.
Question 4: A garnishment order requires withholding the lesser of: (1) 25% of disposable earnings or (2) disposable earnings minus 30 times the federal minimum wage. Which law establishes this formula?
- ERISA
- Title III of the Consumer Credit Protection Act (Correct answer)
- The Fair Labor Standards Act
- The Debt Collection Improvement Act
Correct answer: Title III of the Consumer Credit Protection Act
Title III of the Consumer Credit Protection Act (CCPA) sets federal limits on the amount of an employee's disposable earnings that may be garnished.
Question 5: Under IRS rules, what is the deadline for an employer to deposit semi-weekly payroll tax liabilities that fall on a Wednesday?
- The following Monday
- The following Friday
- The same Friday (Correct answer)
- The next Wednesday
Correct answer: The same Friday
For semi-weekly depositors, taxes on Wednesday–Friday payrolls must be deposited by the following Friday of the same week.
Question 6: Which of the following benefits is excluded from an employee's gross income under IRC Section 129?
- Group-term life insurance over $50,000
- Dependent care assistance up to $5,000 (Correct answer)
- Personal use of a company car
- Cash bonuses
Correct answer: Dependent care assistance up to $5,000
IRC Section 129 excludes employer-provided dependent care assistance up to $5,000 ($2,500 if married filing separately) from an employee's gross income.
Question 7: An employee's Social Security wages for the year have reached the wage base. Which taxes continue to apply to additional wages?
- Social Security and Medicare both continue
- Neither Social Security nor Medicare continues
- Only Medicare tax continues (Correct answer)
- Only Social Security tax continues
Correct answer: Only Medicare tax continues
Once the Social Security wage base is reached, Social Security (6.2%) stops, but Medicare (1.45%, plus 0.9% Additional Medicare Tax for high earners) continues with no wage limit.
Fundamental Payroll Certification Fundamental Payroll Certification MCQ 2
An employee earns $18/hr and works 46 hours in a workweek.
What is their gross pay using the half-time overtime method?