Fundamental Payroll Certification Fundamental Payroll Core Payroll Concepts 2 — Questions and Answers
Question 1: Which IRS form do employees complete to tell their employer how much federal income tax to withhold from their paychecks?
- Form W-2
- Form W-4 (Correct answer)
- Form 941
- Form 1099
Correct answer: Form W-4
Form W-4 (Employee's Withholding Certificate) is completed by employees to indicate their withholding allowances and filing status for federal income tax purposes.
Question 2: The Social Security tax rate for employees under FICA is:
- 5.4%
- 6.2% (Correct answer)
- 1.45%
- 7.65%
Correct answer: 6.2%
Employees pay 6.2% of wages for Social Security (OASDI), up to the annual wage base limit, while employers match that same 6.2%.
Question 3: An employee earns $52,000 annually. If paid biweekly, what is the gross pay per pay period?
- $1,000.00
- $2,166.67
- $2,000.00 (Correct answer)
- $4,333.33
Correct answer: $2,000.00
Biweekly means 26 pay periods per year; $52,000 ÷ 26 = $2,000.00 per pay period.
Question 4: Which of the following is considered a pre-tax deduction that reduces an employee's taxable wages?
- Roth 401(k) contributions
- Garnishments
- Traditional 401(k) contributions (Correct answer)
- After-tax life insurance premiums
Correct answer: Traditional 401(k) contributions
Traditional 401(k) contributions are pre-tax, reducing the employee's federal taxable income, unlike Roth 401(k) contributions which are made after-tax.
Question 5: Medicare tax is levied at what rate on all covered wages with no wage base limit?
- 6.2%
- 2.9%
- 1.45% (Correct answer)
- 0.9%
Correct answer: 1.45%
Employees pay 1.45% for Medicare on all covered wages, with no cap, and employers match that 1.45%.
Question 6: Under the Additional Medicare Tax rules, a single filer employee must pay an extra 0.9% Medicare surtax on wages exceeding:
- $100,000
- $200,000 (Correct answer)
- $250,000
- $500,000
Correct answer: $200,000
Employers must withhold the additional 0.9% Medicare tax on wages paid to an individual that exceed $200,000 in a calendar year, regardless of filing status.
Question 7: A semi-monthly pay schedule results in how many pay periods per year?
- 12
- 24 (Correct answer)
- 26
- 52
Correct answer: 24
Semi-monthly means twice per month (e.g., the 1st and 15th), totaling 24 pay periods per year.
Fundamental Payroll Certification Fundamental Payroll Core Payroll Concepts 2
Which IRS form do employees complete to tell their employer how much federal income tax to withhold from their paychecks?