Fundamental Payroll Certification Fundamental Payroll Paycheck Calculation Methods 2 — Questions and Answers
Question 1: An employee earns $3,200 semimonthly. What is their annualized salary?
- $38,400
- $76,800 (Correct answer)
- $83,200
- $72,000
Correct answer: $76,800
Semimonthly pay periods = 24 per year; $3,200 × 24 = $76,800.
Question 2: For 2024, the Social Security wage base is $168,600. An employee has already earned $168,600 YTD. How much Social Security tax should be withheld from their next $5,000 paycheck?
- $310.00
- $72.50
- $0.00 (Correct answer)
- $155.00
Correct answer: $0.00
Once an employee reaches the Social Security wage base, no further Social Security tax is withheld for the remainder of the year.
Question 3: An employee contributes $500 per pay period to a traditional 401(k). For FICA tax purposes, this contribution is:
- Excluded from both Social Security and Medicare taxes
- Subject to both Social Security and Medicare taxes (Correct answer)
- Subject to Medicare only
- Subject to Social Security only
Correct answer: Subject to both Social Security and Medicare taxes
Traditional 401(k) elective deferrals reduce federal income tax withholding but are still subject to FICA (Social Security and Medicare) taxes.
Question 4: An employee is paid biweekly and has a Section 125 health insurance premium of $150 per pay period. How does this affect their taxable wages for FIT withholding?
- No effect — premiums are post-tax
- Reduces taxable wages by $150 (Correct answer)
- Reduces taxable wages by $300
- Increases taxable wages by $150
Correct answer: Reduces taxable wages by $150
Section 125 (cafeteria plan) premiums are excluded from federal income taxable wages, reducing the withholding base by the premium amount each pay period.
Question 5: Which pay frequency results in the highest per-paycheck gross amount for a $60,000 annual salary?
- Weekly
- Biweekly
- Semimonthly
- Monthly (Correct answer)
Correct answer: Monthly
Monthly pay has only 12 periods per year, so each check equals $60,000 ÷ 12 = $5,000, the largest single paycheck amount.
Question 6: An employee earns $18/hr and works 44 hours in a week. Assuming FLSA overtime rules apply, what is their gross pay?
- $792.00
- $828.00 (Correct answer)
- $846.00
- $864.00
Correct answer: $828.00
40 hrs × $18 = $720 regular + 4 hrs × $27 (1.5× rate) = $108 OT; total = $828.
Question 7: The Medicare Additional Tax of 0.9% applies to wages exceeding which threshold for a single filer in 2024?
- $125,000
- $200,000 (Correct answer)
- $250,000
- $400,000
Correct answer: $200,000
Employers must withhold the additional 0.9% Medicare tax on wages over $200,000 paid to any individual employee, regardless of filing status.
Fundamental Payroll Certification Fundamental Payroll Paycheck Calculation Methods 2
An employee earns $3,200 semimonthly.
What is their annualized salary?