Fundamental Payroll Certification Fundamental Payroll Systems and Administration 4

Question 1

A payroll administrator discovers that an employee was overpaid by $500 in the prior pay period. What is the best first step?

Accepted Answer

Notify the employee and establish a repayment plan in compliance with state law

Answer

State wage deduction laws often restrict how and when overpayments can be recovered, requiring employee notification and, in some states, written consent.

Question 2

Which payroll record retention period is required by the FLSA for basic payroll records such as time cards and wage rate tables?

Accepted Answer

2 years

Answer

The FLSA requires that records used to compute wages, such as time cards and piece-rate tables, be kept for at least 2 years.

Question 3

An employee contributes to a Section 125 Cafeteria Plan. How does this affect their taxable wages?

Accepted Answer

Reduces federal, Social Security, and Medicare taxable wages

Answer

Section 125 pre-tax contributions reduce the employee's wages subject to federal income tax, Social Security, and Medicare taxes.

Question 4

Which of the following is an example of a voluntary payroll deduction?

Accepted Answer

Employee 401(k) contribution

Answer

A 401(k) contribution is initiated at the employee's discretion, making it a voluntary deduction, unlike mandatory taxes.

Question 5

A payroll system integration with an HR system of record is most valuable for:

Accepted Answer

Automatically syncing employee demographic and status changes to payroll

Answer

HR-to-payroll integration ensures that hires, terminations, pay changes, and demographic updates flow automatically, reducing manual data entry errors.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Systems and Administration 4