Fundamental Payroll Certification Trivia 4 — Questions and Answers
Question 1: When must an employer furnish Form W-2 to employees?
- By December 31 of the tax year
- By January 31 following the tax year (Correct answer)
- By March 15 following the tax year
- By April 15 following the tax year
Correct answer: By January 31 following the tax year
Employers must provide W-2 forms to employees and file with the SSA by January 31 of the year following the tax year.
Question 2: What is 'disposable earnings' in the context of wage garnishments?
- Total gross wages
- Net pay after all voluntary deductions
- Earnings remaining after legally required deductions (Correct answer)
- Take-home pay after all deductions
Correct answer: Earnings remaining after legally required deductions
Disposable earnings are the amount left after deductions required by law, such as taxes and Social Security, and serve as the basis for calculating garnishment limits.
Question 3: Which payroll tax has no wage base limit—it applies to all covered wages?
- Social Security (OASDI)
- FUTA
- Medicare (HI) (Correct answer)
- State Unemployment Tax
Correct answer: Medicare (HI)
Medicare (Hospital Insurance) tax of 1.45% applies to all covered wages with no annual wage base cap, unlike Social Security tax.
Question 4: What is the penalty for a payroll deposit that is 1-5 days late?
- 2%
- 5% (Correct answer)
- 10%
- 15%
Correct answer: 5%
The IRS imposes a 2% penalty for deposits made 1–5 days late, increasing to 5% for 6–15 days late and 10% for 16+ days late.
Question 5: Under FLSA, what is the minimum salary threshold for the white-collar exemptions as of 2024?
- $455 per week
- $684 per week
- $844 per week (Correct answer)
- $1,000 per week
Correct answer: $844 per week
Effective July 1, 2024, the minimum salary threshold for the executive, administrative, and professional exemptions increased to $844 per week.
Question 6: Which method allows employers to calculate withholding by treating each pay period's wages as if paid annually?
- Percentage method
- Wage bracket method
- Annualized method (Correct answer)
- Supplemental flat rate method
Correct answer: Annualized method
The annualized method multiplies periodic wages by the number of pay periods per year, applies the annual tax rates, then divides the result back by the number of pay periods.
Question 7: What happens to unclaimed wages that an employer holds for an extended period?
- They are forfeited to the employer
- They must be remitted to the IRS
- They become subject to state unclaimed property (escheat) laws (Correct answer)
- They are donated to charity
Correct answer: They become subject to state unclaimed property (escheat) laws
Most states require employers to turn over unclaimed wages to the state after a dormancy period under escheat or abandoned property statutes.
Fundamental Payroll Certification Trivia 4
When must an employer furnish Form W-2 to employees?