Fundamental Payroll Core Payroll Concepts Questions and Answers

Question 1

An employee works 45 hours in a single workweek.
The employee's regular rate of pay is $20 per hour.
Under the Fair Labor Standards Act (FLSA), what is the minimum gross pay this employee must receive for the week?

Accepted Answer

$950

Answer

$900

Answer

$1,000

Answer

$1,350

Question 2

Which of the following factors is most critical in determining whether a worker is classified as an employee versus an independent contractor?

Accepted Answer

The degree of control and independence in the work relationship

Answer

The worker's preference for classification

Answer

The issuance of a Form 1099-NEC at year-end

Answer

The duration of the working relationship

Question 3

According to the Fair Labor Standards Act (FLSA) recordkeeping requirements, for how long must an employer retain an employee's payroll records?

Accepted Answer

Three years

Answer

One year

Answer

Two years

Answer

Four years

Question 4

An employee has gross earnings of $2,000 for a pay period. They contribute $100 to a pre-tax 401(k) plan and have a $50 pre-tax deduction for health insurance. What are the employee's taxable wages for Social Security and Medicare (FICA) taxes?

Accepted Answer

$1,850

Answer

$2,000

Answer

$1,900

Answer

$1,950

Question 5

What is the primary purpose of an employee completing IRS Form W-4, Employee's Withholding Certificate?

Accepted Answer

To allow the employer to determine the correct amount of federal income tax to withhold.

Answer

To verify the employee's eligibility to work in the United States.

Answer

To report the employee's annual wages and taxes withheld to the Social Security Administration.

Answer

To enroll the employee in company-sponsored benefits programs.

Question 6

Which of the following are the two components of the Federal Insurance Contributions Act (FICA) tax that are withheld from an employee's wages?

Accepted Answer

Social Security and Medicare

Answer

Federal Income Tax and State Income Tax

Answer

Social Security and Federal Unemployment (FUTA)

Answer

Medicare and State Unemployment (SUTA)