HR Payroll & Benefits Software 1

Question 1

What is the primary function of payroll software?

Accepted Answer

Calculating and processing employee compensation and deductions

Answer

Payroll software automates the calculation of gross pay, deductions, taxes, and net pay, and manages the disbursement of employee compensation.

Question 2

Which U.S. federal tax must employers withhold from employee paychecks?

Accepted Answer

Federal income tax and FICA (Social Security and Medicare)

Answer

Employers are required to withhold federal income tax and FICA taxes (Social Security at 6.2% and Medicare at 1.45%) from each paycheck.

Question 3

What is 'direct deposit' in payroll software?

Accepted Answer

Electronically transferring net pay directly to an employee's bank account

Answer

Direct deposit is an electronic payment method where net pay is transferred directly to the employee's designated bank account on payday.

Question 4

What does 'gross pay' mean in payroll processing?

Accepted Answer

Total earnings before any deductions or taxes

Answer

Gross pay is the total amount an employee earns before any taxes, benefits contributions, or other deductions are subtracted.

Question 5

Which form does a U.S. employee complete to determine federal income tax withholding?

Accepted Answer

W-4

Answer

The W-4 form (Employee's Withholding Certificate) is completed by employees to tell employers how much federal income tax to withhold.

HR - Software Practice Test