Payroll Processing & Administration Flashcards

Which federal form must employees complete to indicate their withholding allowances for federal income tax purposes?

Answer: Form W-4

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

What is the current Social Security tax rate paid by employees on wages up to the wage base limit?

Answer: 6.20%

Employees pay 6.20% Social Security tax on wages up to the annual wage base limit; employers match this amount for a combined rate of 12.40%.

Form 941 must be filed with the IRS on what schedule?

Answer: Quarterly

Form 941 (Employer's Quarterly Federal Tax Return) is filed quarterly to report wages paid, federal income tax withheld, and Social Security/Medicare taxes.

Which of the following is NOT subject to FICA (Federal Insurance Contributions Act) taxes?

Answer: Employer-paid health insurance premiums

Employer-paid health insurance premiums are excluded from FICA taxes because they are not considered wages for Social Security and Medicare purposes.

What is the Medicare tax rate withheld from employee wages?

Answer: 1.45%

The employee Medicare tax rate is 1.45%; employers also pay 1.45%, for a combined rate of 2.90%, with no wage base limit.

Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay at what rate for hours worked over 40 in a workweek?

Answer: 1.5 times the regular rate

The FLSA requires non-exempt employees to be paid at least 1.5 times (time-and-a-half) their regular rate of pay for all hours worked over 40 in a single workweek.

Which payroll tax is paid solely by the employer and funds the federal unemployment insurance program?

Answer: FUTA

FUTA (Federal Unemployment Tax Act) is an employer-only tax; employees do not contribute to it, and the proceeds fund federal unemployment benefits.