OCPS Payroll Processing & Tax Compliance 2 — Questions and Answers
Question 1: An employer pays wages semi-monthly. How many pay periods occur in a calendar year?
- 24 (Correct answer)
- 26
- 12
- 52
Correct answer: 24
Semi-monthly means twice per month, so 2 × 12 = 24 pay periods per year.
Question 2: Which IRS form must an employer use to report annual wages and federal income tax withheld for each employee?
- W-2 (Correct answer)
- 1099-NEC
- 941
- W-4
Correct answer: W-2
Form W-2 is the Wage and Tax Statement used to report annual wages and withholding to employees and the IRS.
Question 3: Under the FLSA, what is the standard overtime pay rate for nonexempt employees?
- 1.5 times the regular rate (Correct answer)
- 2 times the regular rate
- 1.25 times the regular rate
- Double time plus a half
Correct answer: 1.5 times the regular rate
The FLSA requires overtime pay of at least 1.5 times the employee's regular rate for hours over 40 in a workweek.
Question 4: Which payroll tax deposit schedule applies to employers with a lookback period tax liability of $50,000 or less?
- Monthly (Correct answer)
- Semi-weekly
- Annual
- Quarterly
Correct answer: Monthly
Employers whose lookback period liability is $50,000 or less are classified as monthly depositors.
Question 5: What is the wage base limit for Social Security (OASDI) tax in recent years?
- A cap applies; earnings above the limit are not subject to OASDI (Correct answer)
- There is no wage base limit for OASDI
- The limit applies only to employers, not employees
- The limit is the same as the Medicare wage base
Correct answer: A cap applies; earnings above the limit are not subject to OASDI
Social Security tax applies only up to an annual wage base limit; wages above that limit are exempt from the OASDI portion.
Question 6: A worker provides services using their own tools, sets their own hours, and works for multiple clients. They are most likely classified as a(n):
- Independent contractor (Correct answer)
- Common-law employee
- Statutory employee
- Leased employee
Correct answer: Independent contractor
Behavioral and financial control indicators — own tools, own schedule, multiple clients — point to independent contractor status.
Question 7: Which of the following correctly describes the 'lookback period' used to determine payroll tax deposit frequency?
- The 12-month period ending June 30 of the prior year (Correct answer)
- The most recent calendar quarter
- The prior calendar year
- The 12-month period ending December 31 of the prior year
Correct answer: The 12-month period ending June 30 of the prior year
The lookback period is the 12-month period from July 1 of the second preceding year through June 30 of the prior year.
OCPS Payroll Processing & Tax Compliance 2
An employer pays wages semi-monthly.
How many pay periods occur in a calendar year?