Xero Certified Advisor Xero Payroll Management 2

Question 1

When processing payroll in Xero (US), which federal payroll tax is split equally between the employer and the employee?

Accepted Answer

FICA (Federal Insurance Contributions Act) — Social Security and Medicare

Answer

Federal income tax

Answer

FUTA (Federal Unemployment Tax Act)

Answer

State income tax

Question 2

What is the employee portion of the Social Security tax rate for US payroll?

Accepted Answer

6.2%

Answer

1.45%

Answer

7.65%

Answer

12.4%

Question 3

In Xero Payroll, what does 'post payroll' do after a payroll run is approved?

Accepted Answer

Creates journal entries in Xero's general ledger

Answer

Sends payslips to employees via email

Answer

Submits payroll tax payments directly to the IRS

Answer

Generates W-2 forms for all employees

Question 4

Which form must US employers file quarterly to report federal payroll taxes withheld and employer contributions?

Accepted Answer

Form 941

Answer

Form W-2

Answer

Form 940

Answer

Form 1099-NEC

Question 5

What is FUTA, and who is solely responsible for paying it?

Accepted Answer

A federal unemployment tax paid entirely by the employer

Answer

A federal tax withheld equally from both employer and employee

Answer

A state unemployment insurance tax shared between employer and employee

Answer

A Medicare surcharge for high-earning employees

Question 6

In Xero Payroll, what is the purpose of a 'deduction' on an employee's pay?

Accepted Answer

To reduce the employee's gross pay for items like health insurance premiums or 401(k) contributions

Answer

To add additional compensation to the employee's gross earnings

Answer

To record the employer's share of payroll tax expenses

Answer

To adjust the employee's assigned pay schedule

Question 7

In Xero Payroll, what is the difference between gross pay and net pay?

Accepted Answer

Gross pay is total earnings before deductions and taxes; net pay is the amount the employee actually receives

Answer

Gross pay is the hourly rate; net pay is the annual equivalent

Answer

Gross pay includes employer-paid benefits; net pay reflects base wages only

Answer

Gross pay applies to salaried employees; net pay applies to hourly workers