PAYROLL COMPLIANCE
LEGISLATION COURSE
MIDTERM EXAM QUESTIONS
AND ANSWERS 2026 - 2027
Canada Pension Plan contributions must be withheld from employees
who: (4) - ANSWERS-- have reached the age of 18 but are under the
age of 70
- are in pensionable employment
- are not considered to be disabled by either Service Canada or
Retraite Québec
- are 65 years of age but are under the age of 70 and are in receipt of
the Canada or Québec Pension Plan retirement pension, but have not
filed an election to stop paying CPP contributions
Employment subject to CPP contributions: - ANSWERS--
Pensionable employment includes most employees in Canada under a
contract of service (where an employee-employer relationship exists)
- Canada also has reciprocal social security agreements with other
countries, allowing Canadian employees working in other countries to
continue contributing to the CPP.
Employment NOT subject to CPP contributions: - ANSWERS--
Employment in agriculture, or an agricultural enterprise, horticulture,
fishing, hunting, trapping, forestry, logging, or lumbering, by an
employer:
,o who pays the employee less than $250 in cash remuneration in a
calendar year; or
o employs the employee for a period of less than 25 working days in
the same year on terms providing for payment of cash remuneration
- employment of a casual nature other than for the purpose of the
employer's usual trade or business
- employment of a person, other than as an entertainer, in connection
with a circus, fair, parade, carnival, expositions, exhibition, or other
similar activity, if that person is:
o not regularly employed by that employer
o employed by that employer for less than seven days a year
- Employment of a person by a government body as an election
worker is that person:
o Is not a regular employee of the government body and
o Works for less than 35 hours in a calendar year
- employment as a teacher on exchange from a foreign country
- employment of a spouse or common-law partner if the employer
cannot deduct the remuneration paid as an expense under the Income
Tax Act
- employment of a member of a religious order who has taken a vow
of perpetual poverty. This applies whether the remuneration is paid
directly to the order or paid by the member of the order
- employment for which no cash remuneration is paid, where the
employee is the child of or is maintained by, the employer
- employment of a person who helps the employer in a disaster or a
rescue operation if the employee is not regularly employed by the
employer
, Payments & Benefits subject to CPP contributions generally fall into
the following categories: - ANSWERS-1. income from employment
2. taxable benefits and allowances
3. certain fees and honorariums
4. controlled tips
5. paid leave
6. benefits under certain wage-loss replacement plans
CPP contributions on non-cash taxable benefits: - ANSWERS-- When
an employer provides employees with non-cash taxable benefits, the
CRA requires that the value of the benefit be included in the
employee's earnings as it is earned or enjoyed.
Payments & Benefits NOT subject to CPP contributions: -
ANSWERS-1. death benefits
2. pension benefits
3. a payment at the end of employment that is not considered
employment income, for example, severance payments or retiring
allowances
4. wage-loss replacement plan benefits paid under a contract of
insurance
5. workers' compensation advances or loans
6. payments linked to special conditions under the Income Tax Act
LEGISLATION COURSE
MIDTERM EXAM QUESTIONS
AND ANSWERS 2026 - 2027
Canada Pension Plan contributions must be withheld from employees
who: (4) - ANSWERS-- have reached the age of 18 but are under the
age of 70
- are in pensionable employment
- are not considered to be disabled by either Service Canada or
Retraite Québec
- are 65 years of age but are under the age of 70 and are in receipt of
the Canada or Québec Pension Plan retirement pension, but have not
filed an election to stop paying CPP contributions
Employment subject to CPP contributions: - ANSWERS--
Pensionable employment includes most employees in Canada under a
contract of service (where an employee-employer relationship exists)
- Canada also has reciprocal social security agreements with other
countries, allowing Canadian employees working in other countries to
continue contributing to the CPP.
Employment NOT subject to CPP contributions: - ANSWERS--
Employment in agriculture, or an agricultural enterprise, horticulture,
fishing, hunting, trapping, forestry, logging, or lumbering, by an
employer:
,o who pays the employee less than $250 in cash remuneration in a
calendar year; or
o employs the employee for a period of less than 25 working days in
the same year on terms providing for payment of cash remuneration
- employment of a casual nature other than for the purpose of the
employer's usual trade or business
- employment of a person, other than as an entertainer, in connection
with a circus, fair, parade, carnival, expositions, exhibition, or other
similar activity, if that person is:
o not regularly employed by that employer
o employed by that employer for less than seven days a year
- Employment of a person by a government body as an election
worker is that person:
o Is not a regular employee of the government body and
o Works for less than 35 hours in a calendar year
- employment as a teacher on exchange from a foreign country
- employment of a spouse or common-law partner if the employer
cannot deduct the remuneration paid as an expense under the Income
Tax Act
- employment of a member of a religious order who has taken a vow
of perpetual poverty. This applies whether the remuneration is paid
directly to the order or paid by the member of the order
- employment for which no cash remuneration is paid, where the
employee is the child of or is maintained by, the employer
- employment of a person who helps the employer in a disaster or a
rescue operation if the employee is not regularly employed by the
employer
, Payments & Benefits subject to CPP contributions generally fall into
the following categories: - ANSWERS-1. income from employment
2. taxable benefits and allowances
3. certain fees and honorariums
4. controlled tips
5. paid leave
6. benefits under certain wage-loss replacement plans
CPP contributions on non-cash taxable benefits: - ANSWERS-- When
an employer provides employees with non-cash taxable benefits, the
CRA requires that the value of the benefit be included in the
employee's earnings as it is earned or enjoyed.
Payments & Benefits NOT subject to CPP contributions: -
ANSWERS-1. death benefits
2. pension benefits
3. a payment at the end of employment that is not considered
employment income, for example, severance payments or retiring
allowances
4. wage-loss replacement plan benefits paid under a contract of
insurance
5. workers' compensation advances or loans
6. payments linked to special conditions under the Income Tax Act
