PF2 FINAL EXAM | POST- TEST PAYROLL FUNDAMENTALS 2 EXAM
NEWEST 2026/2027 ACTUAL EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) ALL ANSWERED/ ALREADY
GRADED A+ | BRAND NEW! | 100% GUARANTEED PASS
1. The primary source of payroll legislation in Canada is:
A. The Canada Labour Code
B. Provincial employment standards legislation
C. The Income Tax Act
D. Both provincial and federal legislation
Correct Answer: D
Rationale: Payroll in Canada is governed by both federal and provincial/territorial
legislation. The Canada Labour Code applies to federally regulated employers, while
provincial employment standards Acts apply to provincially regulated employers.
2. Which of the following is NOT a source of payroll deductions?
A. Income tax
B. Canada Pension Plan (CPP) contributions
C. Employment Insurance (EI) premiums
D. Workers' compensation
Correct Answer: D
Rationale: Workers' compensation is an employer cost, not a deduction from employee
pay. While employers pay WCB premiums, they are not deducted from employee wages.
3. The Canada Revenue Agency (CRA) is responsible for administering:
A. Employment standards
B. Income tax deductions
C. Workers' compensation
D. Labour relations
Correct Answer: B
Rationale: The CRA is responsible for administering income tax deductions, CPP
contributions, and EI premiums. Provincial governments administer employment
standards, WCB, and labour relations.
,4. In which province would a payroll practitioner find the highest maximum
insurable earnings for Workers' Compensation?
A. Ontario
B. British Columbia
C. Alberta
D. Varies by province
Correct Answer: D
Rationale: Each province and territory sets its own maximum insurable earnings for
WCB. The practitioner must know the WCB rates and maximums for the province in
which the employee works.
5. An employer's obligation to remit source deductions is governed by:
A. The Employment Standards Act
B. The Income Tax Act
C. The Canada Labour Code
D. The Human Rights Act
Correct Answer: B
Rationale: The Income Tax Act governs the withholding and remittance of source
deductions, including income tax, CPP, and EI. The CRA enforces these requirements.
6. Which of the following is NOT a statutory deduction?
A. Income tax
B. CPP contributions
C. EI premiums
D. Union dues
Correct Answer: D
Rationale: Statutory deductions are required by law: income tax, CPP, and EI. Union dues
are a non-statutory deduction (authorized by the employee, usually via a collective
agreement).
7. Source deductions must be remitted to the CRA by the:
A. 15th of the following month
B. 25th of the following month
,C. Last day of the following month
D. Varies based on remitter type
Correct Answer: D
Rationale: Remittance due dates vary based on the remitter category (e.g., regular
remitter, accelerated remitter, large remitter). The payroll practitioner must know the
correct remittance schedule.
8. Which of the following statements about the Canada Pension Plan is TRUE?
A. It is a voluntary pension plan
B. Contributions are deducted from employees only
C. It is a mandatory social insurance program
D. The maximum pensionable earnings are the same as the maximum insurable earnings
for EI
Correct Answer: C
Rationale: The CPP is a mandatory social insurance program. Contributions are shared
equally between employee and employer. The maximum pensionable earnings for CPP
differ from the maximum insurable earnings for EI.
9. Employment Insurance (EI) premiums are calculated on:
A. All earnings
B. Insurable earnings
C. Pensionable earnings
D. Taxable earnings
Correct Answer: B
Rationale: EI premiums are calculated on insurable earnings, up to the maximum
insurable earnings (MIE). Not all earnings are insurable (e.g., severance pay may not be
insurable).
10. A payroll practitioner's responsibility regarding privacy includes:
A. Sharing employee information with other employees
B. Protecting employee personal information
C. Discussing payroll details with family members
D. Posting payroll details publicly
, Correct Answer: B
Rationale: Payroll practitioners have a legal and ethical obligation to protect employee
personal information under privacy legislation, including PIPEDA and provincial privacy
Acts.
11. The maximum annual insurable earnings for EI in 2026 is:
A. $61,500
B. $65,700
C. $72,500
D. Varies based on the province of employment
Correct Answer: B
Rationale: The EI maximum insurable earnings for 2026 is $65,700 (subject to annual
review).
12. The employer's share of CPP contributions is:
A. Equal to the employee's share
B. 1.4 times the employee's share
C. 2 times the employee's share
D. 0.75 times the employee's share
Correct Answer: A
Rationale: The employer's CPP contribution is equal to the employee's contribution. The
employer also pays 1.4 times the employee's basic exemption.
13. The employer's EI premium rate is:
A. Equal to the employee's rate
B. 1.4 times the employee's rate
C. 2 times the employee's rate
D. 0.75 times the employee's rate
Correct Answer: B
Rationale: The employer pays 1.4 times the employee's EI premium rate for most
employers (reduced rate for Quebec employers).
14. An employee's CPP contributions are calculated on:
NEWEST 2026/2027 ACTUAL EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) ALL ANSWERED/ ALREADY
GRADED A+ | BRAND NEW! | 100% GUARANTEED PASS
1. The primary source of payroll legislation in Canada is:
A. The Canada Labour Code
B. Provincial employment standards legislation
C. The Income Tax Act
D. Both provincial and federal legislation
Correct Answer: D
Rationale: Payroll in Canada is governed by both federal and provincial/territorial
legislation. The Canada Labour Code applies to federally regulated employers, while
provincial employment standards Acts apply to provincially regulated employers.
2. Which of the following is NOT a source of payroll deductions?
A. Income tax
B. Canada Pension Plan (CPP) contributions
C. Employment Insurance (EI) premiums
D. Workers' compensation
Correct Answer: D
Rationale: Workers' compensation is an employer cost, not a deduction from employee
pay. While employers pay WCB premiums, they are not deducted from employee wages.
3. The Canada Revenue Agency (CRA) is responsible for administering:
A. Employment standards
B. Income tax deductions
C. Workers' compensation
D. Labour relations
Correct Answer: B
Rationale: The CRA is responsible for administering income tax deductions, CPP
contributions, and EI premiums. Provincial governments administer employment
standards, WCB, and labour relations.
,4. In which province would a payroll practitioner find the highest maximum
insurable earnings for Workers' Compensation?
A. Ontario
B. British Columbia
C. Alberta
D. Varies by province
Correct Answer: D
Rationale: Each province and territory sets its own maximum insurable earnings for
WCB. The practitioner must know the WCB rates and maximums for the province in
which the employee works.
5. An employer's obligation to remit source deductions is governed by:
A. The Employment Standards Act
B. The Income Tax Act
C. The Canada Labour Code
D. The Human Rights Act
Correct Answer: B
Rationale: The Income Tax Act governs the withholding and remittance of source
deductions, including income tax, CPP, and EI. The CRA enforces these requirements.
6. Which of the following is NOT a statutory deduction?
A. Income tax
B. CPP contributions
C. EI premiums
D. Union dues
Correct Answer: D
Rationale: Statutory deductions are required by law: income tax, CPP, and EI. Union dues
are a non-statutory deduction (authorized by the employee, usually via a collective
agreement).
7. Source deductions must be remitted to the CRA by the:
A. 15th of the following month
B. 25th of the following month
,C. Last day of the following month
D. Varies based on remitter type
Correct Answer: D
Rationale: Remittance due dates vary based on the remitter category (e.g., regular
remitter, accelerated remitter, large remitter). The payroll practitioner must know the
correct remittance schedule.
8. Which of the following statements about the Canada Pension Plan is TRUE?
A. It is a voluntary pension plan
B. Contributions are deducted from employees only
C. It is a mandatory social insurance program
D. The maximum pensionable earnings are the same as the maximum insurable earnings
for EI
Correct Answer: C
Rationale: The CPP is a mandatory social insurance program. Contributions are shared
equally between employee and employer. The maximum pensionable earnings for CPP
differ from the maximum insurable earnings for EI.
9. Employment Insurance (EI) premiums are calculated on:
A. All earnings
B. Insurable earnings
C. Pensionable earnings
D. Taxable earnings
Correct Answer: B
Rationale: EI premiums are calculated on insurable earnings, up to the maximum
insurable earnings (MIE). Not all earnings are insurable (e.g., severance pay may not be
insurable).
10. A payroll practitioner's responsibility regarding privacy includes:
A. Sharing employee information with other employees
B. Protecting employee personal information
C. Discussing payroll details with family members
D. Posting payroll details publicly
, Correct Answer: B
Rationale: Payroll practitioners have a legal and ethical obligation to protect employee
personal information under privacy legislation, including PIPEDA and provincial privacy
Acts.
11. The maximum annual insurable earnings for EI in 2026 is:
A. $61,500
B. $65,700
C. $72,500
D. Varies based on the province of employment
Correct Answer: B
Rationale: The EI maximum insurable earnings for 2026 is $65,700 (subject to annual
review).
12. The employer's share of CPP contributions is:
A. Equal to the employee's share
B. 1.4 times the employee's share
C. 2 times the employee's share
D. 0.75 times the employee's share
Correct Answer: A
Rationale: The employer's CPP contribution is equal to the employee's contribution. The
employer also pays 1.4 times the employee's basic exemption.
13. The employer's EI premium rate is:
A. Equal to the employee's rate
B. 1.4 times the employee's rate
C. 2 times the employee's rate
D. 0.75 times the employee's rate
Correct Answer: B
Rationale: The employer pays 1.4 times the employee's EI premium rate for most
employers (reduced rate for Quebec employers).
14. An employee's CPP contributions are calculated on:
