1
FPC FUNDAMENTAL PAYROLL
CERTIFICATION EXAM – EXAM PREP GUIDE |
LATEST UPDATE 2026–2027 | 200+ PRACTICE
QUESTIONS AND ANSWERS
Core Payroll Concepts
Calculation of the Paycheck
Compliance, Research, and Resources
Audits
Accounting
Payroll Process and Supporting Systems
Payroll Administration and Management
,2
Question 1: A business engages a graphic designer to create a logo. The
designer works from home, sets her own hours, uses her own software, and is
paid a flat fee upon delivery. The business also requires the designer to attend
weekly team meetings and follow the company’s brand guidelines in detail.
Under the IRS common-law control test, which factor most strongly supports
employee classification?
A) The designer works from home.
B) The designer uses her own software.
C) The business requires attendance at weekly meetings and detailed adherence
to brand guidelines.
D) The designer is paid a flat fee.
Correct Answer: C
Behavioral control—whether the business directs and controls how the worker
performs the work—is a primary factor in the common-law test. Requiring
attendance at meetings and dictating detailed methods points toward employee
status. Working from home, using one’s own tools, and flat-fee payment are
factors that may support independent contractor status, but they are outweighed
by the behavioral control in this scenario.
Question 2: An employer hires a worker as an independent contractor but
controls the worker’s schedule, provides all equipment, and supervises daily
tasks. The worker later files for unemployment benefits. What is the most
significant payroll risk for the employer?
A) The worker may be owed overtime under the FLSA.
B) The employer may face liability for unpaid employment taxes, penalties, and
interest due to misclassification.
C) The employer must issue both a Form W-2 and a Form 1099-NEC.
D) The employer can rely on the contract label to avoid liability.
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Correct Answer: B
When the actual working relationship exhibits employee-like control, the
employer faces significant exposure for unpaid withholding, employer FICA,
FUTA, and related penalties. The contract label does not override the facts.
While FLSA overtime exposure may also exist, the most direct payroll
compliance risk is the tax liability from misclassification. Issuing both forms is
not a legitimate corrective approach.
Question 3: A nonexempt employee is paid $18.00 per hour and works 48 hours
in a workweek. What is the employee’s total gross pay for the week under FLSA
rules?
A) $864.00
B) $936.00
C) $972.00
D) $1,008.00
Correct Answer: B
Regular rate: $18.00. Straight-time pay for all hours: 48 × $18.00 = $864.00.
Overtime premium: 8 hours × $9.00 (half-time) = $72.00. Total gross: $864.00
+ $72.00 = $936.00. Option A pays only straight time; Option C applies 1.5× to
all hours, which is incorrect; Option D miscalculates the premium.
Question 4: Which of the following payments is generally included in the
regular rate of pay for overtime calculation?
A) Discretionary bonuses
B) Payments for occasional periods when no work is performed due to vacation
C) Nondiscretionary production bonuses
D) Reimbursement of business expenses
Correct Answer: C
Nondiscretionary bonuses—promised or expected based on performance—must
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be included in the regular rate. Discretionary bonuses, vacation pay, and
expense reimbursements are generally excludable. Including nondiscretionary
bonuses ensures the overtime premium is calculated on the employee’s true
regular rate.
===== Page 2 =====
Question 5: An employer deposits federal employment taxes on a semiweekly
schedule. Payday for the payroll is Friday. By what day must the deposit
generally be made?
A) The following Wednesday
B) The following Friday
C) The second Wednesday after payday
D) The same Friday
Correct Answer: A
Under the semiweekly deposit rule, for paydays on Wednesday, Thursday, or
Friday, the deposit is due by the following Wednesday. For paydays on
Saturday, Sunday, Monday, or Tuesday, the deposit is due by the following
Friday. Option A correctly applies the Wednesday-after-Friday-payday rule.
Question 6: An employer’s FUTA liability is calculated on the first $7,000 of
wages paid to each employee. The gross FUTA rate is 6.0%. If the employer
receives the maximum credit for state unemployment taxes, what is the effective
net FUTA rate?
A) 0.6%
B) 1.0%
C) 5.4%
D) 6.0%
FPC FUNDAMENTAL PAYROLL
CERTIFICATION EXAM – EXAM PREP GUIDE |
LATEST UPDATE 2026–2027 | 200+ PRACTICE
QUESTIONS AND ANSWERS
Core Payroll Concepts
Calculation of the Paycheck
Compliance, Research, and Resources
Audits
Accounting
Payroll Process and Supporting Systems
Payroll Administration and Management
,2
Question 1: A business engages a graphic designer to create a logo. The
designer works from home, sets her own hours, uses her own software, and is
paid a flat fee upon delivery. The business also requires the designer to attend
weekly team meetings and follow the company’s brand guidelines in detail.
Under the IRS common-law control test, which factor most strongly supports
employee classification?
A) The designer works from home.
B) The designer uses her own software.
C) The business requires attendance at weekly meetings and detailed adherence
to brand guidelines.
D) The designer is paid a flat fee.
Correct Answer: C
Behavioral control—whether the business directs and controls how the worker
performs the work—is a primary factor in the common-law test. Requiring
attendance at meetings and dictating detailed methods points toward employee
status. Working from home, using one’s own tools, and flat-fee payment are
factors that may support independent contractor status, but they are outweighed
by the behavioral control in this scenario.
Question 2: An employer hires a worker as an independent contractor but
controls the worker’s schedule, provides all equipment, and supervises daily
tasks. The worker later files for unemployment benefits. What is the most
significant payroll risk for the employer?
A) The worker may be owed overtime under the FLSA.
B) The employer may face liability for unpaid employment taxes, penalties, and
interest due to misclassification.
C) The employer must issue both a Form W-2 and a Form 1099-NEC.
D) The employer can rely on the contract label to avoid liability.
,3
Correct Answer: B
When the actual working relationship exhibits employee-like control, the
employer faces significant exposure for unpaid withholding, employer FICA,
FUTA, and related penalties. The contract label does not override the facts.
While FLSA overtime exposure may also exist, the most direct payroll
compliance risk is the tax liability from misclassification. Issuing both forms is
not a legitimate corrective approach.
Question 3: A nonexempt employee is paid $18.00 per hour and works 48 hours
in a workweek. What is the employee’s total gross pay for the week under FLSA
rules?
A) $864.00
B) $936.00
C) $972.00
D) $1,008.00
Correct Answer: B
Regular rate: $18.00. Straight-time pay for all hours: 48 × $18.00 = $864.00.
Overtime premium: 8 hours × $9.00 (half-time) = $72.00. Total gross: $864.00
+ $72.00 = $936.00. Option A pays only straight time; Option C applies 1.5× to
all hours, which is incorrect; Option D miscalculates the premium.
Question 4: Which of the following payments is generally included in the
regular rate of pay for overtime calculation?
A) Discretionary bonuses
B) Payments for occasional periods when no work is performed due to vacation
C) Nondiscretionary production bonuses
D) Reimbursement of business expenses
Correct Answer: C
Nondiscretionary bonuses—promised or expected based on performance—must
, 4
be included in the regular rate. Discretionary bonuses, vacation pay, and
expense reimbursements are generally excludable. Including nondiscretionary
bonuses ensures the overtime premium is calculated on the employee’s true
regular rate.
===== Page 2 =====
Question 5: An employer deposits federal employment taxes on a semiweekly
schedule. Payday for the payroll is Friday. By what day must the deposit
generally be made?
A) The following Wednesday
B) The following Friday
C) The second Wednesday after payday
D) The same Friday
Correct Answer: A
Under the semiweekly deposit rule, for paydays on Wednesday, Thursday, or
Friday, the deposit is due by the following Wednesday. For paydays on
Saturday, Sunday, Monday, or Tuesday, the deposit is due by the following
Friday. Option A correctly applies the Wednesday-after-Friday-payday rule.
Question 6: An employer’s FUTA liability is calculated on the first $7,000 of
wages paid to each employee. The gross FUTA rate is 6.0%. If the employer
receives the maximum credit for state unemployment taxes, what is the effective
net FUTA rate?
A) 0.6%
B) 1.0%
C) 5.4%
D) 6.0%
