Payroll Fundamentals 1 Midterm 94 Questions with Verified Answers,100% CORRECT

Payroll Fundamentals 1 Midterm 94 Questions with Verified Answers Commencement package (Ch.1) - CORRECT ANSWER -Organization specific forms (personal information forms) -Government forms (federal and provincial personal tax credits return) -Benefit forms (insurance enrollment forms) Hiring form (ch.1) - CORRECT ANSWER May include information on their position such as department, manager, start date, salary/hourly wage, and benefit entitlement Information that must be provided to employees (ch.1) - CORRECT ANSWER -Employee name -Date of pay period -Rates of pay and hours of work at each rate -Gross earnings -Itemized deductions -Net pay TD1- WS is used to calculate partial claim amounts for... (ch.1) - CORRECT ANSWER -Age -Canada caregiver amount for eligible dependent or spouse or common-law partner -Canada caregiver amount for dependent(s) age 18 or over Federal TD1, Provincial/territorial TD1, and Quebec TP-1015.3-V require... (ch.1) - CORRECT ANSWER -Name -Date of birth -Social insurance number Other credits employees can claim on their Federal and Provincial/Territorial TD1 to lower taxes (ch.1) - CORRECT ANSWER -Being a caregiver -Being over 65 -Receiving a pension -Being or supporting a student in post-secondary studies -Being disabled -Supporting a spouce -Living alone (Quebec) -Having children under 18 (Saskatchewan and Yukon) Do you have to claim basic personal provincial/territorial credits? (ch.1) - CORRECT ANSWER -No, if only doing basic -Yes, if claiming children under 18 (Sakatchewan and Yukon) -Yes, always (Quebec) Employers should review TD1 and TP-1015.3-V forms to ensure (ch.2) - CORRECT ANSWER -Correct employee name, Date of birth, Address, and SIN -Correct amounts on the form -Amounts claimed are totaled correctly -Form does not contain obvious false statements -The form is signed a dated What certain information must appear on an employee's statement of wages? (ch.2) - CORRECT ANSWER -Name -Rate of pay and hours worked at each rate -Date of pay period -Gross and net pay -Itemized deductions Renumeration (ch.2) - CORRECT ANSWER Employee received compensation or pay for the services they perform -AKA employee income when employer-employee relationship exists Employee income can be categorized into what? (ch.2) - CORRECT ANSWER -Earnings -Allowances -Benefits -Taxable expense reimbursements Earnings can be paid as... (ch.2) - CORRECT ANSWER -Salary -Rate for each hour worked -Rate per piece of goods produced or picked -Disability payment for time off due to illness -Payment for vacation time -Premium payment for overtime -Premium payment for hours worked on a shift Earnings are... (ch.2) - CORRECT ANSWER -Pensionable -Insurable -Taxable ...therefore subject to all statutory deductions Define allowances (ch.2) - CORRECT ANSWER The additional dollar amounts paid to employees for the use, or anticipated use of their personal property for business purposes What are the common types of allowances? (ch.2) - CORRECT ANSWER -Car -Meals -Uniforms -Safety shoes or other types of clothing Allowances are... (ch.2) - CORRECT ANSWER -Not considered income (under certain conditions) ...therefore not subject to statutory withholdings Define benefits (ch.2) - CORRECT ANSWER Dollar values attributed to something the employer has either provided to an employee or paid for on behalf of the employee Benefits are... (ch.2) - CORRECT ANSWER -Not included in income (under certain circumstances) ...therefore not subject to statutory dedcuctions Define expense reimbursements (ch.2) - CORRECT ANSWER Dollar amounts paid to employees to cover expenses that they incur while performing their job Expense reimbursements are.. (ch.2) - CORRECT ANSWER -Usually submitted through the accounting department ...therefore not considered in the calculation of employee income -Can go through payroll, in which case they are not subject to statutory deductions, but WILL affect net pay If a reimbursement is for personal living expenses it is... (ch.2) - CORRECT ANSWER -Taxable to the employee -Included in income -Subject to statutory deductions What are the factors that affect selecting frequency of pay periods (ch.2) - CORRECT ANSWER -Accounting cycles -Payment delays -Pay period frequencies that have been negotiated Define regular earnings (ch.2) - CORRECT ANSWER The dollar amount paid to employees on a pay period basis for the performance of their day-to-day duties List the types of regular earnings (ch.2) - CORRECT ANSWER -Salary -Hourly wages -Piecework -Self-insured disability payments -Vacation pay -Overtime -Shift premiums Define salary, and what is the formula for calculating it? (ch.2) - CORRECT ANSWER -A fixed amount of earnings paid to an employee per pay period Annual salary ------------------- Number of pays Hourly rate equation (ch.2) - CORRECT ANSWER Salary per pay period ------------------------------------ Pay period normal working hours Annual salary -------------------------------- Annual normal working hours Daily rate equation (ch.2) - CORRECT ANSWER Salary per pay period --------------------------- Pay period working days Annual salary ----------------------- Annual working days Define wages (ch.2) - CORRECT ANSWER Earnings which are based on the amount of time worked, usually at a rate per hour or per day Hourly rates are a common method in what field of work? (ch.2) - CORRECT ANSWER -Manufacturing -Production -Unionized environments Daily and hourly earnings equations (ch.2) - CORRECT ANSWER Hourly rate X Pay period regular hours worked Daily rate X Pay period days worked Define piecework and give it's equation (ch.2) - CORRECT ANSWER -Rate of pay earned per unit of production Rate X Number of pieces What are the main types of self-insured plans coverage? (ch.2) - CORRECT ANSWER -Sick pay -Short-term disability -Long-term disability Define sick pay (ch.2) - CORRECT ANSWER An amount paid to an employee who is absent from work due to illness or injury What is the difference between formal and informal plans for sick pay? (ch.2) - CORRECT ANSWER -Formal plans outline the amount of sick leave available, amount of sick pay, and if it carries over in the next year -Informal plans are based on the manager's discretion What are the two types of Wage-Loss Replacement Plans (ch.2) - CORRECT ANSWER -Short-term disability -Long-term disability How much is one week worth of vacationable earnings? (ch.2) - CORRECT ANSWER -2% -1/52 for Saskatchewan Vacationable earnings equation (ch.2) - CORRECT ANSWER Vacationable earnings X vacation percentage or fraction Define shift premium (ch.2) - CORRECT ANSWER Additional amounts paid over and above an employee's normal salary or hourly rate for working on an evening or midnight shift Shift premium equation (ch.2) - CORRECT ANSWER (hourly rate X shift premium %) X hours worked on shift Fixed dollar amount X hours worked on shift Fixed dollar amount X Number of shifts Overtime pay equation (ch.2) - CORRECT ANSWER [(hourly rate X 1.5) X (hours worked- legislated overtime threshold)] What is the order of calculating statutory deduction (ch.2) - CORRECT ANSWER -C/QPP -EI -QPIP (Quebec only) -Federal and provincial taxes -Northwest territories/Nunavut payroll taxes What are the CPP and QPP rates? (ch.2) - CORRECT ANSWER -CPP 4.95% -QPP 5.40% Manual CPP equation (ch.2) - CORRECT ANSWER (Salary - Pay period exemption) X CPP rate Or look it up in the little book C/QPP is calculated on what? (ch.2) - CORRECT ANSWER Gross pensionable/taxable income -earnings -taxable allowances -cash taxable benefits -non-cash taxable benefits EI is calculated on what? (ch.2) - CORRECT ANSWER Gross insurable income -earnings -taxable allowances -cash taxable benefits Federal and provincial taxes are calculated on what? (ch.2) - CORRECT ANSWER Net taxable income -earnings -taxable allowances -taxable benefits -LESS any deductions allowed Gross earnings equation (ch.2) - CORRECT ANSWER Earnings + Taxable allowances + Non-taxable allowances + Cash taxable benefits Gross pensionable/taxable income equation (ch.2) - CORRECT ANSWER Earnings + Taxable allowances + Cash taxable benefit + Non-cash taxable benefit Gross insurable income equation (ch.2) - CORRECT ANSWER Earnings + Taxable allowance + Cash taxable benefit Taxable renumeration equation (NT/NU) (ch.2) - CORRECT ANSWER Earnings + Taxable allowances + Cash taxable benefits + Non-cash taxable benefit Taxable cash allowances are... (ch.3) - CORRECT ANSWER -Are added to employee's earnings and are a part of their take home pay -INCLUDED in Gross Earnings (GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable Earnings (GEI) -SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax Taxable expense reimbursements are... (ch.3) - CORRECT ANSWER -INCLUDED in Gross Earnings (GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable Earnings (GEI) -SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax * Taxable benefits are... (ch.3) - CORRECT ANSWER -Determined if taxable to the employee by the CRA or RQ -IF employer pays cost of benefit to a third party the value is included in the employee's income as NON-CASH TAXABLE BENEFIT -IF the employer reimburses employees for money they paid for the benefit the reimbursement is included in the employees income as a CASH TAXABLE BENEFIT - Added to employee's earnings and are a part of their take home pay Non-cash taxable benefits are.. (ch.3) - CORRECT ANSWER -SUBJECT to all statutory withholdings except for EI and QPIP -Is only a value added to to the employee's pay for the purpose of calculating statutory deductions Define car allowance (ch.3) - CORRECT ANSWER -An amount paid or reimbursed to an employee who uses their personal automobile for business -Taxability is based on whether the allowance is considered reasonable or unreasonable by the federal and Quebec government Car allowances can be provided as a... (ch.3) - CORRECT ANSWER -Flat amount -Fixed amount per business km -Credit card or reimbursement for gas purchases Reasonable car allowance is... (ch.3) - CORRECT ANSWER -The allowance is based solely on business km -The amount provided is based on government prescribed reasonable guidelines ($.54 first 5,000 km, $.48 each km after) -The employer does not reimburse the employee for expenses related to the same use of the vehicle Unreasonable car allowance is... (ch.3) - CORRECT ANSWER -Flat amount that is not based solely on business km -Fixed amount per business km is either lower or higher than government prescribed reasonable rates -Credit card of reimbursement for gas purchases Define meal allowance (ch.3) - CORRECT ANSWER A reimbursement intended to cover the cost of missed meals due to working over time and meal expenses incurred while on employer business Overtime meal allowances are non-taxable for Canada if... (ch.3) - CORRECT ANSWER -Reasonable ( up to $17) -Employee must work two or more hours of overtime -Overtime is infrequent Overtime meal allowances are non-taxable for Quebec if... (ch.3) - CORRECT ANSWER -Overtime is at the request of the employer and is over 2 hours -Occur on an occasional basis -Employee presents receipts -Value of the meal is reasonable Meal allowance on a business trip (Ch.3) - CORRECT ANSWER Are considered business-related expense and is not included in income Define clothing allowance (ch.3) - CORRECT ANSWER An amount paid or reimbursed for the purchase of a particular type of clothing required for work Clothing allowance can be provided as.. (ch.3) - CORRECT ANSWER -An amount based on receipts submitted -A flat dollar amount The cost of protective clothing not supported by receipts is non-taxable if... (Ch.3) - CORRECT ANSWER -The law requires employees to wear protective clothing -Employee bought the protective clothing -Reimbursement is reasonable Clothing allowances are taxable if... (ch.3) - CORRECT ANSWER -The clothing is neither a distincitve uniform nor required for safety reasons -They are subject to statutory deductions; with no additional GST/HST/QST components Define cash benefit (ch.3) - CORRECT ANSWER When an employer reimburses an employee for an item that is considered a benefit Registered Retirement Savings Plan are considered non-cash taxable benefits when... (ch.3) - CORRECT ANSWER -Employee cannot withdraw the amounts until they are retired -Can only withdraw under Home Buyers' Plan or Lifelong Learning Plan Group term life insurance plans equation (ch.3) - CORRECT ANSWER Coverage amount= Annual salary X coverage multiplier Monthly taxable benefit= Coverage amount X premium rate -------------------------------------- 1,000 Pay period taxable benefit= Monthly taxable benefit X 12 ------------------------------- Pay period frequency Group sickness and accident insurance plans include... (ch.3) - CORRECT ANSWER -Short term disability -Long term disability -Accident insurance plans Private health insurance plans can cover what? (ch.3) - CORRECT ANSWER -Supplementary hospital -Drugs -Private duty nursing -Paramedical services -Medical supplies and services -Out of province emergency -Hearing aids -vision care -Dental expense Employee assistance plans cover... (ch.3) - CORRECT ANSWER -Physical or mental counseling -Family counseling Counseling services outside of an assistance plan, that are not taxable are... (ch.3) - CORRECT ANSWER -Physical or mental counseling -Re-employment (job placement counseling) -Retirement counseling Canada gift and award guidelines (ch.3) - CORRECT ANSWER -No limit -Single $500 exemption to total of all gift and awards -Long service awards do not affect the single $500 exemption -Near cash gifts and awards are treated the same a non-cash taxable benefits -Gifts and awards in cash are not subject to GST/QST/HST -Material gifts and awards are subject to GST/QST/HST Quebec gift and award guidelines (ch.3) - CORRECT ANSWER -No limit -$500 exemption for gifts -$500 exemption for awards -Gifts and awards paid in cash are taxable -Gift certificates, gift coupons, and smart cards are not considered taxable CRA guidelines for cell phone use not being a Taxable benefit (ch.3) - CORRECT ANSWER -Plan's cost is reasonable -Basic plan with fixed cost -No charges over the fixed cost of the basic amount RQ guidelines for cell phone and internet use not being a taxable benefit (ch.3) - CORRECT ANSWER -Services are primarily for the employer -Personal use does not result in addition fees What are the two types of loans offered by employers? (ch.3) - CORRECT ANSWER -Regular loan -Home purchase loan Automobile taxable benefit equation (ch.3) - CORRECT ANSWER Standby charge + operating cost benefit - employee reimbursement Automobile availability equation (ch.3) - CORRECT ANSWER # of calendar days available to employee --------------------------------------------- 30 Standby charge for company owned (ch.3) - CORRECT ANSWER 2% X (cost of car + taxes) X availability Reduced standby charge for company owned (ch.3) - CORRECT ANSWER -IF more than 50% is business related -IF personal use doesn't exceed 20,004 km/year Personal km -------------- = Qi 1667 X availability Qi X [2% X (cost of car + Taxes) X availability] Operating cost benefit equation for company owned and leased (ch.3) - CORRECT ANSWER .25 X personal km driven Optional operating cost benefit equation for company owned and leased (ch.3) - CORRECT ANSWER -IF notified to use this -IF more than 50% is business -IF standby charge is included in employee's income Standby charge X 50% Standby charge equation for company leased (ch.3) - CORRECT ANSWER 2/3 X (monthly cost of car + taxes) X availabillty Reduced standby charge for company leased (ch.3) - CORRECT ANSWER -IF more than 50% is business related -IF personal use doesn't exceed 20,004 km/year Personal km -------------- = Qi 1667 X availability Qi X [2/3 X (cost of car + Taxes) X availability] Personal cost equation (ch.3) - CORRECT ANSWER Personal km -------------- X (operating cost + Total km applicable tax) Retroactive adjustment (ch.4) - CORRECT ANSWER A non-regular payment that is required when the increase in wages is processed after the increase has been awarded -Use retroactive tax method Retroactive increase (ch.4) - CORRECT ANSWER A non-regular payment that is required when an increase in wages is awarded and the effective date is backdated -Use retroactive tax method Retroactive payment (ch.4) - CORRECT ANSWER A non-regular payment that is required when an employee whose employment was terminated, is later reinstated, with back pay, as a result of a court decision or union intervention -Use regular payroll deduction method Bonus or incentive pay (ch.4) - CORRECT ANSWER A non-regular payment made to an employee, over and above regular wages Bonus pay can be for all of the following reasons (ch.4) - CORRECT ANSWER -Work related -Tied to production or work performance -Discretionary -Recognition of a job well done -Meeting certain goals or deadlines -Being part of an organization's profit sharing plan -Signing a pre-employment bonus -Retention bonus Vacation pay (ch.4) - CORRECT ANSWER A non-regular payment to an employee who goes on vacation Special situations of vacation payment to the employee when no time has been taken (ch.4) - CORRECT ANSWER -Payout of excess accrued vacation -Payout of accrued vacation on termination of employment -Payout of accrued vacation as a result of an Employment Standards approval