Payroll Exam Questions and Answers
100% Pass
What is FICA? - ✔✔-Federal Insurance Contributions Act
-Made up of social security and medicare
-levies taxes on all employees (even self-employed)
2020 Social Security Tax Rate - ✔✔6.2% of the first $137,700 in wages. Both employee
and employer is 6.2%. Not subject to social security taxes if wages exceed this amount.
This amount is DOUBLED for those who are self employed, 12.4%
Medicare tax rate - ✔✔1.45% no cap (no wage limit on this tax)
2.9% for those who are self employeed
The combined rate for the Social Security tax and the Medicare tax to be withheld from
each employee's gross wages up to $137,700 in 2020 is - ✔✔7.65%
The amount of FICA that should be withheld from an employee's salary of $150,000 in
the year 2020 is - ✔✔$10,712.40
Katelyn Whitman, All Rights Reserved © 2025 1
, Social Security tax of $8,537.40 (6.2% X $137,700)
PLUS
Medicare tax of $2,175 (1.45% X $150,000)
The pay earned by hourly-paid employees is usually referred to as - ✔✔wages
The pay earned by managers who are paid semi-monthly is referred to as -
✔✔salary/salaries
Which employee payroll classification will likely require an accrual adjusting entry for
the gross salaries or wages at the end of a calendar month? - ✔✔hourly employees paid
weekly
- because they have their paydays approximately one week after their workweeks and
generally the workweek does not end on the last calendar day of the month.
The federal form on which an employee indicates the number of allowances to be used
by the employer when calculating the federal income tax withholding is the - ✔✔W-4
Form
An example of a court-ordered employee withholding is - ✔✔garnishment or child
support
Katelyn Whitman, All Rights Reserved © 2025 2
100% Pass
What is FICA? - ✔✔-Federal Insurance Contributions Act
-Made up of social security and medicare
-levies taxes on all employees (even self-employed)
2020 Social Security Tax Rate - ✔✔6.2% of the first $137,700 in wages. Both employee
and employer is 6.2%. Not subject to social security taxes if wages exceed this amount.
This amount is DOUBLED for those who are self employed, 12.4%
Medicare tax rate - ✔✔1.45% no cap (no wage limit on this tax)
2.9% for those who are self employeed
The combined rate for the Social Security tax and the Medicare tax to be withheld from
each employee's gross wages up to $137,700 in 2020 is - ✔✔7.65%
The amount of FICA that should be withheld from an employee's salary of $150,000 in
the year 2020 is - ✔✔$10,712.40
Katelyn Whitman, All Rights Reserved © 2025 1
, Social Security tax of $8,537.40 (6.2% X $137,700)
PLUS
Medicare tax of $2,175 (1.45% X $150,000)
The pay earned by hourly-paid employees is usually referred to as - ✔✔wages
The pay earned by managers who are paid semi-monthly is referred to as -
✔✔salary/salaries
Which employee payroll classification will likely require an accrual adjusting entry for
the gross salaries or wages at the end of a calendar month? - ✔✔hourly employees paid
weekly
- because they have their paydays approximately one week after their workweeks and
generally the workweek does not end on the last calendar day of the month.
The federal form on which an employee indicates the number of allowances to be used
by the employer when calculating the federal income tax withholding is the - ✔✔W-4
Form
An example of a court-ordered employee withholding is - ✔✔garnishment or child
support
Katelyn Whitman, All Rights Reserved © 2025 2
