Payroll Fundamentals 1 Exam
Questions and Answers 100% Pass
RQ and CRA define a car allowance as reasonable if: - ✔✔- The allowance is based
solely on business kilometres driven in a calendar year
- the amount provided is based on the following government-prescribed reasonable
guidelines
- $0.58 per km for the first 5,000 business km's in the year ($0,62 in the Yukon, NWT &
Nunavut)
- $0.51 thereafter ($0.56 for YK, NWT, NT)
- the employer does not reimburse the employee for expenses related to the same use of
the vehicle
Personal Driving includes: - ✔✔- vacation travel
- driving to conduct personal business
- travel between home and work, even if the employer insists the employee drive the
vehicle home
Katelyn Whitman, All Rights Reserved © 2025 1
,Business driving includes: - ✔✔- driving to existing and prospective clients, points of
call, and other office locations of the employer
- when an employee travels directly from home to a point of call, which is not the
employer's place of business where the employee regularly reports for work
- when the employees travels home directly from a point of call
Availability (automobiles) - ✔✔The number of thirty-day periods that the automobile is
available to the employee for the current taxation year. The employee has access to or
control over the vehicle.
Automobile - ✔✔A motor vehicle that is designed or adapted to primarily carry
individuals on highways and streets, and has seating capacity of not more than the
driver and eight passengers
If a gift or award is given to an employee in cash - ✔✔The amount is considered
pensionable, insurable and taxable to the employee, subject to all statutory deductions
Overtime meal allowance is considered non-taxable if (RQ): - ✔✔- overtime is done at
the employer's request and is expected to last for at least two consecutive hours
- overtime is done rarely or on an occasional basis
- the meal expenses are reimbursed upon presentation of receipts
- the meal expenses reimbursed or the value of the meal provided is reasonable
Katelyn Whitman, All Rights Reserved © 2025 2
, The four categories of employment income - ✔✔- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings - ✔✔Dollar amounts the employer pays an employee for the work they
perform
Types of earnings - ✔✔- a salary
- a rate for each hour worked
- a rate per piece of goods produced or picked
- a disability payment for time off work due to illness
- a payment for vacation time
- a premium payment for overtime hours worked
- a premium payment for hours worked on shift
Allowances - ✔✔Additional dollar amounts paid to employees for the use, or
anticipated use, of their personal property for business purposes
Benefits - ✔✔Dollar values attributed to something the employer has either provided to
an employee or paid for on an employee's behalf
Katelyn Whitman, All Rights Reserved © 2025 3
Questions and Answers 100% Pass
RQ and CRA define a car allowance as reasonable if: - ✔✔- The allowance is based
solely on business kilometres driven in a calendar year
- the amount provided is based on the following government-prescribed reasonable
guidelines
- $0.58 per km for the first 5,000 business km's in the year ($0,62 in the Yukon, NWT &
Nunavut)
- $0.51 thereafter ($0.56 for YK, NWT, NT)
- the employer does not reimburse the employee for expenses related to the same use of
the vehicle
Personal Driving includes: - ✔✔- vacation travel
- driving to conduct personal business
- travel between home and work, even if the employer insists the employee drive the
vehicle home
Katelyn Whitman, All Rights Reserved © 2025 1
,Business driving includes: - ✔✔- driving to existing and prospective clients, points of
call, and other office locations of the employer
- when an employee travels directly from home to a point of call, which is not the
employer's place of business where the employee regularly reports for work
- when the employees travels home directly from a point of call
Availability (automobiles) - ✔✔The number of thirty-day periods that the automobile is
available to the employee for the current taxation year. The employee has access to or
control over the vehicle.
Automobile - ✔✔A motor vehicle that is designed or adapted to primarily carry
individuals on highways and streets, and has seating capacity of not more than the
driver and eight passengers
If a gift or award is given to an employee in cash - ✔✔The amount is considered
pensionable, insurable and taxable to the employee, subject to all statutory deductions
Overtime meal allowance is considered non-taxable if (RQ): - ✔✔- overtime is done at
the employer's request and is expected to last for at least two consecutive hours
- overtime is done rarely or on an occasional basis
- the meal expenses are reimbursed upon presentation of receipts
- the meal expenses reimbursed or the value of the meal provided is reasonable
Katelyn Whitman, All Rights Reserved © 2025 2
, The four categories of employment income - ✔✔- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings - ✔✔Dollar amounts the employer pays an employee for the work they
perform
Types of earnings - ✔✔- a salary
- a rate for each hour worked
- a rate per piece of goods produced or picked
- a disability payment for time off work due to illness
- a payment for vacation time
- a premium payment for overtime hours worked
- a premium payment for hours worked on shift
Allowances - ✔✔Additional dollar amounts paid to employees for the use, or
anticipated use, of their personal property for business purposes
Benefits - ✔✔Dollar values attributed to something the employer has either provided to
an employee or paid for on an employee's behalf
Katelyn Whitman, All Rights Reserved © 2025 3
