PAYROLL FUNDAMENTALS 1 COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
RQ and CRA define a car allowance as reasonable if: - CORRECT ANSWER✅✅✅- 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: - CORRECT ANSWER✅✅✅- vacation travel
- driving to conduct personal business
- travel between home and work, even if the employer insists the employee drive the vehicle
home
Business driving includes: - CORRECT ANSWER✅✅✅- 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) - CORRECT ANSWER✅✅✅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 - CORRECT ANSWER✅✅✅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 - CORRECT ANSWER✅✅✅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): - CORRECT ANSWER✅✅✅-
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
The four categories of employment income - CORRECT ANSWER✅✅✅- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings - CORRECT ANSWER✅✅✅Dollar amounts the employer pays an employee for
the work they perform
Types of earnings - CORRECT ANSWER✅✅✅- 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 - CORRECT ANSWER✅✅✅Additional dollar amounts paid to employees for
the use, or anticipated use, of their personal property for business purposes
, Benefits - CORRECT ANSWER✅✅✅Dollar values attributed to something the employer
has either provided to an employee or paid for on an employee's behalf
Expense Reimbursements - CORRECT ANSWER✅✅✅Dollar amounts paid to employees
to cover expenses that they incur while performing their job.
Regular payments - CORRECT ANSWER✅✅✅Have an established frequency, such as
weekly-paid salary or wages
Non-regular payments - CORRECT ANSWER✅✅✅payments that do not occur each pay
period, for example, a bonus or a retroactive adjustment
Salary - CORRECT ANSWER✅✅✅A fixed amount of money paid to an employee for each
pay period.
Salary per pay period - CORRECT ANSWER✅✅✅Annual salary / number of pay periods
per year
Wages - CORRECT ANSWER✅✅✅Earnings which are based on the amount of time
worked, usually at a rate per hour or per day
Regular earnings - CORRECT ANSWER✅✅✅Hourly rate x pay period regular hours
worked
Piecework - CORRECT ANSWER✅✅✅A rate of pay earned per unit of production,
regardless of the length of time taken
Self-Insured Disability - CORRECT ANSWER✅✅✅Employers often offer disability
coverage that provides their employees with income in the event of absence due to illness or
injury
QUESTIONS AND VERIFIED ANSWERS
RQ and CRA define a car allowance as reasonable if: - CORRECT ANSWER✅✅✅- 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: - CORRECT ANSWER✅✅✅- vacation travel
- driving to conduct personal business
- travel between home and work, even if the employer insists the employee drive the vehicle
home
Business driving includes: - CORRECT ANSWER✅✅✅- 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) - CORRECT ANSWER✅✅✅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 - CORRECT ANSWER✅✅✅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 - CORRECT ANSWER✅✅✅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): - CORRECT ANSWER✅✅✅-
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
The four categories of employment income - CORRECT ANSWER✅✅✅- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings - CORRECT ANSWER✅✅✅Dollar amounts the employer pays an employee for
the work they perform
Types of earnings - CORRECT ANSWER✅✅✅- 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 - CORRECT ANSWER✅✅✅Additional dollar amounts paid to employees for
the use, or anticipated use, of their personal property for business purposes
, Benefits - CORRECT ANSWER✅✅✅Dollar values attributed to something the employer
has either provided to an employee or paid for on an employee's behalf
Expense Reimbursements - CORRECT ANSWER✅✅✅Dollar amounts paid to employees
to cover expenses that they incur while performing their job.
Regular payments - CORRECT ANSWER✅✅✅Have an established frequency, such as
weekly-paid salary or wages
Non-regular payments - CORRECT ANSWER✅✅✅payments that do not occur each pay
period, for example, a bonus or a retroactive adjustment
Salary - CORRECT ANSWER✅✅✅A fixed amount of money paid to an employee for each
pay period.
Salary per pay period - CORRECT ANSWER✅✅✅Annual salary / number of pay periods
per year
Wages - CORRECT ANSWER✅✅✅Earnings which are based on the amount of time
worked, usually at a rate per hour or per day
Regular earnings - CORRECT ANSWER✅✅✅Hourly rate x pay period regular hours
worked
Piecework - CORRECT ANSWER✅✅✅A rate of pay earned per unit of production,
regardless of the length of time taken
Self-Insured Disability - CORRECT ANSWER✅✅✅Employers often offer disability
coverage that provides their employees with income in the event of absence due to illness or
injury
