FPC Exam Fundamental
Payroll Comprehensive
Questions (Frequently Most
Tested) with Verified Answers
668-W - Answer: Notice of Levy on Wages, Salary, and Other Income
1096 - Answer: Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed? - Answer: 14
What is the FUTA tax rate? - Answer: 6.0%
On form 941, the employer reports - Answer: Social Security Wages
What is the formula for calculating an employees net pay? - Answer: Gross pay-deductions for taxes-
other deductions
Which plan discriminates in favor of highly compensated employees? - Answer: Nonqualified deferred
compensation plans
What is the federal minimum wage per hour on January 1, 2018? - Answer: $7.25
What law determines time limits with which employees must be paid after wages are earned? - Answer:
State Laws
Cafeteria plans are authorized by what internal revenue code section? - Answer: 125
The direct deposit data sent to the bank after payroll processing is an example of - Answer: Interface
, What taxes, if any, must be withheld from payments to an independent contractor who provided a tin? -
Answer: No taxes are withheld
An external audit: - Answer: Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except: - Answer: Local Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be paid
overtime? - Answer: Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - Answer: They are included in all
tax calculations
What is the 2018 wage base for social security tax? - Answer: $128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do? - Answer: Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks except: -
Answer: Recognize changes in laws and regulations
An employee's profit sharing bonus is payable in the year following his death. How should the bonus be
taxed and reported? - Answer: Withhold no taxes and report the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees paychecks? - Answer: By
reducing human error
What federal taxes must an employer withhold from an employees reported tips? - Answer: Federal
income, social security and medicare tax
The main purpose of batch controls is to - Answer: Validate data entry accuracy
Payroll Comprehensive
Questions (Frequently Most
Tested) with Verified Answers
668-W - Answer: Notice of Levy on Wages, Salary, and Other Income
1096 - Answer: Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed? - Answer: 14
What is the FUTA tax rate? - Answer: 6.0%
On form 941, the employer reports - Answer: Social Security Wages
What is the formula for calculating an employees net pay? - Answer: Gross pay-deductions for taxes-
other deductions
Which plan discriminates in favor of highly compensated employees? - Answer: Nonqualified deferred
compensation plans
What is the federal minimum wage per hour on January 1, 2018? - Answer: $7.25
What law determines time limits with which employees must be paid after wages are earned? - Answer:
State Laws
Cafeteria plans are authorized by what internal revenue code section? - Answer: 125
The direct deposit data sent to the bank after payroll processing is an example of - Answer: Interface
, What taxes, if any, must be withheld from payments to an independent contractor who provided a tin? -
Answer: No taxes are withheld
An external audit: - Answer: Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except: - Answer: Local Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be paid
overtime? - Answer: Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - Answer: They are included in all
tax calculations
What is the 2018 wage base for social security tax? - Answer: $128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do? - Answer: Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks except: -
Answer: Recognize changes in laws and regulations
An employee's profit sharing bonus is payable in the year following his death. How should the bonus be
taxed and reported? - Answer: Withhold no taxes and report the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees paychecks? - Answer: By
reducing human error
What federal taxes must an employer withhold from an employees reported tips? - Answer: Federal
income, social security and medicare tax
The main purpose of batch controls is to - Answer: Validate data entry accuracy
