PAYROLL FUNDAMENTALS 1 ACTUAL EXAM
PAPER 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Personal Driving includes: 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: 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). 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. 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. 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):. 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. Answer: - Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
◉ Earnings. Answer: Dollar amounts the employer pays an employee for
the work they perform
, ◉ Types of earnings. 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. Answer: Additional dollar amounts paid to employees for
the use, or anticipated use, of their personal property for business
purposes
◉ Benefits. Answer: Dollar values attributed to something the employer
has either provided to an employee or paid for on an employee's behalf
◉ Expense Reimbursements. Answer: Dollar amounts paid to employees
to cover expenses that they incur while performing their job.
◉ Regular payments. Answer: Have an established frequency, such as
weekly-paid salary or wages
◉ Non-regular payments. Answer: payments that do not occur each pay
period, for example, a bonus or a retroactive adjustment
PAPER 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Personal Driving includes: 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: 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). 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. 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. 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):. 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. Answer: - Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
◉ Earnings. Answer: Dollar amounts the employer pays an employee for
the work they perform
, ◉ Types of earnings. 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. Answer: Additional dollar amounts paid to employees for
the use, or anticipated use, of their personal property for business
purposes
◉ Benefits. Answer: Dollar values attributed to something the employer
has either provided to an employee or paid for on an employee's behalf
◉ Expense Reimbursements. Answer: Dollar amounts paid to employees
to cover expenses that they incur while performing their job.
◉ Regular payments. Answer: Have an established frequency, such as
weekly-paid salary or wages
◉ Non-regular payments. Answer: payments that do not occur each pay
period, for example, a bonus or a retroactive adjustment
