PAYROLL FUNDAMENTALS UPDATED TEST EXAM
MANUAL QUESTIONS AND SOLUTIONS RATED A+
✔✔Garnishment - ✔✔a legal proceeding authorizing an involuntary transfer of an
employee's wages to a creditor or to satisfy a debt
✔✔Net Pay - ✔✔the part of the employee's wages that remains after all deductions are
subtracted
✔✔OFDI - ✔✔Originating Depository Financial Institution
✔✔$7.25 - ✔✔Federal Minimum wage
✔✔$118,500 - ✔✔Social security tax limit on employee's wages
✔✔6.2% - ✔✔2016 Social Security tax rate
✔✔2.35% - ✔✔Medicare for wages over $200K paid by EE only - ER continues to pay
1.45%
✔✔Federal Rounding rule - ✔✔less than $.50 round down; round up for $.50 or more
✔✔Direct Deposit - ✔✔the electronic transfer of an employees net pay to a financial
institution of their choice
✔✔CHROME - ✔✔Child Labor
Hours Worked
Retention
Overtime Pay
Minimum Wage
Exempt from
✔✔OAR - ✔✔ODFI- Original financial institution
ACH-
RDFI- Receiving financial institution
✔✔CLEAR - ✔✔Capital Credit
Liability Credit
Expense Debit
Assets Debit
Revenue Credit
✔✔Interface - ✔✔the point where two distinct data-processing elements meet
, ✔✔Real Time Processing - ✔✔data entered in the system updates records and
immediately returns the results
✔✔Simple Simon Marries Tooth Fairy - ✔✔Saturday, Sunday Monday or Tuesday >
deposit Friday
✔✔Weird Thomas Freezes Worms - ✔✔Wed, Thurs or Fri > deposit Wednesday
✔✔ADA - ✔✔Americans with Disabilities Act
✔✔ADEA - ✔✔Age Discrimination in Employment Act
✔✔After-tax deduction - ✔✔A deduction from an employee's pay that does not reduce
the employee's taxable wages. It is taken out only after all applicable taxes and other
deductions have been withheld (e.g., union dues, garnishments, charitable
contributions).
✔✔Escheat - ✔✔In the context of payroll, the turning over of unclaimed wages to the
state after a period of time determined by state law.
✔✔Fluctuating workweek - ✔✔An arrangement between an employer and a nonexempt
employee to pay the employee a fixed weekly salary even though the employee's hours
may vary from week to week.
✔✔FPC - ✔✔Fundamentals of Payroll Certification
✔✔Validity Checks - ✔✔Shows whether or not data entered meets the requirements set
forth by a company
✔✔White Collar Employees - ✔✔In the context of the Federal Wage-Hour Law,
executive, administrative, professional (including computer-related professionals), or
outside sales employees who are exempt from the law's minimum wage, overtime pay,
and certain record-keeping requirements.
✔✔Worker Classification - ✔✔The process of determining whether an individual
performing services for a business is either an employee or an independent contractor
✔✔Working Condition Fringe - ✔✔Benefits provided to an employee that are required
for the employee's job. These benefits are not taxable.
✔✔De minimis fringe benefit - ✔✔An item provided infrequently by an employer to an
employee that is of small value. De minimis fringe benefits are never cash or cash
equivalents.
MANUAL QUESTIONS AND SOLUTIONS RATED A+
✔✔Garnishment - ✔✔a legal proceeding authorizing an involuntary transfer of an
employee's wages to a creditor or to satisfy a debt
✔✔Net Pay - ✔✔the part of the employee's wages that remains after all deductions are
subtracted
✔✔OFDI - ✔✔Originating Depository Financial Institution
✔✔$7.25 - ✔✔Federal Minimum wage
✔✔$118,500 - ✔✔Social security tax limit on employee's wages
✔✔6.2% - ✔✔2016 Social Security tax rate
✔✔2.35% - ✔✔Medicare for wages over $200K paid by EE only - ER continues to pay
1.45%
✔✔Federal Rounding rule - ✔✔less than $.50 round down; round up for $.50 or more
✔✔Direct Deposit - ✔✔the electronic transfer of an employees net pay to a financial
institution of their choice
✔✔CHROME - ✔✔Child Labor
Hours Worked
Retention
Overtime Pay
Minimum Wage
Exempt from
✔✔OAR - ✔✔ODFI- Original financial institution
ACH-
RDFI- Receiving financial institution
✔✔CLEAR - ✔✔Capital Credit
Liability Credit
Expense Debit
Assets Debit
Revenue Credit
✔✔Interface - ✔✔the point where two distinct data-processing elements meet
, ✔✔Real Time Processing - ✔✔data entered in the system updates records and
immediately returns the results
✔✔Simple Simon Marries Tooth Fairy - ✔✔Saturday, Sunday Monday or Tuesday >
deposit Friday
✔✔Weird Thomas Freezes Worms - ✔✔Wed, Thurs or Fri > deposit Wednesday
✔✔ADA - ✔✔Americans with Disabilities Act
✔✔ADEA - ✔✔Age Discrimination in Employment Act
✔✔After-tax deduction - ✔✔A deduction from an employee's pay that does not reduce
the employee's taxable wages. It is taken out only after all applicable taxes and other
deductions have been withheld (e.g., union dues, garnishments, charitable
contributions).
✔✔Escheat - ✔✔In the context of payroll, the turning over of unclaimed wages to the
state after a period of time determined by state law.
✔✔Fluctuating workweek - ✔✔An arrangement between an employer and a nonexempt
employee to pay the employee a fixed weekly salary even though the employee's hours
may vary from week to week.
✔✔FPC - ✔✔Fundamentals of Payroll Certification
✔✔Validity Checks - ✔✔Shows whether or not data entered meets the requirements set
forth by a company
✔✔White Collar Employees - ✔✔In the context of the Federal Wage-Hour Law,
executive, administrative, professional (including computer-related professionals), or
outside sales employees who are exempt from the law's minimum wage, overtime pay,
and certain record-keeping requirements.
✔✔Worker Classification - ✔✔The process of determining whether an individual
performing services for a business is either an employee or an independent contractor
✔✔Working Condition Fringe - ✔✔Benefits provided to an employee that are required
for the employee's job. These benefits are not taxable.
✔✔De minimis fringe benefit - ✔✔An item provided infrequently by an employer to an
employee that is of small value. De minimis fringe benefits are never cash or cash
equivalents.
