FPC Exam Fundamental Payroll
Questions and Answers 100% Pass
668-W - ✔✔Notice of Levy on Wages, Salary, and Other Income
1096 - ✔✔Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed? - ✔✔14
What is the FUTA tax rate? - ✔✔6.0%
On form 941, the employer reports - ✔✔Social Security Wages
What is the formula for calculating an employees net pay? - ✔✔Gross pay-deductions
for taxes- other deductions
Which plan discriminates in favor of highly compensated employees? -
✔✔Nonqualified deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018? - ✔✔$7.25
What law determines time limits with which employees must be paid after wages are
earned? - ✔✔State Laws
Cafeteria plans are authorized by what internal revenue code section? - ✔✔125
Katelyn Whitman, All Rights Reserved © 2025 1
,The direct deposit data sent to the bank after payroll processing is an example of -
✔✔Interface
What taxes, if any, must be withheld from payments to an independent contractor who
provided a tin? - ✔✔No taxes are withheld
An external audit: - ✔✔Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except: - ✔✔Local
Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to
be paid overtime? - ✔✔Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - ✔✔They are
included in all tax calculations
What is the 2018 wage base for social security tax? - ✔✔$128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what
must the employer do? - ✔✔Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following
tasks except: - ✔✔Recognize changes in laws and regulations
Katelyn Whitman, All Rights Reserved © 2025 2
, An employee's profit sharing bonus is payable in the year following his death. How
should the bonus be taxed and reported? - ✔✔Withhold no taxes and report the bonus
on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees
paychecks? - ✔✔By reducing human error
What federal taxes must an employer withhold from an employees reported tips? -
✔✔Federal income, social security and medicare tax
The main purpose of batch controls is to - ✔✔Validate data entry accuracy
Which of the following types of compensation is taxable? - ✔✔Backpay awards
What is used when calculating an employee's gross up? - ✔✔Net set
Employees can provide their employer with their marital status and allowances for
income tax withholding purposes by: - ✔✔Completing form W-4
Generally, what is the largest expense for most companies? - ✔✔Salaries and benefits
What authority controls the frequency with which employees must be paid? - ✔✔State
Laws
What is the general ledger? - ✔✔A record of transactions by account
What, if any, is the 2018 wage base for Medicare tax? - ✔✔There is no limit
Katelyn Whitman, All Rights Reserved © 2025 3
Questions and Answers 100% Pass
668-W - ✔✔Notice of Levy on Wages, Salary, and Other Income
1096 - ✔✔Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed? - ✔✔14
What is the FUTA tax rate? - ✔✔6.0%
On form 941, the employer reports - ✔✔Social Security Wages
What is the formula for calculating an employees net pay? - ✔✔Gross pay-deductions
for taxes- other deductions
Which plan discriminates in favor of highly compensated employees? -
✔✔Nonqualified deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018? - ✔✔$7.25
What law determines time limits with which employees must be paid after wages are
earned? - ✔✔State Laws
Cafeteria plans are authorized by what internal revenue code section? - ✔✔125
Katelyn Whitman, All Rights Reserved © 2025 1
,The direct deposit data sent to the bank after payroll processing is an example of -
✔✔Interface
What taxes, if any, must be withheld from payments to an independent contractor who
provided a tin? - ✔✔No taxes are withheld
An external audit: - ✔✔Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except: - ✔✔Local
Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to
be paid overtime? - ✔✔Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - ✔✔They are
included in all tax calculations
What is the 2018 wage base for social security tax? - ✔✔$128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what
must the employer do? - ✔✔Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following
tasks except: - ✔✔Recognize changes in laws and regulations
Katelyn Whitman, All Rights Reserved © 2025 2
, An employee's profit sharing bonus is payable in the year following his death. How
should the bonus be taxed and reported? - ✔✔Withhold no taxes and report the bonus
on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees
paychecks? - ✔✔By reducing human error
What federal taxes must an employer withhold from an employees reported tips? -
✔✔Federal income, social security and medicare tax
The main purpose of batch controls is to - ✔✔Validate data entry accuracy
Which of the following types of compensation is taxable? - ✔✔Backpay awards
What is used when calculating an employee's gross up? - ✔✔Net set
Employees can provide their employer with their marital status and allowances for
income tax withholding purposes by: - ✔✔Completing form W-4
Generally, what is the largest expense for most companies? - ✔✔Salaries and benefits
What authority controls the frequency with which employees must be paid? - ✔✔State
Laws
What is the general ledger? - ✔✔A record of transactions by account
What, if any, is the 2018 wage base for Medicare tax? - ✔✔There is no limit
Katelyn Whitman, All Rights Reserved © 2025 3
