1. Which of the following is the main purpose of a payroll
register?
A. To calculate net pay
B. To track employees' work hours
C. To document total wages, deductions, and net pay for each
payroll period
D. To record employee tax information
Answer: C) To document total wages, deductions, and net pay for
each payroll period
Rationale: A payroll register is a detailed record of all employee
earnings and deductions for a specific pay period.
2. Which of the following is NOT considered taxable income for
employees?
A. Salary
B. Bonuses
C. Employee discounts on merchandise
D. Overtime pay
Answer: C) Employee discounts on merchandise
Rationale: Employee discounts on merchandise are generally not
considered taxable income unless they exceed a certain threshold.
,3. What does the term "FICA" stand for?
A. Federal Income Contribution Act
B. Federal Insurance Contributions Act
C. Fair Income Contribution Act
D. Federal International Compensation Act
Answer: B) Federal Insurance Contributions Act
Rationale: FICA refers to the Federal Insurance Contributions
Act, which mandates payroll taxes for Social Security and
Medicare.
4. Which of the following is an example of a pre-tax payroll
deduction?
A. Child support payments
B. Health insurance premiums
C. Roth IRA contributions
D. Federal tax withholding
Answer: B) Health insurance premiums
Rationale: Pre-tax deductions, like health insurance premiums,
reduce an employee's taxable income before calculating federal
income tax, Social Security, and Medicare taxes.
, 5. Which of the following would an employer need to file
quarterly?
A. Employee W-4 form
B. 1099-MISC forms
C. IRS Form 941
D. W-2 forms
Answer: C) IRS Form 941
Rationale: IRS Form 941 is used to report payroll taxes withheld
and is filed quarterly by employers.
6. What is the tax rate for Social Security in 2025 for employees?
A. 6.2%
B. 12.4%
C. 4.5%
D. 10%
Answer: A) 6.2%
Rationale: The Social Security tax rate is 6.2% for employees in
2025, with an equal amount matched by the employer.
7. Which of the following is considered gross income?
A. Net pay
B. Federal tax withheld
register?
A. To calculate net pay
B. To track employees' work hours
C. To document total wages, deductions, and net pay for each
payroll period
D. To record employee tax information
Answer: C) To document total wages, deductions, and net pay for
each payroll period
Rationale: A payroll register is a detailed record of all employee
earnings and deductions for a specific pay period.
2. Which of the following is NOT considered taxable income for
employees?
A. Salary
B. Bonuses
C. Employee discounts on merchandise
D. Overtime pay
Answer: C) Employee discounts on merchandise
Rationale: Employee discounts on merchandise are generally not
considered taxable income unless they exceed a certain threshold.
,3. What does the term "FICA" stand for?
A. Federal Income Contribution Act
B. Federal Insurance Contributions Act
C. Fair Income Contribution Act
D. Federal International Compensation Act
Answer: B) Federal Insurance Contributions Act
Rationale: FICA refers to the Federal Insurance Contributions
Act, which mandates payroll taxes for Social Security and
Medicare.
4. Which of the following is an example of a pre-tax payroll
deduction?
A. Child support payments
B. Health insurance premiums
C. Roth IRA contributions
D. Federal tax withholding
Answer: B) Health insurance premiums
Rationale: Pre-tax deductions, like health insurance premiums,
reduce an employee's taxable income before calculating federal
income tax, Social Security, and Medicare taxes.
, 5. Which of the following would an employer need to file
quarterly?
A. Employee W-4 form
B. 1099-MISC forms
C. IRS Form 941
D. W-2 forms
Answer: C) IRS Form 941
Rationale: IRS Form 941 is used to report payroll taxes withheld
and is filed quarterly by employers.
6. What is the tax rate for Social Security in 2025 for employees?
A. 6.2%
B. 12.4%
C. 4.5%
D. 10%
Answer: A) 6.2%
Rationale: The Social Security tax rate is 6.2% for employees in
2025, with an equal amount matched by the employer.
7. Which of the following is considered gross income?
A. Net pay
B. Federal tax withheld
