Payroll Fundamentals 1 Midterm Exam
recently Update for 2025; Questions and
Verified Answers Graded A+
Gross earnings equation (ch.2) - CORRECT ANSWER-Earnings + Taxable allowances + Non-taxable
allowances + Cash taxable benefits
Gross pensionable/taxable income equation (ch.2) - CORRECT ANSWER-Earnings + Taxable
allowances + Cash taxable benefit + Non-cash taxable benefit
Gross insurable income equation (ch.2) - CORRECT ANSWER-Earnings + Taxable allowance + Cash
taxable benefit
Taxable renumeration equation (NT/NU) (ch.2) - CORRECT ANSWER-Earnings + Taxable
allowances + Cash taxable benefits + Non-cash taxable benefit
Taxable cash allowances are... (ch.3) - CORRECT ANSWER--Are added to employee's earnings and
are a part of their take home pay
,-INCLUDED in Gross Earnings (GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable
Earnings (GEI)
-SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax
, Taxable expense reimbursements are... (ch.3) - CORRECT ANSWER--INCLUDED in Gross Earnings
(GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable Earnings (GEI)
-SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax
* Taxable benefits are... (ch.3) - CORRECT ANSWER--Determined if taxable to the employee by
the CRA or RQ
-IF employer pays cost of benefit to a third party the value is included in the employee's income as NON-
CASH TAXABLE BENEFIT
-IF the employer reimburses employees for money they paid for the benefit the reimbursement is
included in the employees income as a CASH TAXABLE BENEFIT - Added to employee's earnings and are
a part of their take home pay
Non-cash taxable benefits are.. (ch.3) - CORRECT ANSWER--SUBJECT to all statutory withholdings
except for EI and QPIP
-Is only a value added to to the employee's pay for the purpose of calculating statutory deductions
Define car allowance (ch.3) - CORRECT ANSWER--An amount paid or reimbursed to an employee
who uses their personal automobile for business
-Taxability is based on whether the allowance is considered reasonable or unreasonable by the federal
and Quebec government
Car allowances can be provided as a... (ch.3) - CORRECT ANSWER--Flat amount
-Fixed amount per business km
-Credit card or reimbursement for gas purchases
recently Update for 2025; Questions and
Verified Answers Graded A+
Gross earnings equation (ch.2) - CORRECT ANSWER-Earnings + Taxable allowances + Non-taxable
allowances + Cash taxable benefits
Gross pensionable/taxable income equation (ch.2) - CORRECT ANSWER-Earnings + Taxable
allowances + Cash taxable benefit + Non-cash taxable benefit
Gross insurable income equation (ch.2) - CORRECT ANSWER-Earnings + Taxable allowance + Cash
taxable benefit
Taxable renumeration equation (NT/NU) (ch.2) - CORRECT ANSWER-Earnings + Taxable
allowances + Cash taxable benefits + Non-cash taxable benefit
Taxable cash allowances are... (ch.3) - CORRECT ANSWER--Are added to employee's earnings and
are a part of their take home pay
,-INCLUDED in Gross Earnings (GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable
Earnings (GEI)
-SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax
, Taxable expense reimbursements are... (ch.3) - CORRECT ANSWER--INCLUDED in Gross Earnings
(GE), Gross Pensionable and Taxable Income (GPTI), and Gross Insurable Earnings (GEI)
-SUBJECT to C/QPP, EI, QPIP, Federal and Provincial Tax and NT/NU Tax
* Taxable benefits are... (ch.3) - CORRECT ANSWER--Determined if taxable to the employee by
the CRA or RQ
-IF employer pays cost of benefit to a third party the value is included in the employee's income as NON-
CASH TAXABLE BENEFIT
-IF the employer reimburses employees for money they paid for the benefit the reimbursement is
included in the employees income as a CASH TAXABLE BENEFIT - Added to employee's earnings and are
a part of their take home pay
Non-cash taxable benefits are.. (ch.3) - CORRECT ANSWER--SUBJECT to all statutory withholdings
except for EI and QPIP
-Is only a value added to to the employee's pay for the purpose of calculating statutory deductions
Define car allowance (ch.3) - CORRECT ANSWER--An amount paid or reimbursed to an employee
who uses their personal automobile for business
-Taxability is based on whether the allowance is considered reasonable or unreasonable by the federal
and Quebec government
Car allowances can be provided as a... (ch.3) - CORRECT ANSWER--Flat amount
-Fixed amount per business km
-Credit card or reimbursement for gas purchases
