Certified Payroll Professional (CPP)
Part 1 Exam Actual Questions and
Answers 2026
Payroll Concept Workers Status -
correct answer ✅Form SS8 is the IRS determination of EE or IC
status. Reasonal Basis Test aka Safe Harbor Rules Sec 530-Alls ee to
be treated like a IC for specific reasons such as a court order, IRS
audit results, Attorney or CPA advisement, or long standing industry
standard for that job role. Common Law Test- see chart for example
EE is required to comply with ER instructions about when where
and how to work. IC sets own hours determines own sequence of
work. Form W9 request from ER on IC to supply FEIN or SSN with
Company Name. Backup Withholding- Some IC are required to
withhold 24% of earnings this is reported on Form 945. Statutory
ees- not ees under the common law test but are treated like ees for
tax purposes. Ex. Agent or commission drivers, Full time life
insurance sales people, home workers, and traveling salespersons.
Statutory Non-EEs- Qualify as ees nder common law test, but they
are treated as IC. No taxes w/h from pay. Ex: Real Estate agents,
direct sellers. Income must be directly related to sales, Income
reported on 1099 Box 7 Non-EE comp.
FLSA -
correct answer ✅FLSA - Sets min. wage.requires record keeping,
places restrictions on types of work minors can do. It DOES NOT
govern vacation, sick, jury duty, holiday, lunch breaks. Freq of pay or
restrictions on hours required to work. This area is handled by state
, Certified Payroll Professional (CPP)
Part 1 Exam Actual Questions and
Answers 2026
law. Federal Min Wage = 7.25 hour. OT HOURS-- everything over 40
hours in the work week. Exempt ees must be paid at least $455 a
week salary or fee basis. Primary duties must consist of performing
non manual or office work related to the general business
operations. OR Permiting work that is directly related to academic
instruction. Tips- 2.13/HR hourly rate and tips must meet min wage
requirement in fed/state. Must also receive $30 in tips per month.
TIP CREDIT- 5.12 allowed credit by the employer when tips are at
least 5.12/hr. REG RATE OF PAY- calculation is Reg rate of pay=total
reg pay divided by # of hours worked. Fluctuating Work Week-
Change of schedule based on business need. ok as long as ees are
paid for OT. Fixed wkly salary is high enough that they dont fall
below min wage. Comp Time Private Sector- Allowed as long as the
time off is in the same pay period. 11/2 hours given for ever hour of
OT worked. State and/or Gov workers can have the comp time
rather than OT pay if; the EE agreees to it, ees are given reasonable
time to use it, Can accumulate 240 hours of comp time OR 160
hours of OT. Above must be paid. As for public safety ees, they can
have a max comp time of 480 and 320 OT hrs comp. CHANGING
WORK WEEK- Is whn the workweek changes from M-SUN to SUN-
SAT. OT is paid on the greater of the 2. WHITE COLLAR are:
administrative, executives, professionals, learned professionals,
creative professionals, computer professionals, outside sales.
WORK WEEK- determines the 7 consecutive 24 hour period and
when OT is calculated. COMPENSABLE TIME- Non Ex. ees must be
Part 1 Exam Actual Questions and
Answers 2026
Payroll Concept Workers Status -
correct answer ✅Form SS8 is the IRS determination of EE or IC
status. Reasonal Basis Test aka Safe Harbor Rules Sec 530-Alls ee to
be treated like a IC for specific reasons such as a court order, IRS
audit results, Attorney or CPA advisement, or long standing industry
standard for that job role. Common Law Test- see chart for example
EE is required to comply with ER instructions about when where
and how to work. IC sets own hours determines own sequence of
work. Form W9 request from ER on IC to supply FEIN or SSN with
Company Name. Backup Withholding- Some IC are required to
withhold 24% of earnings this is reported on Form 945. Statutory
ees- not ees under the common law test but are treated like ees for
tax purposes. Ex. Agent or commission drivers, Full time life
insurance sales people, home workers, and traveling salespersons.
Statutory Non-EEs- Qualify as ees nder common law test, but they
are treated as IC. No taxes w/h from pay. Ex: Real Estate agents,
direct sellers. Income must be directly related to sales, Income
reported on 1099 Box 7 Non-EE comp.
FLSA -
correct answer ✅FLSA - Sets min. wage.requires record keeping,
places restrictions on types of work minors can do. It DOES NOT
govern vacation, sick, jury duty, holiday, lunch breaks. Freq of pay or
restrictions on hours required to work. This area is handled by state
, Certified Payroll Professional (CPP)
Part 1 Exam Actual Questions and
Answers 2026
law. Federal Min Wage = 7.25 hour. OT HOURS-- everything over 40
hours in the work week. Exempt ees must be paid at least $455 a
week salary or fee basis. Primary duties must consist of performing
non manual or office work related to the general business
operations. OR Permiting work that is directly related to academic
instruction. Tips- 2.13/HR hourly rate and tips must meet min wage
requirement in fed/state. Must also receive $30 in tips per month.
TIP CREDIT- 5.12 allowed credit by the employer when tips are at
least 5.12/hr. REG RATE OF PAY- calculation is Reg rate of pay=total
reg pay divided by # of hours worked. Fluctuating Work Week-
Change of schedule based on business need. ok as long as ees are
paid for OT. Fixed wkly salary is high enough that they dont fall
below min wage. Comp Time Private Sector- Allowed as long as the
time off is in the same pay period. 11/2 hours given for ever hour of
OT worked. State and/or Gov workers can have the comp time
rather than OT pay if; the EE agreees to it, ees are given reasonable
time to use it, Can accumulate 240 hours of comp time OR 160
hours of OT. Above must be paid. As for public safety ees, they can
have a max comp time of 480 and 320 OT hrs comp. CHANGING
WORK WEEK- Is whn the workweek changes from M-SUN to SUN-
SAT. OT is paid on the greater of the 2. WHITE COLLAR are:
administrative, executives, professionals, learned professionals,
creative professionals, computer professionals, outside sales.
WORK WEEK- determines the 7 consecutive 24 hour period and
when OT is calculated. COMPENSABLE TIME- Non Ex. ees must be
