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