Certified Payroll Professional Exam (CPP) Part 1 2023/2024

Certified Payroll Professional Exam (CPP) Part 1 2023/2024 Payroll Concept Workers Status - 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 - ANSWER-FLSA - Sets min. res 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 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 paid for all time worked. Meal periods= non paid, rest periods-paid On call Time- all on call hours must be paid unless they just need to be in the area. Sleep time must supply place and 8 hour window and get paid for it. Waiting time- engaged to be waiting is paid. Waiting to be engaged is not paid. ROUNDING HOURS- ee time can be rounded to the nearest 10th or quarter of an hour. 8/80 RULE- healthcare rule for working 14 day periods. OT for anything over 8 hour day OR over 80hrs in the 14 day cycle. Highest pay wins. EFFECT OF TIP PAY ON CREDIT- See chart