Managing a payroll program from inception to payday is a complex process affected by many

variables.

Now that you have explored some of these factors, which do you find most
intriguing/interesting? Which do you want to learn more about? Is there something we didn't
address that you think could be important?

Write 1-2 paragraphs describing your interest in/forming questions about one or more payroll
factors.

Keeping up with changing tax rules and regulations is one of the most exciting aspects of payroll
management. Tax and employment law changes need payroll experts to be current and adaptable,
making the job dynamic. I'm interested in how companies effortlessly integrate regulatory
changes into payroll systems to balance accuracy and efficiency. Payroll administration can be
improved by understanding compliance update automation and tax deduction management
strategies and technology.

I also want to learn how advanced payroll systems use data analytics to make decisions and spot
trends. Can predictive analytics forecast payroll costs and optimize budgeting? Do new tools
handle payroll disparities or multi-state tax regulations better? Explore these questions to find
ways to streamline payroll and improve efficiency.

1.
Question 1
How could a flawed payroll program affect the company/organization it serves? (Select all that
apply.)
A flawed payroll program may lead to tax inaccuracies
A flawed payroll program may lead to legal issues, fines, and penalties due to noncompliance
A flawed payroll program may lead to employee dissatisfaction and mistrust
A flawed payroll program may result in payroll errors and delays
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2.
Question 2
Which of the following factors should be considered when choosing a payroll plan? (Select all that
apply.)
Average employee tenure
Cash flow
Payroll policies
Continual improvement plans
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3.
Question 3
Jill's Jewelers pays their employees on a biweekly pay frequency. Employees who are paid biweekly
should expect how many paychecks per year?
26 paychecks (or 27 in certain years)
52 paychecks (or 53 in certain years)
24 paychecks
12 paychecks

In your own words, how do payroll specialists interact with and impact employees at an
organization?
Employee satisfaction and confidence are greatly affected by payroll specialists' prompt and
accurate salary payments, payroll-related questions, and tax and labour compliance.

During onboarding, the payroll department requests specific paperwork from employees. The
payroll department often educates employees on payroll policies and benefits enrollment. Most
notably, the payroll department is responsible for completing payroll every payroll cycle and
paying employees appropriately.

What are some of the typical duties a payroll specialist may be responsible for? (Select all
that apply.)
 Calculating bonuses and allowances
 Scheduling bank payments and/or distributing paychecks
 Helping ensure wage and tax withholding selections comply with federal, state,
and local requirements

Which payroll role is responsible for designing, testing, and improving payroll software?
 Payroll software product specialist
 Payroll specialist
 Payroll manager

Explain, in your own words, some of the payroll challenges small businesses may face.

Payroll problems for small businesses include complying with complex requirements,
managing limited resources for proper processing, and scaling operations as their staff
grows.

Answers may include:

 Small businesses have limited resources.

 Small businesses might manually run their own payroll, which can expose the business to
manual payroll errors.

 Payroll specialists who work at a small business may have responsibilities outside of the
scope of a traditional payroll specialist, which can be overwhelming.
  Small businesses must do their due diligence and work to stay informed on changing
federal, state, and local requirements relating to payroll. This can be difficult to keep up
with.

 Small businesses may manage their own data, which could pose security risks.

According to the video, what are some ways payroll specialists can help their organizations
overcome or prevent/reduce payroll challenges? (Select all that apply.)

 Having good industry-specific knowledge

One way organizations can help overcome or help prevent payroll challenges is to have
good industry-specific knowledge.

 Practicing adaptable strategies

One way organizations can help overcome or help prevent payroll challenges is to
practice adaptable strategies.

 Staying up to date with evolving labor requirements

One way organizations can help overcome or help prevent payroll challenges is to stay
up to date with evolving labor requirements.

1.
Question 1
Which industry faces the payroll challenge of regularly dealing with back pay and unpaid overtime
due to the nature of 24/7 operations, complex scheduling, and the necessity for extended work
hours?

 Restaurants & Hospitality Services

 Non-profit religious organizations
 Retailers
 Healthcare
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2.
Question 2
True or False? Large businesses are more likely to work with 3rd party payroll service providers than
small businesses.
 True
 False
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3.
Question 3
What are some payroll challenges large businesses may face? (Select all that apply.)
 Increased scrutiny
 Increased regulatory landscape
 Fewer employees dedicated to payroll
 Limited access to payroll tools

What are some of the skills a payroll specialist should possess? (Select all that apply.)
 Strong mathematical abilities
Correct! A payroll specialist should possess strong mathematical abilities.
 Good workload management

Correct! A payroll specialist should demonstrate good workload management.

 A preference for working alone
 Limited attention to detail

In your own words, why do payroll specialists need to show empathy and be solution-oriented?

Payroll specialists need to be empathetic in order to understand and sensitively handle

employees' concerns. Being solution-oriented ensures quick, effective resolutions, which builds
trust and keeps payroll accurate.

Demonstrating empathy can be a great way for payroll specialists to put themselves in an
employee's shoes. This can help the payroll specialist address the issue appropriately and in a
timely manner because they understand the impact of the payroll error. Many employees may
rely on receiving their pay on time, so payroll specialists need to operate with urgency to resolve
payroll issues.

Payroll specialists should also be solution-oriented to quickly resolve the payroll issue and help
ensure the error does not occur again. A solution-oriented mindset can also prevent escalations
from occurring.

Customer service can have a large impact on a payroll department. If a payroll department
lacks knowledge, incorrectly pays employees, or isn't transparent about errors in payroll
reporting, what might happen as a result? (Select all that apply.)
Employees may begin to distrust the payroll department
Correct
Correct! If a payroll department lacks knowledge, incorrectly pays employees, or isn't
transparent about errors in payroll reporting, employees may begin to distrust the payroll
department.
The business may be exposed to penalties
Correct
Correct! If a payroll department lacks knowledge, incorrectly pays employees, or isn't
transparent about errors in payroll reporting, the business could potentially be exposed to
penalties as a result.
The payroll department may be tasked with additional responsibilities
The payroll department may lose credibility amongst employees
Correct
Correct! If a payroll department lacks knowledge, incorrectly pays employees, or isn't
transparent about errors in payroll reporting, the payroll department may lose credibility.

As you reflect on the payroll cycle, in your own words, explain which payroll cycle step is
the most important. Why do you think this?

Most important in the payroll cycle is precise timekeeping and data collecting. This
phase comprises collecting and confirming employee work hours, overtime,
absenteeism, and other pay-related data.
Correct

Answers may include any of the following steps:

1. Collecting employee info

2. Creating a record management system
3. Establishing a payroll cycle
4. Tracking time and attendance
5. Verifying input information
6. Calculating gross pay
7. Calculating taxes, deductions, and take-home pay
8. Reverifying and finalizing the payroll
9. Approving the payroll
10. Paying employees
11. Updating payroll records and submitting tax filings

Which is NOT a challenge that businesses face when it comes to payroll?

 Complex working environments
 Diverse employee backgrounds
 Inaccurate time entry
 Validation inefficiencies
While many employees come from diverse backgrounds, this should not be a challenge
to payroll.

In your own words, articulate the differences between a payroll software and
a payroll service provider.
Payroll software calculates wages, withholds taxes, and reports. Users must enter data
and monitor compliance. However, a payroll service provider handles paychecks, tax
withholdings, and compliance. This service handles payroll taxes and employee
inquiries. Payroll service providers offer full payroll solutions, whereas payroll software
is self-managed.
Payroll Software: A payroll software is a specialized tool designed to automate and
improve payroll tasks. Businesses are responsible for leveraging software to conduct
their own payroll, and they assume the responsibility of their own payroll functions.

 This option is typically less expensive.

 Businesses have to stay up to date on regulatory changes on their own.
Payroll Service Provider: A company that comes in and assists with or assumes
all aspects of payroll on behalf of a business. With a payroll service provider,
businesses can outsource their payroll resources and do not have to assume all payroll
responsibilities on their own.

 This option is typically more expensive.

 A payroll service provider stays up to date on regulatory changes and makes the
appropriate updates on behalf of the business.

1.
Question 1
When considering pay schedule optimization, what are some key factors organizations should
consider when selecting a pay schedule and a pay date? (Select all that apply.)
Federal, local, and state requirements
Methods of payment
Employee classifications
Cash flow
Correct
Correct! Organizations should consider how and when money is coming into and out of the business
when selecting a pay schedule and a pay date. This helps ensure the organization can prepare to
have the correct amount of funds in their account.
You didn't select all the correct answers
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2.
Question 2
Identify the reasons why accurate record management and recordkeeping are crucial to the payroll
process. (Select all that apply.)
Accurate record management and recordkeeping reduce an employer's tax responsibilities.
This should not be selected
Incorrect. Accurate record management and recordkeeping do not reduce an employer's tax
responsibilities. Instead, accurate record management and recordkeeping can help ensure
organizations are making the appropriate tax withholdings.
Accurate record management and recordkeeping help to protect sensitive employee data
Correct
Correct! Maintaining a record management system helps businesses protect sensitive employee
data.
Accurate record management and recordkeeping help businesses stay organized
Accurate record management and recordkeeping aid in complying with federal, state, and
local payroll requirements.
Correct
Correct! Accurate recordkeeping can help ensure organizations are complying with federal, state,
and local payroll requirements.
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3.
Question 3
Which is a key difference between payroll software and payroll service providers?
Payroll service providers handle tax compliance, whereas payroll software doesn't
Payroll software is typically more expensive than payroll service providers
Payroll service providers require more internal resources to manage
Payroll software offers more flexibility and control compared to payroll service providers
Correct
Correct! While payroll software can streamline tax calculations, payroll service providers generally
handle tax filing and compliance on behalf of an organization.

What are a few of the different factors organizations should consider when
selecting their pay schedule (pay period) and pay date? (Select all that apply.)
 Employee time off balances
 Employee classifications
Correct! Employee classifications impact the selection of an organization's pay
schedule (pay period) and pay date.
 Methods of payment
Correct! The methods of payment an organization offers impact the selection of
an organization's pay schedule (pay period) and pay date.
 The average tenure of employees

Which of the following is an example of manual time entry?

 Geofencing
 A kiosk requiring pin entry
 Employee time books
 A smartphone application
 Correct! Employee time books are considered an example of manual time
entry.

In your own words, why do you think it's so important for

organizations to adhere to timekeeping best practices?
Organizations must follow timekeeping best practices to process payroll accurately and comply
with labour rules. Proper timekeeping prevents wage calculation errors, reduces hour disputes,
and assures employees are paid on time. Accurate records help comply with labour laws and
avoid hefty fines. Effective timekeeping provides trustworthy data for scheduling and
performance analysis, supporting fair compensation and operational effectiveness.
Correct
Answers may include:

 Adhering to these best practices ensures staff numbers are appropriate for the amount of
work that needs to be done.
  Following these best practices ensures employees are not fatigued or burnt out.
 Aligning an organization to these best practices can reduce errors that may impact
payroll.
 Adhering to these best practices ensures an organization stays within its budget.
 Following these best practices can help maintain strong employee morale.

This technology company specializes in developing cutting-edge technology solutions

for maritime industries. Monthly cash flow varies based on client contracts, making
some months more lucrative than others. Cash generally flows into the business during
project milestones and product launches but the business maintains a healthy reserve of
cash to cover monthly overhead.

The core of employees are salaried with a focus on research and development but the
company does employ project-based contractors who are paid hourly and may
experience increased workload during project deadlines.

Frequent regulatory updates in the tech industry may impact project timelines and
influence the need for additional contractual work, affecting how often employees
should be paid minimally. The company is based in a state that does not have laws
regarding the minimum frequency of employee pay but does employ contractors from
other jurisdictions.

Because the firm depends on temporary, hourly workers and its income is seasonal, it is very
important that the salary is managed well. Payroll business loans have been used to deal with
cash flow problems during slow months, but they need to be carefully managed to avoid taking
on too much debt. As needed by the places where it does business, the firm should keep paying
its workers at least twice a month. This meets the standards of the law and helps keep workers
happy.

During busy times, make sure that payroll tools can accurately handle a lot of overtime. Keeping
a saving and planning how to pay back loans can help keep cash flow in check during slow
months. It is also important to keep an eye on how government subsidies and rules for
agriculture affect financial security, since these things can change the need for payroll.
Reviewing and making changes to payroll procedures on a regular basis in response to changes
in regulations and changes in revenue will help the firm stay operationally efficient and keep its
financial health.

This is a firm that is dedicated to assisting family/ small-business farmers staff seasonal
labor. Revenue flows seasonally, with peak months during harvest seasons and lower
income during off-peak times. In the past, the firm has employed payroll business loans
to cover payroll during the slowest months.
The company employs a small core of administrative staff and recruiters but the
majority of their labor force come in the form of temporary workers hired on as-needed
basis, usually for an hourly rate with a high amount of overtime being charged.

Agricultural regulations and subsidies might influence the frequency of pay for hourly
workers, as government programs can impact the overall financial stability of the
business. The company currently provides labor to farms only in jurisdictions where
employees are required to be paid at least two times a month.

As the seasons change, the firm needs to make sure that its payroll is handled correctly. To keep
paid workers happy, the firm should pay them twice a month as required. Payroll can be paid
with off-peak payroll business loans, but they need to be carefully handled to keep you out of
debt. Reviewing cash flow and making changes to financial plans based on farm laws and
government incentives will help keep operations stable all year.
This company operates wellness centers across North America which offer holistic
health and mindfulness services. Revenue is steady but tends to peak during wellness
events, workshops, and holiday seasons.

Each center has a core team of salaried employees and also employees freelance
contractors such as massage therapists and acupuncture practitioners.

Health and wellness industry regulations, such as certifications and continuing

education requirements, might impact the frequency of pay, especially for hourly
employees seeking additional training to comply with industry standards. Some centers
are located in some jurisdictions that require employees to be paid at least twice a
month while others are located in jurisdictions that do not have minimum pay frequency
requirements.

Wellness centres have to find a balance between staffing levels, income peaks, and the rules of
their industry. Paying employees once a month fits with regular income and provides stability.
For freelancers and hourly workers, these rules are very important, especially in places where
pay is due every two months. Paying contractors on time can make them happier and help the
business follow certification and training rules. In places where there aren't any pay frequency
laws, the company should try to make regular payments to keep good relationships and keep
operations running smoothly. Companies will run more smoothly if they keep an eye on their
cash flow and change how they get paid when their income changes or when the rules change.

It's apparent that a payroll department plays a large role across an

employee's tenure. In your opinion, in which stage of the employee life cycle is
the payroll department most involved: onboarding, retention, or separation?
Why do you think this? Provide evidence from the video to support your
choice.
When new employees start, I think the payroll department is most active. Setting up
accurate pay, benefits, and tax details for employees is needed at this stage. When you
set up payroll correctly, it will be easy to follow the rules and process payments for all
employees. the video shows how important it is to set up payments correctly the first
time to avoid problems in the future, which supports this.
Correct
Answers may include:

 Onboarding
 Retention
 Separation

Which benefit below is protected under the Family and Medical Leave Act
(FMLA) for eligible employees of covered employers?
 Sabbatical
 Maternity Leave
 Vacation Leave
 Paid Time Off
Correct
Correct! Maternity leave is protected under the FMLA.

In your own words, illustrate the difference between an accrual-based

model and a lump-sum model for time off.
An accrual-based time off strategy lets workers earn leave over time depending on their
hours or tenure. An employee may accrue a set amount of vacation hours every month.
This method matches leave with work hours and fosters proactive leave management.
Instead, a lump-sum model gives workers a set amount of leave at the start of a year.
An employee may receive 20 days of vacation at the start of the year regardless of
hours worked. This concept provides instant leave but is less flexible in managing leave
accrual.
Correct
In an accrual-based model, employees earn a certain number of time off hours based
on the number of hours worked. For example, an employee may earn 4 hours of paid
time off (the accrual rate) every two weeks (the accrual frequency).

In contrast, in a lump-sum model, employees are given a pre-determined number of

paid time off hours at the beginning of each calendar year that they must ration
throughout the year. The paid time off hours are considered to be "frontloaded."

Which of the following is an example of a discretionary bonus?

 Commission
 Department success
 Holiday giving
 Annual, merit-based recognition
 Correct! Holiday giving is considered a discretionary bonus.
What are a few of the common payroll tasks that are often associated with
offboarding employees? (Select all that apply.)
 Advising employees on options for continuing healthcare benefits
Advising employees on options for continuing healthcare benefits is a common
payroll task that is often associated with offboarding.
 Setting expectations regarding an employee's last payment of wages
Setting expectations regarding an employee's last payment of wages is a
common payroll task that is often associated with offboarding.
 Setting up employee deductions and tax withholding selections
 Setting up dependent care benefits

In your own words, why is it important for organizations to adhere to the

proper payroll reporting procedures?
Organisations must follow payroll reporting methods to comply with laws, avoid fines,
and keep correct records. Ensuring timely and accurate salary payments, tax filings,
and benefit contributions builds trust with employees and regulatory authorities,
supporting corporate integrity.

t's important for organizations to follow the proper payroll reporting procedures
because:

 It helps ensure organizations comply with specific tax reporting obligations.

 It helps ensure businesses calculate their tax liabilities and deductions
accurately.
 It establishes transparency.
 It builds trust with stakeholders, the public, and other interested parties.

Which tax form is used to report payment of wages to independent

contractors?
 Form 941
 Form W-2
 Form 943
 Form 1099-NEC
 Correct! This is the form for Nonemployee Compensation.

Which of the following are necessary steps when closing

the payroll cycle for the year? (Select all that apply.)

The necessary steps when closing the payroll cycle for the year include:

 Generating Forms W-2 for employees and Forms 1099-NEC for independent
contractors who exceeded the threshold for the year: These forms are required for
reporting wages and payments to employees and contractors, respectively.
  Verifying the accuracy of all payroll data: Ensuring that all payroll data is accurate
helps to prevent errors in tax reporting and compliance.
 Calculating the final tax deductions for all workers: Accurate calculation of final tax
deductions ensures that employees’ and contractors’ tax liabilities are correctly reported
and settled.

Which of the following might directly affect the final

payroll of the year and the taxes owed? (Select all that
apply.)

The following factors might directly affect the final payroll of the year and the taxes owed:

 Any annual bonuses that are distributed: Bonuses are considered taxable income and
impact the total amount of wages paid and reported, affecting the year-end payroll and
taxes owed.
 All allocated tips to tipped employees: Tips are taxable and must be included in the
final payroll calculations, impacting both the employee’s income and the employer’s tax
obligations.

The timing of an employee’s lunch break and employee training scheduled during the last week
of the year generally do not directly affect the final payroll or taxes owed.

What are some changes government agencies might make

that could impact an organization's taxes (Select all that
apply.)

The changes government agencies might make that could impact an organization's taxes include:

 Updating tax rates: Changes in tax rates can directly affect the amount of taxes an
organization owes.
 Redefining worker classifications: Alterations in how workers are classified (e.g.,
employee vs. independent contractor) can impact payroll taxes, benefits, and tax
reporting requirements.
 Moving tax form submission deadlines: Changes in deadlines can affect when taxes
and related forms need to be filed, impacting compliance and financial planning.
 Updating tax forms: Changes to tax forms can alter reporting requirements and affect
how organizations report income, deductions, and other tax-related information.
In your own words, summarize the differences between a payroll reconciliation and
a payroll audit.
For accurate payroll balances, reconcile pa
yroll every pay month before processing. For extra coverage, organizations can
reconcile quarterly and annually. Most corporations audit annually, but some do them
quarterly before taxes are due or twice a year.
 A payroll reconciliation is one part of a payroll audit. Payroll reconciliations
should occur frequently, as much as every pay period, but can also occur
quarterly and annually. Each reconciliation consists of multiple steps to ensure
that all totals and calculations are correct.
 A payroll audit is broader in scope and does not get as detailed as a payroll
reconciliation does. Think of a payroll audit as a high-level review, whereas a
payroll reconciliation looks more closely at all numbers and data to ensure
accuracy.

1.
Question 1
What is the term for the practice of reviewing a payroll record and
comparing it to an ongoing transaction or balance sheet? Please
answer in all lowercase.
payroll reconciliation
A payroll reconciliation is the practice of reviewing a payroll record and comparing it to an ongoing
transaction or balance sheet.

2.
Question 2
Which of the following payroll processes is more broad in scope and
less centric on smaller calculations and balances? This process also
occurs less frequently.
 A payroll audit
 Correct! A payroll audit is used to review an organization's general payroll practices
and workflows more broadly
 A payroll reconciliation
In your own words, illustrate an example of how organizations can use payroll
data to inform their business decision-making.
Organizations can look at their payroll data to see if there are any patterns in the prices
of labour, like seasonal increases or costs for overtime. For example, looking at payroll
data could show that the organization needs more staff during busy times. This would
help them to change how they hire people and plan their work so that it better fits with
what the business needs.
 Payroll data can help businesses anticipate when employees will be out on leave
so they can forecast scheduling.
 Payroll data can help businesses understand attrition rates so they can project
hiring needs.
 Payroll data can provide visibility into how many employees are working at any
given time so they can anticipate budgeting needs.

1.
Question 1
Which payroll report details the amount of taxes withheld from employee pay and
shows how much an employer has paid in taxes and how much is still owed?
To verify the accuracy of payroll transactions
Payroll history report
Paid time off report
 Payroll tax liability report
The payroll tax liability report details the amount of taxes withheld from employee pay and
shows how much an employer has paid in taxes and how much is still owed?=.
2.
Question 2
An organization identifies many employees are giving their two-week notice and
choosing to part ways. What is the best way the organization can leverage payroll
data to inform their next steps?
 The organization can use payroll data to review money movement and cash flow to
see when and how employees are getting paid.
 The organization can use payroll data to review adherence to compliance
requirements, such as confirming all tax deposits are made correctly and on time.
 The organization can use payroll data to review budget forecasting to see department
spending.
 The organization can use payroll data to review attrition trends and statistics to
see voluntary and involuntary attrition numbers.
Payroll data can provide insights regarding attrition trends and statistics which can help
organizations identify why so many employees are leaving the organization.
3.
Question 3
Imagine you are a first-time car buyer. Before you head to the dealership, you
want to do some research to determine which car is the safest option. You find
numerical data on the crash statistics for different models of vehicles and make a
determination based on your research. What type of data did you identify to help
make your decision?
 Quantitative data
 Qualitative data
  Correct! Because the data was numerical, this is considered quantitative data.

1.
Question 1
Taylor has been hired by ABC Towing to maintain the grounds at their storage yard. Taylor is paid a
set amount regardless of the hours worked, controls when and how the work is done, and offers this
service to other businesses. Based on this scenario, which worker classification is the best option for
Taylor?

Employee
Statutory Employee
Independent Contractor
Statutory Non-employee
Correct
Correct! ABC Towing pays a contracted rate for Taylor to provide a service, and Taylor controls
when and how the work is done. Taylor performs jobs for other businesses and can realize a profit or
loss on the work done for the contracted price.
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2.
Question 2
Pat has been hired as a driver for ABC Towing. The business provides Pat with a truck and the
equipment needed to perform the work. Pat is assigned to work 3:00 pm to midnight Wednesday
through Sunday and is paid an hourly rate. Based on this scenario, which worker classification is the
best option for Pat?

Employee
Statutory Employee
Independent Contractor
Statutory Non-employee
Correct
Correct! ABC Towing has control over how and when the work is done and provides the tools and
equipment needed.
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3.
Question 3
Mohammed has been hired by ABC Towing to manage their storage yard. ABC Towing trained
Mohammed to check in and out towed cars following local law as well as their business procedures.
Mohammed is paid a set amount for each day of work. Based on this scenario, which worker
classification is the best option for Mohammed?

Employee
Statutory Employee
Independent Contractor
Statutory Non-employee
Correct
Correct! ABC Towing has control over how and when the work is done and provides training on how
to perform the job.
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4.
Question 4
Jose works as a tow truck driver using their own truck and tools. Most of Jose's work comes from
ABC Towing. When a towing job is available, ABC Towing notifies Jose and others of the job
available and the contracted rate. Jose has the choice to accept or decline the job. Jose also tows
cars for a local apartment complex and for local mechanics, as needed. Based on this scenario,
which worker classification is the best option for Jose?

Employee
Statutory Employee
Independent Contractor
Statutory Non-employee
Correct
Correct! ABC Towing does not provide the tools and equipment needed to perform the job. They pay
a contracted rate for Jose to provide a service and do not have control over how Jose performs the
work. Jose performs jobs for other businesses and can realize a profit or loss on the work done for
the contracted price.
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5.
Question 5
How might the worker described below be classified?

An individual who works at home on materials or goods that a business supplies and that must be
returned to the business or a person the business names, if the business also furnishes
specifications for the work to be done.

Common-Law Employee
Independent Contractor
Statutory Employee
Statutory Non-Employee
Incorrect
Incorrect. An individual who works at home on materials or goods that a business supplies and that
must be returned to the business or a person the business names, if the business also furnishes
specifications for the work to be done, is best classified as a statutory employee.

The Common Law Test outlines the IRS guidelines for classifying workers. Consider reviewing the
following videos to get a better understanding of worker classifications and their definitions:

 The Common Law Test and the ABC Test

 Exceptions to the Common Law Test
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6.
Question 6
How might the worker described below be classified?

Individuals who are licensed real estate agents performing services related to the sale of real
property.
Common-Law Employee
Independent Contractor
Statutory Employee
Statutory Non-Employee
Correct
Correct! Individuals who are licensed real estate agents performing services related to the sale of
real property are best classified as statutory non-employees.

1.
Question 1
Shipra, who works in the Human Resources (HR) department of Analytics Inc., is putting together
new hire packets. At a minimum, which two forms should Shipra make sure are included in each
packet of new hire forms?

Form W-4 and Form SS-4

Form W-4 and Form I-9

Form SS-4 and Form I-9

Form 941 and Form SS-4

Correct
Correct! Form W-4 and Form I-9 are both completed during the new hire onboarding process.
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2.
Question 2
Blooper's Inc. just hired James Bell. On their first day, James is required to complete a Form I-9 in
order to verify their:

Identity and legal authorization to work in the U.S.

Social Security number and identity.

Social Security number and legal authorization to work in the U.S.

Identity and tax withholding status.

Correct
Correct! Form I-9 allows employers to collect worker information to verify identity and legal
authorization to work in the U.S.
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3.
Question 3
A new employee has completed their I-9 and needs to provide a document to establish their identity.
The employee produces the items listed. Which of these can the employer accept to establish the
employee’s identity?

Social Security Card

Certified Birth Certificate

Driver’s License

U.S. Citizen ID Card

Incorrect
Incorrect. According to the Form I-9 List of Acceptable Documents, a U.S. citizen ID card can be
used to establish a worker's employment eligibility to work in the U.S., not to establish identity.
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4.
Question 4
Ortech Company just hired several new employees and is completing section two of Form I-9. When
examining documentation the employees present, which of the following can be used to verify
employment authorization in the U.S.?

Employee's driver's license.

Employee's Native American tribal document.

Employee's voter registration card.

Employee's Social Security card.

Correct
Correct! According to the Form I-9 List of Acceptable Documents, a Social Security card can be
used to establish employment authorization to work in the U.S.
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5.
Question 5
Jody was just hired by Primo, Inc. Which federal form does Jody need to fill out to ensure the correct
federal income tax is withheld from their paycheck?

Form W-4

Form 941

Form SS-4

Form I-9

Correct
Correct! Form W-4, Employee's Withholding Certificate, is used to ensure the correct federal income
tax is withheld from employee pay.

In your own words, explain why the check date so important for businesses to
keep track of.
The check date dictates when employees and vendors are paid, therefore firms must
watch it. Accurate check dates prevent late payments, sustain cash flow, and promote
financial and tax compliance. They prevent late penalties and vendor disruptions.
The check date determines when tax liabilities are incurred and when taxes are due
(e.g., when they must be deposited). Reporting is also impacted by this date, so it's
imperative that organizations pay employees on time.

Correct! $10.50 x 36 hours = $378

35 hours + 7 hours = 42 total hours

42 total hours – 40 = 2 overtime hours
$12.00 x 0.5 = $6 overtime premium rate
42 hours x $12 = $504 straight time pay
2 overtime hours x $6 = $12 overtime premium pay
$504 + $12 = $516
40 hours + 4 hours = 44 total hours
44 total hours – 40 = overtime hours
40 assembly hours x $13.50 = $540 assembly straight time pay
4 office hours x $10 = $40 office straight time pay
$540 + $40 = $580 total straight time pay
$580 ÷ 44 total hours = $13.18 regular rate of pay
$13.18 x 0.5 = $6.59 overtime premium pay rate
4 overtime hours x $6.59 = $26.36 overtime premium pay
$580 + $26.36 = $606.36

24 hours + 24 hours = 48 total hours

48 total hours – 40 = 8 overtime hours
24 day shift hours x $9 = $216 day shift straight time pay
24 night shift hours x $9.90 = $237.60 night shift straight time pay
$216 + $237.60 = $453.60 total straight time pay
$453.60 ÷ 48 total hours = $9.45 regular rate of pay
$9.45 x 0.5 = $4.73 overtime premium pay rate
8 overtime hours x $4.73 = $37.84 overtime premium pay
$453.60 + $37.84 = $491.44

1.
Question 1
As part of its cafeteria plan offerings, Tires Unlimited allows employees to set aside pretax money to
be used for out-of-pocket medical expenses for the year. If not used timely, the employee stands to
lose the balance of the money put into the account. What is this benefit known as?
Flexible Spending Arrangement
Group Term Life Insurance
Dependent Care Assistance
Medical Insurance
Correct
Correct! Available under a Cafeteria Plan, a Flexible Spending Arrangement (FSA) allows
employees to set aside pretax dollars to use for out-of-pocket medical expenses or dependent care
expenses.
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2.
Question 2
Bulk Foods, Inc. offers its employees an insurance benefit. The first $50,000 of coverage for this
benefit is not taxable. What is this benefit known as?
Flexible Spending Arrangement
Group Term Life Insurance
Dependent Care Assistance
Medical Insurance
Correct
Correct! Group Term Life Insurance is a taxable benefit for coverage provided over $50,000.
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3.
Question 3
For employees that participate in a high deductible medical plan, Chocolatier Supply Co. offers a
savings account for out-of-pocket medical expenses. Any monies remaining in the account each
year are not forfeited. What is this benefit known as?
Flexible Spending Arrangement
Group Term Life Insurance
Health Savings Account
Dependent Care Assistance
Correct
Correct! A Health Savings Account is a savings account employees can use to pay for out-of-pocket
health and medical expenses. If an employer offers this as a benefit, the employer can also
contribute money to an employee's HSA.

1.
Question 1
True or False: The Fair Labor Standards Act (FLSA) requires overtime pay for hours worked in
excess of 40 hours per workweek.
True
False
Correct
Correct! Nonexempt employees must be paid overtime premium pay for time worked over 40 hours
in the workweek.
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2.
Question 2
True or False: The FLSA defines a workweek as midnight on Sunday through 11:59 pm on
Saturday.
True
False
Correct
Correct! A workweek is defined as 7 consecutive, 24-hour periods. Therefore, employers have
flexibility, as long as it is a fixed and regularly recurring period of 168 hours.
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3.
Question 3
True or False: When determining how many hours an employee worked in the workweek, vacation
and sick time taken must be included.
True
False
Correct
Correct! Paid time off is not considered time worked. Therefore, it is not required to be considered
when determining if an employee worked more than 40 hours in the workweek.
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4.
Question 4
True or False: FLSA requires that employees be paid overtime pay for working weekends or
holidays.
True
False
Correct
Correct! FLSA does not require premium pay simply for working holidays or weekends, unless this
time was in excess of 40 hours for the workweek.
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5.
Question 5
True or False: Overtime hours must be paid at a rate of one and one-half times the employee's
regular rate of pay.
True
False
Correct
Correct! In addition to the straight time pay for this time, the employer must pay overtime premium
pay, which is the additional "half" of time-and-a-half.

1.
Question 1
Calvin is a full-time, nonexempt employee who is paid $15 per hour and worked 32 hours last week.
Calculate Calvin's gross pay for the week.
$450.00
$480.00
$525.00
$600.00
Correct
Correct! Incorrect. $15 per hour multiplied by 32 hours gives you the gross pay of $480.00.
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2.
Question 2
Joe, an apprentice carpet installer for Carpet King, is paid $14.50 per hour. Last week, Joe worked
25 hours. Calculate their weekly earnings.
$290.00
$333.50
$362.50
$435.00
Correct
Correct! $14.50 per hour multiplied by 25 hours gives you the weekly earnings of $362.50.
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3.
Question 3
Gene, a nonexempt employee, has received their weekly paycheck from Sonico. During this weekly
period, Gene worked 40 hours and took 4 hours of sick pay. Choose the earnings that Gene will be
paid and will therefore see on their pay statement.
 Regular, Sick, and Overtime
 Regular and Sick
 Regular, Vacation and Overtime
 Regular and Vacation
Correct
Correct! Gene does not exceed 40 hours worked, which means Gene is paid 40 hours of regular pay
and 4 hours of sick pay.
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4.
Question 4
Phil, a nonexempt employee at China Rentals, receives a $50 bonus for every 200 settings of china
delivered. Which of the following earning types should this be reported as?
 Discretionary Bonus
 Nondiscretionary Bonus
 Commission
 Regular Pay
Correct
Correct! A nondiscretionary bonus is a type of additional pay for some type of recognition that is
based on specific performance criteria.
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5.
Question 5
Per FLSA, for the purpose of identifying the number of overtime hours worked, what is the definition
of a workweek?
 Sunday to Saturday
 Monday to Sunday
 Saturday to Friday
 Any 7 consecutive, 24-hour periods
Correct
Correct! Per the FLSA, for the purpose of identifying the number of overtime hours worked, the
definition of a workweek is any 7 consecutive 24-hour periods.
1.
Question 1
Joseph has dental insurance through their employer’s cafeteria plan. Joseph's dental plan
deduction amount is $75 per semimonthly pay period. If Joseph is paid $1,500 this pay period
and has only this dental deduction, what are Joseph's taxable wages for Medicare this payroll?
$75.00
$712.50
$1,425.00
$1,500.00
Correct
Correct! Taxable wages equal $1,500 - $75 = $1,425.00
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2.
Question 2
Kenya contributes 7% of their gross pay to a 401(k) retirement account. If Kenya is paid $2,000
this semimonthly pay period and has no other deductions, what are Kenya's taxable wages for
federal income tax this payroll?

$1,860.00
$2,000.00
$2,070.00
$2,140.00
Correct
Correct! First, multiply gross earnings times 7%, then subtract that amount from gross earnings.
7% x $2,000 = $140. $2,000 - $140 = $1, 860.00
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3.
Question 3
Shye contributes $150 per week to a Roth 401(k) retirement account. If Shye is paid $1,100 this
weekly pay period and has no other deductions, what are Shye's taxable wages for Federal
Income Tax this payroll?

$850.00
$950.00
$1,000.00
$1,100.00
Correct
Correct! $1,100 - $150.00 = $950.00
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4.
Question 4
Anna-Marie is enrolled in a health insurance plan through their employer. Anna-Marie is
responsible for paying $5,000 of the insurance premiums annually. If Anna-Marie is paid
biweekly, how much will be deducted from each paycheck for insurance?

$96.15
$192.31
$208.33
$416.67
Correct
Correct! $5,000 divided by 26 pays = $192.31
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5.
Question 5
Marvin contributes 9% of their gross pay to a 403(b) retirement account. If Marvin is paid $2,500 this
semimonthly pay period, how much will be deducted for the 403(b) contribution?

$180.00
$225.00
$2,250.00
$2,275.00
Correct
Correct! 9% x $2,500 = $225.00

1.
Question 1
Assume your year-to-date Medicare taxable wages this year are $250,000. If you are paid $10,000
on your next paycheck, how much will be withheld for Medicare taxes?
 $235
 $419
 $367
Correct
That's right! Because you've reached the Additional Medicare Tax threshold of $200,000, your
Medicare tax rate is 2.35% for the remainder of the year. Therefore, you will have $235 withheld
from your paycheck for Medicare taxes.

($10,000 X 2.35% = $235.00)

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2.
Question 2
This time, assume your year-to-date Medicare taxable wages this year are $75,000. If you are paid
$2,700 on your next paycheck, how much will be withheld for Medicare taxes?
 $391
 $39.15
 $270
Correct
Correct! You have not reached the Additional Medicare Tax threshold of $200,000; therefore, you
will have $39.15 withheld from your paycheck for Medicare taxes since your tax rate remains 1.45%.

($2,700 X 1.45% = $39.15)

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Appropriate Tax Rate



3.
Question 3
Nils has a YTD of $199,000 and will be paid $2,000.

What is Nils' Medicare tax rate?

 1.45%
 $1,000 at 1.45% and $1,000 at 2.35%
 2.35%
Incorrect
Incorrect. Employers are required to withhold Additional Medicare Tax on taxable wages over
$200,000. The Additional Medicare Tax rate is 0.9%.

This means once an employee's wages exceed $200,000, they will be taxed at a rate of 2.35%
( 1.45% + 0.9%).

With his current pay, Nils will reach the $200,000 Additional Medicare Tax threshold after the first
$1,000. Therefore, $1,000 of Nils' wages will be taxed at 1.45%. The excess of the wages ($1,000)
will be taxed at a higher rate of 2.35% since Nils is now past the $200,000 threshold.
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4.
Question 4
Wendell has a YTD of $200,000 and will be paid $2,000.

What is the Medicare tax rate?

 1.45%
 $1,000 at 1.45% and $1,000 at 2.35%
 2.35%
Correct
Correct! Wendell has already reached the Additional Medicare Tax threshold of $200,000; therefore,
their wages will be taxed at 2.35% (1.45% + 0.9%).
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5.
Question 5
LaToya has a YTD of $100,000 and will be paid $2,000.

What is LaToya's Medicare tax rate?

 1.45%
 $1,000 at 1.45% and $1,000 at 2.35%
 2.35%
Correct
Correct! LaToya has not yet reached the Additional Medicare Tax threshold of $200,000; therefore,
their tax rate remains at 1.45%.
Calculate the amount of Social Security Tax and Medicare Tax to be withheld from wages.
  Assume the Social Security Tax rate is 6.2%. Use the wage base limit of $168,600
 Assume the Medicare Tax rate is 1.45%. There is no wage base limit
o Assume the Additional Medicare Tax threshold is $200,000
1.
Question 1
Tina has $1,000 in gross wages on the first paycheck of the year. Calculate the amount of
Social Security tax that should be withheld from their wages. Assume Tina does not have any
pretax deductions.
 $0.00
 $14.50
 $62.00
 $76.50
Correct
Correct! The Social Security tax rate is 6.2%.

$1,000 x 6.2% = $62.00

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2.
Question 2
Basti has earned $50,000 so far this year. For this week’s payroll, they are being paid $800.
Calculate the total Medicare to be withheld from this payment. Assume Basti does
not have any pretax deductions.
 $0.00
 $11.60
 $49.60
 $61.20
Correct
Correct! The Medicare tax rate is 1.45%. Basti has not reached the Additional Medicare Tax
threshold of $200,000. Therefore, multiply $800 by 1.45% = $11.60.
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3.
Question 3
Tyrell has earned $250,000 so far this year. For this week’s payroll, they are being paid $5,000.
Calculate the total Medicare to be withheld from this payment. Assume Tyrell does not have
any pretax deductions.
 $0.00
 $45.00
 $72.50
 $117.50
Correct
Correct. Tyrell has reached the Additional Medicare Tax threshold of $200,000. Therefore, multiply
$5,000 by 2.35% (1.45% + .9%) = $117.50.
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4.
Question 4
Sheree has earned $200,000 so far this year. For this week’s payroll, they are being paid $4,000.
Calculate the total Social Security to be withheld from this payment. Assume Sheree does
not have any pretax deductions.
  $0.00
 $248.00
 $306.00
 $342.00
Correct
Correct! Sheree's year-to-date earnings exceed the Social Security Wage Base Limit of $168,600.
Therefore, none of the wages should be taxed.

In this activity, you will identify whether or not an employee has met the Social Security limit for the
current year. If they have not met the limit, you will calculate the social security tax to be withheld
from their paycheck.

 Assume the Social Security tax rate is 6.2%

 Assume the Social Security wage base is $168,600
1.
Question 1
Elisa has left Moon Microchips for a better position at a competitor. Their final paycheck shows YTD
taxable wages of $325,000. Should Social Security tax be withheld from Elisa's first paycheck with
the new employer?
 Yes
 No
Correct
Correct! Elisa’s year-to-date (YTD) taxable wages cannot carry over to the new employer. Instead,
Elisa's YTD balances will start over with the new employer.
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2.
Question 2
How much Social Security tax will Elisa have withheld from the first paycheck at this new job if
Elisa's taxable wages are $2,000? (Hint: Assume the Social Security tax rate is 6.2%.)
 $62.00
 $120.00
 $124.00
 $140.00
Correct
Correct! Elisa will have $124.00 withheld from the paycheck for Social Security. ($2,000 x 6.2% =
$124.00)
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3.
Question 3
Shawn has $50,000 in YTD Social Security taxable wages. This pay period, Shawn will be paid a
salary of $2,500. Should Social Security tax be withheld from this paycheck?
 Yes
 No
Correct
Correct! Shawn's Social Security taxable wages are below the annual wage limit. Therefore, Social
Security taxes should be withheld.
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4.
Question 4
How much Social Security tax will Shawn have withheld from their paycheck if their taxable wages
are $2,500? (Hint: Assume the Social Security tax rate is 6.2%.)
 $15.50
 $105.00
 $115.00
 $155.00
Correct
Correct! Shawn will have $155.00 withheld from their paycheck for Social Security. ($2,500 x 6.2% =
$155.00)
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5.
Question 5
Stephen is a new employee at Moon Microchips. This pay period, Stephen will be paid $1,000.
Should Social Security tax be withheld from their paycheck?
 Yes
 No
Correct
Correct! Stephen's YTD taxable wages are $0, so Social Security taxes should be withheld.
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6.
Question 6
How much Social Security tax will Stephen have withheld from their paycheck if their taxable wages
are $1,000? (Hint: Assume the Social Security tax rate is 6.2%.)
 $6.20
 $60.20
 $62.00
 $76.50
Correct
Correct! Stephen will have $62.00 withheld from their paycheck for Social Security. ($1,000 x 6.2% =
$62.00)
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7.
Question 7
Dante has $250,000 in YTD taxable wages. This pay period, Dante will be paid a salary of $5,000.
Should Social Security tax be withheld from their paycheck?
 Yes
 No
Correct
Correct! Dante's YTD taxable wages have exceeded the annual wage limit. Therefore, Social
Security taxes should NOT be withheld from the $5,000 paycheck.
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8.
Question 8
Dante's YTD taxable wages have exceeded the annual wage limit. Therefore, Social Security taxes
should NOT be withheld from his $5,000 paycheck.
Dante will not have Social Security withheld for the remainder of:
 The quarter.
 The year.
 His career.
 His lifetime.
Correct
Correct! As long as Dante stays with their current employer, Dante will not have Social Security
taxes withheld for the remainder of the calendar year.

1.
Question 1
Which of the following federal employment taxes is NOT paid by the employee?
 Social Security
 Medicare
 Federal Income Tax (FIT)
 Federal Unemployment Tax (FUTA)
Correct
Correct! Only employers pay Federal Unemployment Tax, also abbreviated as FUTA.
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2.
Question 2
Which of the following forms is used to request a taxpayer identification number from an
independent contractor?
 W-4
 W-9
 I-9
 SS-4
Correct
Correct! Form W-9 is used to request a Taxpayer Identification Number (TIN) from an Independent
Contractor (IC).
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3.
Question 3
If an independent contractor fails to furnish a TIN, federal income tax must be withheld at a
designated percentage rate. This is known as what type of withholding?
 Backup
 Supplemental
 Aggregate
 Standard
Correct
Correct! If a TIN is not provided, the employer withholds a designated percentage rate which is
known as backup withholding.
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4.
Question 4
Federal income tax is typically not withheld from the wages of which of the following employees?
  FLSA Exempt
 Statutory
 Executive
 Temporary
Correct
Correct! FIT is typically not withheld from statutory employee wages, and employers only withhold
FICA if certain conditions apply.
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5.
Question 5
Social Security and Medicare taxes should be withheld from statutory employees when certain
conditions apply. Which of the following is NOT one of those conditions?
 Substantially all services are performed personally by the worker.
 The worker does not have a substantial investment in the equipment and tools needed.
 Services are performed on a continuing basis, not a single job or transaction.
 Sells merchandise for resale or supplies for use in the customer’s business.
 Correct
Correct! This is NOT one of the conditions for withholding FICA.
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6.
Question 6
Generally, payments to statutory non-employees are not subject to which of the following?
 Federal Income Tax Only
 Social Security and Medicare Tax Only
 Federal Unemployment Tax Only
 Social Security, Medicare, or Federal Income Tax
Incorrect
Incorrect. Consider reviewing the video, FIT and FICA Explained, for more information.

1.
Question 1
This common employee-paid state tax is not imposed in nine states.
 State Income Tax (SIT)
 State Disability Insurance (SDI)
 State Unemployment Insurance (SUI)
 State Sick Leave Insurance (SLI)
Correct
Correct! State Income Tax (SIT) is not imposed in nine states:

 Texas
 Florida
 Washington
 Tennessee
 Nevada
 New Hampshire
 South Dakota
 Wyoming
 Alaska
2.
Question 2
The calculation of this employee-paid tax varies by state. However, it is typically calculated using tax
tables or as a percentage of taxable wages.
 State Income Tax (SIT)
 State Disability Insurance (SDI)
 State Unemployment Insurance (SUI)
 State Sick Leave Insurance (SLI)
Correct
Correct! State Income Tax (SIT) varies by state. This tax is typically calculated using tax tables or as
a percentage of taxable wages.
3.
Question 3
This state tax is imposed by only five states and, depending on the state, is paid by the employee
only or both the employee and employer.
 State Income Tax (SIT)
 State Disability Insurance (SDI)
 State Unemployment Insurance (SUI)
 State Sick Leave Insurance (SLI)
Correct
Correct! California, New Jersey, Rhode Island, Hawaii and New York have SDI.
4.
Question 4
This (typically) employer-paid tax is calculated as a percentage of taxable wages. The tax rate varies
by employer based on their experience, but the annual taxable wage limit varies by state.
 State Income Tax (SIT)
 State Disability Insurance (SDI)
 State Unemployment Insurance (SUI)
 State Sick Leave Insurance (SLI)
Correct
Correct! All states have employer paid SUI. Only three states require SUI withholding from
employees.
5.
Question 5
Of the five states that impose this tax, three of the states have state-run programs, the other two
require the employer to obtain insurance through a private insurance company.
 State Income Tax (SIT)
 State Disability Insurance (SDI)
 State Unemployment Insurance (SUI)
 State Sick Leave Insurance (SLI)
Correct
Correct! State Disability Insurance (SDI) is in 5 states, two of which require the employer to obtain
private insurance.

Ivy's Ice Cream Shop reported the following tax liabilities for the current lookback period.

Year A:

·Quarter 3: $13,000
·Quarter 4: $14,000

Year B:

·Quarter 1: $12,000

·Quarter 2: $16,000

Based on Ivy's Ice Cream Shop's total tax liability, what deposit frequency will be assigned for
Year C?
 Next-day
 Weekly
 Semiweekly
 Monthly

To determine the deposit frequency for Ivy's Ice Cream Shop for Year C, follow these steps:

1. Calculate the Total Tax Liability for the Lookback Period:

o Year A:
 Q3: $13,000
 Q4: $14,000
 Total for Year A = $13,000 + $14,000 = $27,000
o Year B:
 Q1: $12,000
 Q2: $16,000
 Total for Year B = $12,000 + $16,000 = $28,000
2. Combine the Totals:
o Total Tax Liability = $27,000 (Year A) + $28,000 (Year B) = $55,000
3. Determine the Deposit Frequency Based on the Total Liability:
o The IRS assigns deposit frequencies based on the total tax liability from the
lookback period. For a total liability of $55,000:
 Next-day depositors have a total liability of $100,000 or more.
 Weekly depositors have a total liability between $50,000 and $99,999.
 Semiweekly depositors have a total liability between $25,000 and
$49,999.
 Monthly depositors have a total liability of less than $25,000.

Since Ivy's Ice Cream Shop's total tax liability is $55,000, which falls between $50,000 and
$99,999, their deposit frequency for Year C will be Weekly.

1.
Question 1
Which of the following is taxable for GTL in excess of the exempt coverage amount, but is NOT
required to be withheld?
Social Security Only
Medicare Only
Federal Income Tax Only
FICA and FIT
Correct
Correct! FIT is taxable for GTL in excess of the exempt coverage amount but is not required to be
withheld.
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2.
Question 2
Determine the per pay GTL taxable benefits based on the following:

The employee is turning 53 years old this year, has $157,000 worth of insurance coverage, and is
paid biweekly.

$11.36
$24.61
$107.00
$295.32
Incorrect
Incorrect. $157,000 - $50,000 = $107,000 / $1,000 = $107 $107x .23 = $24.61 per month x 12
months = $295.32 per year $295.32 / 26 pays = $? per pay.

See Practice Assignment: GTL Calculations for reference.

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3.
Question 3
When an employee is allowed to use a company car for business and personal use, they must
account for the business use of the vehicle. This accounting of business use must include all of the
following, EXCEPT:
Mileage
Receipt(s) for fuel
Time and place of travel
Business purpose for the trip
Correct
Correct! Receipts for fuel is not one of the items accounting of business must include.
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4.
Question 4
An employer provided monthly transportation passes to employees that used public transportation to
commute to work. The pass was valued at $420.00 per month. What was the monthly taxable benefit
to the employee if the IRS exclusion limit for that year was $300.00?
$0.00
$120.00
$300.00
$420.00
Correct
Correct! $420.00 (pass value) - $300.00 (IRS exclusion limit) = $120.00 (amount taxed)
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5.
Question 5
An employer paid $299.00 per month for an employee to participate in a qualified vanpool. If the IRS
exclusion limit was $300.00, calculate the taxable and non-taxable benefit that the employee
received.
Taxable: $299.00; Non-taxable: $0.00
Taxable: $250.00; Non-taxable: $49.00
Taxable: $49.00; Non-taxable: $250.00
Taxable: $0.00; Non-taxable: $299.00
Correct
Correct! The amount the employer is paying for this benefit ($299) is below the IRS exclusion limit
($300); therefore, the employee is not taxed.
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6.
Question 6
An employer provided a $345.00 per month parking space to an employee near their business. The
employee contributed $70.00 per month for the space. What was the monthly taxable benefit to the
employee if the IRS exclusion limit for that period was $300.00?
$0.00
$45.00
$275.00
$300.00
Incorrect
Incorrect. Consider reviewing the video, Transportation, for more information.
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7.
Question 7
Under IRS regulations, employer-provided Group Term Life (GTL) insurance premiums for coverage
in excess of what amount are considered taxable income?
$25,000
$50,000
$75,000
$100,000
Correct
Correct! Under IRS regulations, employer-provided GTL insurance premiums for coverage in excess
of $50,000 are considered taxable income.
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8.
Question 8
Which of the following is NOT one of the IRS-approved valuation methods for determining the
taxable value of the personal use of a company vehicle?
Cents-per-mile method
Commuting method
Lease value method
Personal mileage method
Incorrect
Incorrect. Consider reviewing the reading, Special Valuation Methods, for more information.
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9.
Question 9
An employer pays 80% of the cost for an employee to park in a parking garage close to the office.
The monthly cost of the parking is $320.00. Calculate the value of the parking that is included in the
employee's income if the IRS exclusion limit is $300.00.
$0.00
$20.00
$44.00
$64.00
Incorrect
Incorrect. $320 (cost of parking) x .8 (percentage employer pays) = $? Is this amount more or less
than the IRS exclusion limit of $300?

Consider reviewing the video, Transportation, for more information.

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10.
Question 10
An employee drove a company car 23,426 miles in the first six months of the year. Their business
purpose accounting identifies that 16,920 miles were business-related. What is the taxable value of
the auto benefit the employee received?

Assume the following: The cents-per-mile method is used, the qualifications to use this method have
been met, and the standard mileage rate is $0.655 per mile.
$4,261.43
$6,506.00
$11,082.60
$15,344.03
Correct
Correct!
23,426 - 16,920 = 6,506 personal miles.

6,506 (personal miles) x $0.655 cents = $4261.43.

Here are the answers to the questions based on payroll and tax deposit rules:

1. Question 1
Quarry Ready Mix just made their semiweekly deposit. Which of the following taxes was
NOT included in this deposit?
o Federal Unemployment Tax (FUTA)

Reason: FUTA is not included in semiweekly deposits; it is deposited quarterly or

annually.

2. Question 2
On Thursday, Jessica sees her electronic pay statement. She will receive her direct
deposit on Friday, the check date, and is compensated for the period of Sunday through
Saturday. Which of these is the date of constructive receipt?
o Friday

Reason: Constructive receipt is when the employee has control over their wages, which
is the day the payment is available.

3. Question 3
Big Time Java, Inc. had $48,000 in total tax liability during their lookback period. Based
on this, what deposit frequency will be assigned to them?
o Semiweekly

Reason: For a total tax liability between $25,000 and $49,999, the deposit frequency is
semiweekly.

4. Question 4
Peery Construction, Inc. received a notice from the IRS that their tax deposit frequency
will be changed. To make this determination, the IRS examined the company’s total
federal tax:
o Tax liability during the lookback period.

Reason: The IRS uses the lookback period’s tax liability to determine deposit frequency.

5. Question 5
Gino’s Hair Salon is a semiweekly depositor and pays their employees on Friday. Their
tax liability for payroll this week is $53,000. When is this tax deposit due?
o Wednesday of the following week
 Reason: For semiweekly depositors, taxes from Friday are due the following Wednesday.

6. Question 6
Silver Screen, Inc. deposits their payroll taxes semiweekly. They incur a tax liability of
$60,000 on Monday and $105,000 on Tuesday. When should these taxes be deposited?
o $60,000 on Thursday and $105,000 on Friday

Reason: Taxes incurred on Monday are due the following Thursday, and taxes incurred
on Tuesday are due the following Friday.

7. Question 7
Stan’s Donuts is a monthly depositor. They pay their employees on the 1st and 15th of
the month. What is the cutoff date for the payrolls done this month?
o The 15th of next month

Reason: For monthly depositors, the cutoff date for deposits made during the month is
the 15th of the following month.

1.
Question 1
Quarry Ready Mix just made their semiweekly deposit for the bonus payroll they processed earlier
this week. Which of the following taxes was NOT included in this deposit?
Federal Income Tax (FIT)
Social Security
Medicare
Federal Unemployment Tax (FUTA)
Correct
Correct! Federal Income Tax, Social Security, and Medicare are all deposited at an assigned
frequency of semiweekly or monthly. In contrast, Federal Unemployment (FUTA) is deposited
quarterly.
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2.
Question 2
Julie receives a pay statement on April 15th for the April 4th-April 10th pay period. Julie's check is
dated for April 16th. Which of these dates is the date of Constructive Receipt?
April 15th
April 11th
April 16th
April 10th
Correct
Correct! The Constructive receipt is typically the check date of your payroll.
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3.
Question 3
Dottie’s Donuts had $60,000 in total tax liability during their lookback period. Based on this, what
deposit frequency will be assigned to them?
Next-Day
Weekly
Semiweekly
Monthly
Correct
Correct! If the total tax liability is more than $50,000 the deposit frequency is Semiweekly. If the total
tax liability is less than $50,000 the deposit frequency is Monthly.
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4.
Question 4
Peery Construction, Inc. received a notice from the IRS that their tax deposit frequency will be
changed for the upcoming calendar year. To make this determination, the IRS examined the
company’s total federal tax:
Tax liability during the lookback period.
Tax liability during the current calendar year.
Tax deposits during the previous calendar year.
Tax deposits during the lookback period.
Correct
Correct! As the employer, the IRS assigns you a deposit frequency based on how much tax liability
you had in your lookback period.
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5.
Question 5
Bob’s Burger Bar is a semiweekly depositor and pays their employees on Monday. Assuming today
is Monday and there are no holidays involved, when is the tax deposit due for today’s payroll?
Wednesday of this week
Wednesday of next week
Friday of this week
Friday of next week
Incorrect
Incorrect. Consider reviewing the videos, Tax Deposits Overview and Tax Deposits: In-Depth, for
more information.
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6.
Question 6
Speedy Deliveries deposits their payroll taxes monthly. They incurred a tax liability of $2,000 on the
10th of this month and $2,700 on the 24th of this month. When should these taxes be deposited?
$2,000 on the last day of this month and $2,700 on the 15th of next month
$4,700 on the 1st of next month
$4,700 on the last day of this month
$4,700 on the 15th of next month
Correct
Correct! With a monthly deposit frequency, tax liabilities within the month accumulate until the cutoff
date. The cutoff day is the last day of the month, and the deposit due date is the 15th of the next
month.
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7.
Question 7
Stan’s Donuts is a monthly depositor. They pay their employees on the 1st and 15th of the month.
What is the cutoff date for the payrolls done this month?
The last day of this month
The 1st day of next month
The 15th of this month
The 15th of next month
Incorrect
Incorrect. Consider reviewing the video, Tax Deposits Overview, for more information.

1.
Question 1
Quarry Ready Mix just made their semiweekly deposit for the bonus payroll they processed
earlier this week. Which of the following taxes was NOT included in this deposit?
Federal Income Tax (FIT)
Social Security
Medicare
Federal Unemployment Tax (FUTA)
Correct
Correct! Federal Income Tax, Social Security, and Medicare are all deposited at an assigned
frequency of semiweekly or monthly. In contrast, Federal Unemployment (FUTA) is deposited
quarterly.
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2.
Question 2
On Thursday, Jessica has visibility of her electronic pay statement. She will receive her direct
deposit on Friday, the check date, and is being compensated for the period of Sunday through
Saturday. Which of these is the date of constructive receipt?
Thursday
Friday
Saturday
Sunday
Correct
Correct! The Constructive receipt is typically the check date of your payroll.
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3.
Question 3
Dottie’s Donuts had $60,000 in total tax liability during their lookback period. Based on this,
what deposit frequency will be assigned to them?
Next-Day
Weekly
Semiweekly
Monthly
Correct
Correct! If the total tax liability is more than $50,000 the deposit frequency is Semiweekly. If the
total tax liability is less than $50,000 the deposit frequency is Monthly.
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4.
Question 4
King Enterprises receives an IRS notice that for the upcoming calendar year, they must deposit
their taxes more frequently. What factors does the IRS examine to make this determination for
the company?
Tax liability during the lookback period.
Tax liability during the current calendar year.
Tax deposits during the previous calendar year.
Tax deposits during the lookback period.
Correct
Correct! As the employer, the IRS assigns you a deposit frequency based on how much tax
liability you had in your lookback period.
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5.
Question 5
Gino’s Hair Salon is a semiweekly depositor and pays their employees on Friday. Their tax
liability for payroll this week is $53,000. Assuming today is Friday and there are no holidays
involved, when is this tax deposit due?
Wednesday of the following week
Friday of the same week
Friday of the following week
Monday of the following week
Incorrect
Incorrect. Consider reviewing the videos, Tax Deposits Overview and Tax Deposits: In-Depth,
for more information.
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6.
Question 6
Silver Screen, Inc. deposits their payroll taxes semiweekly. They incur a tax liability of $60,000
on Monday and $105,000 on Tuesday. Assuming no holidays are involved, when should these
taxes be deposited?
$165,000 on Wednesday
$60,000 on Thursday and $105,000 on Friday
$165,000 on Thursday
$60,000 on Friday and $105,000 next Wednesday
Correct
Correct! For a semiweekly depositor, the cutoff period is Saturday to Tuesday and Wednesday to
Friday. Once the tax liability in the cutoff period reaches $100k or more, the deposit must be
made the next banking day. This employer's tax liability reached $165,000 on Tuesday;
therefore, the cutoff day is Tuesday and the deposit is due the next banking day, which is
Wednesday.
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7.
Question 7
Aim Aerospace is a semiweekly depositor. Their normal payday is on Monday, but they often
process additional payroll checks throughout the week. What is the cutoff date to include the
additional payroll tax liabilities with Friday’s tax deposit?
Monday
Tuesday
Wednesday
Friday
Incorrect
Incorrect. Consider reviewing the video, Tax Deposits Overview, for more information.

1.
Question 1
Valencia Jewlers just made their monthly deposit for the payrolls they processed last month. Which
of the following taxes was NOT included in this deposit?
Federal Income Tax
Social Security
Medicare
Federal Unemployment Tax
Correct
Correct! Federal Income Tax, Social Security, and Medicare are all deposited at an assigned
frequency of semiweekly or monthly. In contrast, Federal Unemployment (FUTA) is deposited
quarterly.
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2.
Question 2
On Thursday, Jessica has visibility of her electronic pay statement. She will receive her direct
deposit on Friday, the check date, and is being compensated for the period of Sunday through
Saturday. Which of these is the date of constructive receipt?
Thursday
Friday
Saturday
Sunday
Correct
Correct! The Constructive receipt is typically the check date of your payroll.
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3.
Question 3
Dottie’s Donuts had $60,000 in total tax liability during their lookback period. Based on this, what
deposit frequency will be assigned to them?
Next-Day
Weekly
Semiweekly
Monthly
Correct
Correct! If the total tax liability is more than $50,000 the deposit frequency is Semiweekly. If the total
tax liability is less than $50,000 the deposit frequency is Monthly.
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4.
Question 4
King Enterprises receives an IRS notice that for the upcoming calendar year, they must deposit their
taxes more frequently. What factors does the IRS examine to make this determination for the
company?
Tax liability during the lookback period.
Tax liability during the current calendar year.
Tax deposits during the previous calendar year.
Tax deposits during the lookback period.
Correct
Correct! As the employer, the IRS assigns you a deposit frequency based on how much tax liability
you had in your lookback period.
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5.
Question 5
Bob’s Burger Bar is a semiweekly depositor and pays their employees on Monday. Assuming today
is Monday and there are no holidays involved, when is the tax deposit due for today’s payroll?
Wednesday of this week
Wednesday of next week
Friday of this week
Friday of next week
Correct
Correct! If a semiweekly depositor has a check date of any day Saturday through Tuesday, the cutoff
day is Tuesday, and the deposit due date is three federal banking days from the cutoff, which is
Friday.
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6.
Question 6
Speedy Deliveries deposits their payroll taxes monthly. They incurred a tax liability of $2,000 on the
10th of this month and $2,700 on the 24th of this month. When should these taxes be deposited?
$2,000 on the last day of this month and $2,700 on the 15th of next month
$4,700 on the 1st of next month
$4,700 on the last day of this month
$4,700 on the 15th of next month
Correct

Correct! With a monthly deposit frequency, tax liabilities within the month accumulate until the cutoff
date. The cutoff day is the last day of the month, and the deposit due date is the 15th of the next
month.
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7.
Question 7
Aim Aerospace is a semiweekly depositor. Their normal payday is on Monday, but they often
process additional payroll checks throughout the week. What is the cutoff date to include the
additional payroll tax liabilities with Friday’s tax deposit?
Monday
Tuesday
Wednesday
Friday
Incorrect
Incorrect. Consider reviewing the video, Tax Deposits Overview, for more information.

1.
Question 1
Calculate the amount that should be entered in Box 2 of Form 941. (Box 2 = federal taxable
wages, not gross wages)

Recall that for box 2, you should enter the total wages paid, taxable benefits provided to employees,
tips that were reported to you, and other compensation paid to employees that is taxable for federal
income tax.

$8,000.00
$10,500.00
$10,800.00
Incorrect
Incorrect. The amount that should be entered in Box 2 on Form 941 is:

$11,000 (QTD Gross Wages) - $300 (Med125) - $200 (401(k)) = $ ?

Play Video
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2.
Question 2
View the company totals below. Then, calculate the amount that should be entered in Box 3 of
Form 941.

Recall that for box 3, you should enter the federal income tax withheld from the wages, tips, taxable
benefits, and other compensation paid to your employees this quarter.

$840.00
$663.40
$393.75
Incorrect
Incorrect. The total FIT withheld is: $840.00.

Play Video
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3.
Question 3
Review the company totals below. Then, calculate the amount that should be entered in Column
1, Box 5a of Form 941.
Recall that for Column 1 of box 5a, you should enter the total wages and taxable benefits
subject to social security taxation. Do not include tips. The taxable wages reported for each
individual employee should not exceed the annual limit.

$10,700
$10,800
$840
Correct
Correct!

$11,000 (QTD Gross Wages) - $300 (Med125) = $10,700

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4.
Question 4
Review the company totals below. Then, calculate the amount that should be entered in Column
2, Box 5a of Form 941.
Recall that for column 2 of box 5a, multiply the wages reported in column 1 by 12.4% (6.2% for the
employee and 6.2% for the employer). This is the total social security tax that should have been
paid.

$663.40
$1,326.80
$106.88
Correct
Correct!

$10,700 (Taxable wages from Column 1) x 0.124 (Employee/employer combined tax rate) =
$1,326.80
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1.
Question 1
Review the deposit payment history below. Then, calculate the amount that should be entered in
Box 13a of Form 941.

Box 13a is where you will indicate the total deposits you made for the quarter.
$2,477.12
$1,238.56
$825.71
Correct
Correct! There were 2 deposits in the payment history.

$1,238.56 + $1,238.56 = $2,477.12

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2.
Question 2
Based on the total taxes and the tax deposits made, do we have a Balance Due (Box 14)
situation or do we have an Overpayment (Box 15)?

Box 14 or 15 - This is where you will indicate either the balance due or overpayment amount.

Box 14: Balance Due

Box 15: Overpayment
Incorrect
Incorrect. We have an overpayment of 2 cents.

$2,477.12 - 2,477.10 = $0.02

Calculate the requested Form W-2 information for the following:

Neri’s last pay statement for the year has the following year-to-date amounts:

Gross: $75,000

401(k) Pre-tax: $5,000

Pretax Medical: $5,000

Charity: $3,500
Using these year-to-date balances, calculate the amount that should print in Box 1 (Wages, tips,
and other compensation) of Neri's Form W-2.
$55,000
$65,000
$75,000
Correct
Correct! Box 1 is reduced by Neri's 401(k) pre-tax contributions and pre-tax medical withholdings,
which are made through a cafeteria plan. Therefore, Neri's FIT taxable wages in box 1 of his W-2
should be $65,000.

$75,000 (Gross) - $5,000 (Pre-tax 401k) - $5,000 (Pre-tax Medical) = $65,000.00

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2.
Question 2
Calculate the requested Form W-2 information for the following:

Shannon’s last pay statement for the year has the following year-to-date amounts:

Gross: $95,000

401(k) Pre-tax: $5,000

Pretax Medical: $4,500

Creditor Garnishment: $500

Using these year-to-date balances, calculate the amount that should print in Box 3 (Social Security
wages) of Shannon's Form W-2.
$90,500
$85,000
$99,500
Correct
Correct! Box 3 is reduced by Shannon's pre-tax medical withholdings, but not the 401(k) pre-tax
contributions. Therefore, Shannon's Social Security taxable wages in Box 3 of Form W-2 should be
$90,500.

$95,000 (Gross) - $4,500 (Pre-tax Medical) = $90,500

1.
Question 1
Which of the following are considered guidelines for troubleshooting payroll issues? (Select all that
apply.)
As the employer. offer product or knowledge training to payroll specialists.
Correct
Correct! Employers should offer product or knowledge training to payroll specialists to help ensure
they understand the correct workflows and procedures.
As the employer, update payroll specialists when payroll policies change.
Correct
Correct! Employers should update payroll specialists when payroll policies change to avoid errors.
As the payroll specialist, practice active listening.
Correct
Correct! Payroll specialists should practice active listening to help ensure they understand the issue
or error occurring.
As the payroll specialist, ask investigative questions.
Correct
Correct! Payroll specialists should ask investigative questions to identify the root cause of issues and
concerns.
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2.
Question 2
Cole’s Confections, a local business, filed their Form 941 on time. It is a few weeks later and the
owner of the company realizes they need to make a correction to the wage and tax information they
reported. Which of the following needs to be done to make a correction to their previously filed Form
941?

A late filing
A new Form 941
An amendment
Form 943
Correct
Correct! An amendment is a correction to a previously filed tax form.
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3.
Question 3
Arman's Antiques, a local business, forgot to file their Form 941 on time. Which of the following
needs to be completed to correctly file their taxes?

A late filing
An amendment
Form 943
Correct
Correct! A late filing is submitted when the original filing was not done on time.