Deck 9: Payroll Procedures: the Employees Perspective

Question 1

Which of the following is an optional payroll deduction?

A) Charitable Contributions
B) Income Taxes
C) Canada Pension Plan
D) Employment Insurance

Answer 1

A

Question 2

A TD1 Form

A) calculates the maximum CPP an employee has to pay.
B) is sent to each employee annually.
C) specifies the claim code for each employee.
D) is used to complete your income tax return.

Answer 2

C

Question 3

The amount of EI to be deducted from an employee with weekly earnings of $400.00 would be (using the tables)

A) $2.82.
B) $17.42.
C) $7.53.
D) $11.36.

Answer 3

C

Question 4

One benefit of using computer software to complete a payroll is NOT:

A) It creates fewer calculation errors.
B) It is preferred by Revenue Canada.
C) It speeds up the payroll process.
D) It makes year-end reporting much easier.

Question 5

Net pay is the same as

A) gross pay.
B) take home pay.
C) before taxes pay.
D) pay before deductions.

Question 6

Income tax deduction amounts for employees in all provinces and territories in Canada (except Quebec) must be calculated based on

A) Federal Tax rates only.
B) Provincial/Territorial Tax rates only.
C) both Federal and Provincial/Territorial Tax rates.
D) the TONI Tax tables.

Question 7

The form used to determine an employee's net claim code is called a

A) T4.
B) Record of Employment.
C) TD1.
D) Employee Earnings Record

Question 8

Georgia Ally's hourly rate is $10.00, and she worked 44 hours during the week. Assuming an overtime rate of time and a half over 40 hours, Georgia's gross pay is

A) $400.
B) $460.
C) $430.
D) $350.

Question 9

Which of the following is a law that has no effect on payroll net earnings?

A) Minimum Wage
B) Federal Income Tax
C) Provincial Income Tax
D) Canada Savings Bond

Question 10

Which of the following not a statutory payroll deduction?

A) Registered Retirement Savings Plans
B) Income Taxes
C) Canada Pension Plan
D) Employment Insurance

Question 11

The amount of CPP to be deducted from an employee with earnings this week of $800 and cumulative earnings for the year before this week of $54,900 would be

A) $10.63.
B) $36.22.
C) $0.00.
D) $106.46.

Question 12

The automatic increase of claim amounts that account for inflation is called

A) cost of living increases.
B) indexing.
C) increments.
D) deductions.

Question 13

If Reed Bar's hourly wage is $8.00 and he worked 35 hours during the week, what is his gross pay for the week?

A) $300
B) $320
C) $280
D) $250

Question 14

Workers' compensation

A) insures employees against losses they may incur due to injury or death while on the job.
B) is based on the total estimated payroll.
C) is paid for by the employer.
D) All of the above are correct.

Question 15

The amount of CPP to be deducted from an employee with earnings this week of $800 and cumulative earnings for the year of $21,000 would be

A) $0.00.
B) $36.27.
C) $39.60.
D) $234.46.

Question 16

The amount of EI to be deducted from an employee with earnings of $800 this weekly period would be (using the tables)

A) $15.09.
B) $18.25.
C) $22.63.
D) $24.73.

Question 17

The actual tax Bram pays for the year will be affected by

A) the amount of earnings he makes from all sources.
B) his charitable donations made.
C) any deductible tuition he has paid.
D) All of the above.

Question 18

All of the following are statutory payroll deductions EXCEPT

A) Income Tax.
B) Canada Pension Plan.
C) Employment Insurance.
D) Canada Savings Bond Payments.

Question 19

A pay period is defined as

A) weekly.
B) bi-weekly.
C) monthly.
D) All of the above are correct.

Question 20

Which of the following pays no CPP premiums this month?

A) A person under 18 years of age
B) A person over 70 years of age
C) A person earning less than $200 this month
D) All of the above.

Question 21

Net pay equals

A) gross pay less all deductions.
B) regular earnings + overtime earnings.
C) regular earnings.
D) net earnings + overtime earnings greater than the amount withheld from the employee.

Question 22

Gross pay is the same as

A) net pay.
B) take-home pay.
C) before taxes pay.
D) pay before deductions.

Question 23

Gross Earnings are the same as

A) regular earnings only.
B) regular earnings + overtime earnings.
C) net earnings.
D) net earnings + overtime earnings.

Question 24

Workers' compensation provides insurance for employees who are

A) unemployed due to an economic downturn.
B) unemployed due to a plant closing.
C) injured while on the job.
D) not paid enough.

Question 25

If the employee has $40 withheld from their cheque for CPP, what is the amount that the employer would need to pay for CPP?

A) $200
B) $100
C) $40
D) $400

Question 26

Valerie Chandler works 46 hours as a coffee barista and earns $12 per hour. Compute her weekly pay assuming an overtime (more than 40 hours) rate of 1.5.

A) $552
B) $588
C) $480
D) $624

Question 27

Regular earnings are equal to total earnings less deductions.

Question 28

If Sheila worked 8 hours a day for a total of 40 hours this week, how many hours of overtime will Sheila earn?

A) 0
B) 1
C) 9
D) 5

Question 29

Todd earns an hourly rate of $20 and had taxes, CPP, and EI withheld totaling $200. What would his net earnings be if he worked 46 hours (assuming double time over 40 hours)?

A) $840
B) $780
C) $720
D) $860

Question 30

Blue's Tax Service has two types of employees, management and clerical support. The company estimates that it will pay the clerical support $240,000 next year and the managers $315,000. For every $100, the company pays $0.14 into the workers' compensation insurance. Calculate the amount of worker's compensation insurance.

A) $777
B) $336
C) $441
D) None of the above are correct.

Question 31

CRA stands for

A) Canada Revenue Agency.
B) Civil Revenue Agency.
C) Canadian Revenue and Affiliates.
D) Canadian Revenue Association.

Question 32

Derek works 48 hours at a rate of pay of $15 per hour. He receives double pay over 40 hours. What is his gross pay?

A) $800
B) $720
C) $780
D) $840

Question 33

Bob Hill's hourly rate is $25.00, and he worked 39 regular hours during the week. What is his gross pay for the week?

A) $950
B) $780
C) $1,000
D) $975

Question 34

Kim received $1,780 for working 40 regular hours. What was Kim's rate of pay per hour?

A) $44.50
B) $44.00
C) $45.00
D) $40.00

Question 35

If Sheila worked 12 hours on Tuesday and 5 hours on Wednesday this week, how many hours of overtime will Sheila earn?

A) 4
B) 17
C) 12
D) 0

Question 36

Payroll periods can be

A) 26 pay periods/year.
B) 12 pay periods/year.
C) 52 pay periods/year.
D) All of the above are correct.

Question 37

Net pay and gross pay mean the same.

Question 38

If Carrie Stein's hourly wage is $40.00, and she worked 43 hours during the week. Assuming an overtime rate of time and a half over 40 hours, Carrie's gross pay is?

A) $1,780
B) $1,720
C) $2,580
D) $1,600

Question 39

Union dues are a deduction that is usually matched by the employer.

Question 40

If the employee has $200 withheld from their cheque for federal income tax, what is the amount that the employer would need to pay for their portion of the federal income tax?

A) $200
B) $100
C) $0
D) $400

Question 41

The CPP premium rate is currently 3.2% of gross earnings.

Question 42

Income Taxes have no maximum amount.

Question 43

The Income Tax, EI and CPP tables are found on the Canada Revenue Agency website.

Question 44

If a company pays out a bonus at year end, no income tax is deducted from it.

Question 45

All provinces use the same rates for Income Taxes.

Question 46

Like CPP, Employment Insurance has a cut-off point where there is no longer Employment Insurance withheld.

Question 47

An employee pays no CPP premiums once past $54,900 in gross earnings for 2016.

Question 48

Computing payroll for employees can sometimes be quite complicated.

Question 49

A TD1 Claim Code represents a certain amount of a person's income that will be considered tax exempt.

Question 50

Each province is responsible for administering an employment insurance program.

Question 51

CPP, EI and Income Tax are statutory deductions.

Question 52

The CPP premium rate is currently 1.88% of gross earnings.

Question 53

The CPP premium rate is currently 4.95% of gross earnings.

Question 54

The EI premium rate is currently 2.7% of gross earnings.

Question 55

The CPP premium rate will be the same every year.

Question 56

Like EI, CPP has a maximum deduction per year.

Question 57

Like CPP, Federal Income Tax has a cut-off point where there is no longer Income Tax withheld.

Question 58

Gross pay is the amount that the employee takes home.

Question 59

The employer is responsible for verifying the claims made by employees on TD1 Forms.

Question 60

The higher the TD1 code a person claims, the less income tax is paid.

Question 61

Appealing Apparel Company pays its sales employees an hourly rate, plus time and a half for any hours over 35 per week. Complete the calculation of gross pay for the following three persons the week below:
Hourly Rate Hours Worked Gross Pay
April Jenkins $17 44
Tim Hansman $18 36
Penny Leung $19 20

Question 62

After about 15 years of annual rate increases (from 1.8% to the current 4.95%), the CPP rate has remained the same for several years. What is the reason for this?

Question 63

Regular earnings are equal to total earnings less deductions.

Question 64

From the following information, please complete the chart for gross earnings for the week. Assume an overtime rate of time and a half over 40 hours.
Hourly Rate No. of Hours Gross Earnings
Ron Jhamal $7 44 ________
J.C. Latour $8 35 ________
Jerry Chan $9 43 ________

Question 65

All employees must contribute to provincial and federal income tax.

Question 66

A maximum limit is set for all income tax deductions.

Question 67

Calculate the total wages earned for each employee (assume an overtime rate of time and a half over 40 hours):
a) Dave earns $22 per hour and worked 47 hours in one week.
b) Jeff earns $18 per hour and worked 41 hours in one week.

Question 68

Gross pay is the amount that the employee takes home.

Question 69

The formula for computing EI Premiums to be deducted from an employee's weekly pay is Gross Pay × 1.88%, maximum $67.30.

Question 70

Net pay is equal to gross pay less deductions.

Question 71

Maximum contributions for CPP, EI, and Income Tax change on an annual basis.

Question 72

From the following information, complete the chart for gross earnings for the week. Assume an overtime rate of time and a half over 40 hours.
Hourly Rate No. of Hours Gross Earnings
Worked
Kurt Nelson $14 44 ________
Sabrina Schmitz $16 35 ________
Kirk Seifker $18 43 ________

Question 73

The formula for computing CPP Premiums to be deducted from an employee's weekly pay is (Gross Pay - 67.30) × 4.95%, subject to maximum premium per year.

Question 74

The EI premium rate is currently 4.95% of gross earnings.

Question 75

All provinces use the same percent for their income tax rate.

Question 76

Calculate the total wages earned for each employee (assume an overtime rate of time and a half over 40 hours).
a) Deon Brown earns $12 per hour and worked 42 hours in one week.
b) Gerald Cornelius earns $16 per hour and worked 48 hours in one week.

Question 77

The EI premium rate is currently 1.88% of gross earnings.

Question 78

Companies can choose different pay periods for hourly workers versus salary workers.

Question 79

Why would a business decide to use an external company to prepare their payroll cheques and related reports?

Question 80

Calculate the number of hours of overtime paid to each of the following employees if they are paid overtime for hours over 40 per week or over 8 hours per day.
Monday Tuesday Wednesday Thursday Friday Saturday
Jim 8 7 9 6 5 3
Janet 12 9 2 4 11
Delbert 7 4 15 14 12 2