Download Payroll Compliance Review: FLSA Regulations and Best Practices and more Exams Business Statistics in PDF only on Docsity!
FPC Review
Under the FLSA, which pay hours can be counted towards determining the regular rate of pay: Vacation, Holiday, Sick, or None of the above. correct answer None of the above Does the FLSA require overtime be paid weekly? correct answer No What agreement must be made between the hospital/nursing home personnel and employee to use the 14-day work period instead of the 7-day work week for computing overtime before the work is performed? correct answer 8/80 rule A work week as defined by the FLSA is a fixed, recurring period of how many consecutive hours? correct answer 168 Are employees who are covered by the FLSA minimum wage and overtime requirements exempt? correct answer No If an employee reports new hires magnetically or electronically, how many times must the data be sent in a calendar month? correct answer At least two transmissions, 12-16 days apart Employers can verify a newly hired employee's eligibility to work in the the US using what system? correct answer E-Verify Waiting time that is compensable if the employee is on the employer's premises, does not have ample time to conduct personal business and is waiting for a short period until s/he can commence work is called what? correct answer Engaged to be waiting What are the tests to determine if employees are covered by FLSA? correct answer Enterprise (2 or more employees engaged in interstate commerce > $500K and always hospitals, gov't, schools, nursing care) and Individual (engaged in interstate commerce, even if employer is not covered)
When a paycheck is voided in a subsequent quarter, what issues need to be addressed? correct answer Corrections may be needed to 941s, state tax and unemployment reports, possibly a W- 2C Payroll compliance is... correct answer Processing federal, state and local withholding, depositing and reporting requirements on a timely basis and paying employees as required by FLSA and state wage and hour rules What is a Zero Balance Account? correct answer When all payroll checks have cleared the account, the account balance should be zero. Once data is entered in the system, it will calculate, update records and return results to the the user so it is available immediately. This is called what? correct answer Online real-time processing Payroll bank accounts should be reconciled how often? correct answer Monthly Is prenotification mandatory? correct answer No An open check number may signify what? correct answer A manual check has not been recorded or an employee has not cashed the check What are the benefits for employees paid by paycards? correct answer Cost savings, convenience, safety, time savings What information is required to set up direct deposit? correct answer Type of account, account and bank routing numbers What are the two most common methods to calculate withholding on regular wages? correct answer Percentage and wage bracket methods
Cafeteria plan contributions are subject to which taxes? correct answer Cafeteria plan contributions are not subject to any taxes. A contractual agreement between an organization and an employee whereas the organization makes a promise to defer up to $18,000 of compensation in the current year to the participant to a future date for services currently rendered is what type of deferred compensation? correct answer 457(b) What is the business standard mileage rate for 2015? correct answer .575 per mile When calculating the employee's age for group term life, what date is used for the year in which the benefit is taxable? correct answer December 31st Are benefits under IRC Section 132 (qualified transportation fringe benefits) excluded from taxable earnings? correct answer Yes What are the due dates for depositing FUTA tax? correct answer April 30, July 31, October 31, January 31 What form is used to report nonpayroll items and income tax withholding on pensions, annuities, IRAs, gambling winnings and back-up withholding shown on Forms 1099 and W-2G? correct answer 945 Employers with a history of an annual tax liability less than $1,000 are designated by the IRS to file which form? correct answer 944 FUTA tax is calculated based on the first $7,000 of each workers annual wage. What it the FUTA tax rate? correct answer 6.0% Is Box 11 on Form W-2 used by the SSA to determine if any amounts reported in Box 1 or Box 3 and/or Box 5 were earned in a prior year? correct answer Yes
What is the backup withholding rate? correct answer 28% The failure to withhold income tax, SS, Medicare and not pay withholdings to IRS causes what type of penalty? correct answer 100% of the withholding, plus officers or employees could be personally liable for an equal amount. What is reported in W-2 Box 11? correct answer Nonqualified deferred compensation and 457(b) Journal correct answer Chronological record of a businesses daily transactions. General Ledger correct answer Record of business transactions by account. Who set the standards for recording financial transactions? correct answer FASB Transactions may be recorded before any money changes hands, but after the essence of the transaction has been complete. What is this known as? correct answer Matching principle What provides a look at the company's financial condition at a specific point in time? correct answer Balance sheet What are the five principles associated with optimum customer service in payroll? correct answer Empathy, responsiveness, tangibles, reliability and assurance Employees' privacy rights are governed by what? correct answer Federal, state and company policy
How frequently must an employer recognize the value of noncash fringe benefits as income? correct answer At least once a year, no later than December 31 Four employees carpool to work in an employee's 8-passenger van that is used only to commute to and from work. The employer reimburses all of the commuting expenses. The monthly costs are $135. How much of the carpool reimbursement is taxable? correct answer $ What are federal unemployment taxes used for? correct answer To fund the administration of the unemployment insurance program In order to reconcile Forms W-2 with Form 941 when third-party sick pay is paid, what form must be filed with the IRS? correct answer 8922 Employer's Annual FUTA Return correct answer Form 940 Employer's Quarterly Federal Tax Return correct answer Form 941 Employer's Annual Federal Tax Return correct answer Form 944 (annual tax liability of $1,500 or less) Annual Return of WIthheld Federal Income Tax correct answer Form 945 (non-payroll withheld FIT- Pensions, gambling winnings, back withholding, etc) Third-Party Sick Pay Recap correct answer Form 8922 (use when liability for the employer portion of SS and Medicare taxes has been shifted from the third-party payer or insurance company to the employee's employer) An employee who is paid monthly with YTD wages of $25,000 was disabled for four months and was paid $6,200 by a third-party insurer. The disability plan premiums are paid entirely by the employer. No From W-4S is provided to the insurer, but claimed Married with two allowances
on their W-4. Calculate the amount of FIT, SS and Medicare taxes the third party payer must withhold. correct answer $474.30 (SS and Medicare only, 7.65%) An employee is injured on the job and is unable to work for three months. During that time, the employee receives $5,200 in WC benefits. The employee has provided a Form W-4 claiming Married with two allowances. Using the Wage-Bracket Method for semi-monthly pay, calculate the amount that must be withheld from the WC benefits for FIT, SS and Medicare taxes. correct answer 0 taxes withheld from WC Disabled and unable to work for 8 calendar months, an employee is paid $700 per month by a third party insurer. The entire cost of the plan is funded by the employer. The employee is single with no dependents, and does not complete Form W-4S. Calculate the total amount that must be withheld form the employee's sick pay for FIT, SS and Medicare taxes. correct answer $321.30 (SS and Medicare on first six months) An employee, who was hurt on the job two months ago, received $200 per month from the state WC fund and a total of $350 of supplemental WC from the employer. What taxes should be withheld? correct answer SS and Medicare on supplemental only When an employee is on a 21-day assignment in the National Guard or Armed Forces Reserve, and the employee receives $1,000 in differential military pay, the pay is reported on what Form? correct answer Form W-2, boxes 1, 3, 5 When are nonqualified stock options subject to FIT? correct answer When the employee exercises the option An employer provided an employee with a $9,500 below-market loan. Although the current IRS rate of interest is 8%, the employee pays only 5%. Calculate the imputed interest income that must be reported as federal taxable wages on the employee's Form W-2. correct answer 0 - Loan is under $10, An employer funds its own disability plan. The employer pays a third party to administer payments to employees on a cost plus fee basis. An employee is out of work on disability for 30
