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| Section | Objectives |
|---|---|
| Commission Payments | - Commission payroll processing
|
| Federal Remittances | - Government remittance obligations
|
| Payroll Accounting | - Payroll accounting practices
|
| Provincial Remittances | - Provincial payroll requirements
|
| Employment Income โ Allowances, Expenses and Benefits | - Taxable and non-taxable benefits
|
| New Employee Information | - Employee setup and documentation
|
| Employment Income โ Regular Earnings | - Regular payroll calculations
|
| Non-Statutory Deductions | - Voluntary deductions
|
| Termination of Employment | - Termination processing
|
| Year-End Processing | - Federal and provincial year-end reporting
|
| Record of Employment | - ROE processing
|
| Workersโ Compensation | - Workers compensation administration
|
| Non-Regular Payments | - Special payroll payments
|
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NEW QUESTION # 20
The capital cost of an employer-owned vehicle includes:
Answer: A
Explanation:
For CRA automobile benefit purposes (standby charge on an employer-owned automobile), the "cost" used is the capital cost, which includes more than just the sticker price. CRA guidance states the cost includes the trade-in amount (if applicable), additions, and GST/HST and PST as part of the cost base used in the standby charge calculation.
Option D is the best match because it includes vehicle options/accessories, sales taxes, and additions that add to depreciation value. Importantly, CRA also notes that certain specialized equipment added to meet the requirements of a disabled person or employment (examples include heavy-duty suspension and power winches) is not considered part of the automobile's cost for standby charge purposes. This directly rules out options A and C, since they treat specialized equipment as part of capital cost. Option B is incorrect because CRA includes sales taxes (GST/HST and PST) in the cost base.
NEW QUESTION # 21
Paula is granted a pay increase. The paperwork informing the payroll department of the pay increase is two pay periods late. What method would be used to calculate income taxes on the separate retroactive payment?
Answer: B
Explanation:
A payment made to "catch up" wages because a pay increase was processed late is a retroactive payment. The CRA provides different income tax calculation approaches depending on the payment type and specifically lists "Retroactive payments" as its own category, separate from regular tax-table calculations, lump-sum, and bonus/irregular methods.
For bonuses and retroactive pay increases, the CRA also points employers to the Payroll Deductions Online Calculator (PDOC) to calculate CPP, EI, and income tax correctly, which aligns with using the appropriate CRA method for retroactive amounts.
Because this situation is explicitly a retroactive adjustment (two pay periods late), the correct choice is the Retroactive tax method (option C), not the bonus/irregular method, not the lump-sum method, and not the regular tax tables.
NEW QUESTION # 22
Dollar amounts that are paid to an employee to cover expenses that they incurred while performing their job, but are not considered in the calculation of an employee's earnings are:
Answer: B
Explanation:
An expense reimbursement is a repayment to an employee for business costs they already paid personally (for example, meals, mileage, supplies), typically supported by receipts or an expense report. CRA's guidance explains that a reimbursement is a payment made to repay amounts the employee spent while conducting the employer's business, and that a reasonable reimbursement is generally not included in the employee's income.
That's why reimbursements are generally not part of "earnings" for payroll calculations-they are not compensation for work performed; they are repayment of a business expense. This differs from an allowance, which is usually a fixed amount paid without requiring receipts; allowances are often taxable unless a specific CRA exception applies.
So the correct term for "dollar amounts paid to cover job expenses incurred, but not considered earnings" is expense reimbursements (option D). Payroll best practice is to ensure reimbursements are properly documented and reasonable to support non-taxable treatment.
NEW QUESTION # 23
Tanya submitted a letter of resignation to her employer on April 2 of the current year advising that she would be resigning her position effective April 27 for the pay period ending April 28. What date will appear in Block
11 of Tanya's Record of Employment?
Answer: B
Explanation:
Block 11 on the ROE is "Last day for which paid." Service Canada instructs employers to enter the last day for which the employee received insurable earnings. This date usually coincides with the last day of work, unless the employee continues to receive insurable earnings after the last day worked (for example, paid leave like vacation/sick leave or salary continuance).
In Tanya's case, she gave notice on April 2, but her resignation is effective April 27. There's no information indicating paid leave after April 27 or salary continuance. So Block 11 should be April 27 (the last day she worked/received insurable earnings).
The question also mentions the pay period ending April 28-that date belongs in Block 12 (Final pay period ending date), which is the end date of the final pay period that includes the Block 11 date, and is often different from Block 11.
NEW QUESTION # 24
An interruption of earnings occurs when there is a period of how many days with no insurable earnings?
Answer: D
Explanation:
Service Canada's ROE Guide defines an interruption of earnings under the "7-day rule." It occurs when an employee has had, or is expected to have, 7 consecutive calendar days with no work and no insurable earnings from the employer.
This is specifically calendar days, not business days. That means weekends and holidays count in the seven- day sequence. The rule commonly applies when employees quit, are laid off, or are terminated, and it helps determine when an employer must issue an ROE (subject to certain listed exceptions and special situations, such as some employees with non-standard work patterns or employees mainly paid by commission).
From a payroll operations standpoint, correctly identifying the interruption of earnings is critical because it triggers ROE deadlines and affects the employee's ability to access EI benefits without delay. So the correct answer is Seven calendar days (option D).
NEW QUESTION # 25
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