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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Termination and Special Payments | 30% | - Leaves and absences
|
| Topic 2: Individual Pay Calculations | 40% | - Non-regular earnings
|
| Topic 3: Communication and Compliance | 10% | - Accuracy and documentation
|
| Topic 4: Record of Employment (ROE) | 20% | - Submission and deadlines
|
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NEW QUESTION # 37
An employee has the use of a company-leased vehicle for both business and personal use. This is an example of:
Answer: A
Explanation:
This is a benefit because the employer is providing access to an automobile (leased by the employer) that the employee can use for personal driving as well as business. The CRA explains that when an employer-owned or employer-leased automobile is made available for personal use, the employee receives a taxable automobile benefit, generally made up of a standby charge (availability of the vehicle) and potentially an operating expense benefit (if the employer pays operating costs and the employee has personal kilometres).
It is not an allowance (which is typically a cash amount given to the employee), and it is not an expense reimbursement (repayment of employee-incurred business expenses). It is also not an earning (pay for work performed). Payroll's role is to track availability days/months, business vs personal kilometres, any employee reimbursements, apply the CRA calculation methods, and report the taxable benefit on the employee's information slip with the correct taxable benefit treatment.
NEW QUESTION # 38
Which of the following deductions would be the last payroll withholding in order of priority?
Answer: D
Explanation:
In payroll, deductions are applied in a priority order so employers satisfy mandatory legal obligations first.
CRA collection tools such as a Requirement to Pay (RTP) and a Demand on a Third Party (DTP) are legal
/garnishment-type deductions. CRA explains that a Requirement to Pay directs a third party (often the employer) to send amounts otherwise payable to the employee to the CRA, and the employer must comply.
Company pension contributions (where participation is required as a condition of employment or under a plan
/collective agreement) are generally company-compulsory deductions-important, but they come after statutory and legal deductions. Voluntary insurance coverage is a classic voluntary deduction (the employee chooses it; it is not legally required). Voluntary deductions are normally taken last because they must not interfere with statutory/legal withholding obligations.
So among the options, voluntary insurance coverage is the one that would be withheld last in the order of priority.
NEW QUESTION # 39
A death benefit is a:
Answer: D
Explanation:
The CRA defines a death benefit as the gross amount of any payment made on or after the death of an employee to recognize the employee's service in an office or employment. It can be paid to a surviving spouse
/common-law partner, heir, or the estate.
This is different from amounts the employee already earned before death (for example, regular wages up to the date of death, or vacation pay that was accrued/earned). CRA guidance treats wages and employment income earned up to and including the date of death as amounts to be reported on a T4 slip, not as a death benefit.
It's also different from a life insurance payout from an insurer (which is not an employer-paid "death benefit" for payroll reporting purposes). The payroll impact is that a qualifying death benefit is generally reported as a special payment (often on a T4A), following CRA rules for deductions and reporting of death benefits.
NEW QUESTION # 40
Anthony earns $750.00 per week. He has a cash taxable benefit of $25.00 per week. Anthony is exempt from CPP contributions. Calculate the net taxable income for the week.
Answer:
Explanation:
$775.00
Explanation:
"Net taxable income" for payroll withholding purposes is the amount of income on which income tax is calculated for the pay period. It generally starts with the employee's gross taxable earnings for the period (regular wages plus any taxable benefits/allowances that must be included in income), then subtracts only those deductions that are deductible for tax at source (for example, certain registered pension plan contributions, union dues, etc., if applicable). A cash taxable benefit is treated like additional remuneration and is included in taxable income. (canada.ca) Here, Anthony's weekly taxable earnings are:
$750.00 wages + $25.00 cash taxable benefit = $775.00.
Being exempt from CPP contributions affects whether CPP is deducted, but CPP is not a "net taxable income" subtraction in this question (and in any case, no CPP is being deducted). The question also does not mention any other tax-deductible payroll deductions (like RPP contributions), so there is nothing to subtract from taxable earnings.
Therefore, Anthony's net taxable income for the week is $775.00.
NEW QUESTION # 41
Which of the following company-compulsory deductions would reduce the employee's gross taxable income for purposes of withholding income taxes?
Answer: A
Explanation:
For payroll withholding, income tax is calculated on taxable income for the pay period, so only deductions that are income-tax deductible (or otherwise reduce taxable income at source) will reduce the employee's taxable base for withholding. Employee contributions to an RRSP are generally deductible for the employee, which is why payroll-deducted RRSP contributions (such as contributions to a group RRSP taken off the paycheque) reduce the amount of income tax withheld when the payroll system is set up to treat them as deductible contributions. The CRA confirms that deductible RRSP contributions can be used to reduce your tax.
By contrast, paying provincial health care premiums (where applicable) and paying an employee share of group benefit plan premiums are not automatic "reduce taxable income at source" deductions in the same way for payroll withholding; they may be personal expenses and, depending on the plan/premium type, may only affect the employee's personal tax situation through credits/deductions when filing, not the standard payroll withholding base. Therefore, the only correct choice is A.
NEW QUESTION # 42
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