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| Section | Objectives |
|---|---|
| Topic 1: Termination of Employment | - Termination processing
|
| Topic 2: Commission Payments | - Commission payroll processing
|
| Topic 3: Provincial Remittances | - Provincial payroll requirements
|
| Topic 4: Employment Income – Regular Earnings | - Regular payroll calculations
|
| Topic 5: New Employee Information | - Employee setup and documentation
|
| Topic 6: Federal Remittances | - Government remittance obligations
|
| Topic 7: Employment Income – Allowances, Expenses and Benefits | - Taxable and non-taxable benefits
|
| Topic 8: Non-Regular Payments | - Special payroll payments
|
| Topic 9: Payroll Accounting | - Payroll accounting practices
|
| Topic 10: Record of Employment | - ROE processing
|
| Topic 11: Workers’ Compensation | - Workers compensation administration
|
| Topic 12: Non-Statutory Deductions | - Voluntary deductions
|
| Topic 13: Year-End Processing | - Federal and provincial year-end reporting
|
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NEW QUESTION # 13
Which of the following types of earnings are not considered income from employment?
Answer: C
Explanation:
Regular salary, vacation pay, and commissions are generally treated as income from employment because they are amounts paid for services performed during employment. In contrast, what many people call
"severance pay" is often classified by the CRA as a retiring allowance-an amount paid when or after an employee retires or loses their job, in recognition of long service or for the loss of employment.
This distinction matters in payroll because a retiring allowance has its own rules for withholding and potential RRSP/RPP transfer eligibility, and it is not treated the same way as normal employment income earned while actively employed. CRA technical guidance also draws lines between amounts that are employment income versus retiring allowance depending on the nature/timing of the payment.
So, among the options listed, severance pay (when it is a retiring allowance) is the one that is not considered income from employment in the way salary/vacation pay/commissions are.
NEW QUESTION # 14
Expense reimbursements are:
Answer: A
Explanation:
An expense reimbursement is paid to repay an employee for actual business expenses the employee incurred while performing their job (for example, meals while travelling on business, supplies purchased for work, etc.). CRA's taxable benefits guidance distinguishes reimbursements from allowances: an allowance is usually a predetermined amount paid without the employee having to support the expense with receipts, while a reimbursement is tied to actual costs.
That distinction matters because reimbursements are generally not compensation for work performed (so they are not "earnings"), and they are not "benefits" in the sense of a good or service provided by the employer (though CRA notes that benefits can include reimbursements of personal expenses-so payroll must still ensure the reimbursement is for business use and properly supported).
Option A correctly describes reimbursements. Option B is typically an allowance (for example, a vehicle allowance for using personal property). Option C describes earnings (wages/salary). Option D describes benefits (value of something provided or paid for on the employee's behalf).
NEW QUESTION # 15
In Block 12 of the Record of Employment, the final pay period ending date for employees who are paid solely by commission or are paid salary plus irregularly paid commission will be:
Answer: B
Explanation:
Service Canada treats commission salespeople (paid solely by commission or salary plus irregularly paid commission) as a special ROE situation where the weekly averaging formula is used. In that scenario, the ROE Guide states that for Block 12 (Final pay period ending date) you must use the Saturday of the week that contains the last day for which paid (Block 11).
This is different from the usual rule for most employees, where Block 12 is simply the end date of the final pay period that includes the Block 11 date (and it can't be earlier than Block 11).
The key reason is consistency in applying the weekly averaging approach: even if the employer's actual payroll cycle is not weekly, commission-only/irregular-commission employees are reported using a weekly framework for ROE purposes. Payroll should therefore align Block 12 to the correct "weekly" period end (Saturday) when that rule applies, to avoid ROE errors and Service Canada follow-up.
NEW QUESTION # 16
Ursula is 17 years old, works in Quebec and earns $750.00 weekly. Ursula pays weekly union dues of $18.00 along with a special weekly union assessment of $10.00 for construction of a new union hall for its members.
Ursula also has registered pension plan (RPP) contributions of $20.00 deducted from each pay. Calculate Ursula's net federal taxable income.
Answer:
Explanation:
$712.00
Explanation:
For payroll income tax purposes, net taxable income starts with the employee's gross taxable income and then subtracts only those deductions that are deductible for income tax and can be recognized at source. CRA payroll guidance shows this approach by subtracting items such as RPP contributions and union dues when determining net taxable income for calculating income tax deductions.
Gross taxable income (weekly): $750.00.
RPP contributions are deductible (the amounts reported from box 20 of the T4 are generally deductible).
Regular union dues are deductible; however, the CRA states that deductible annual union/professional dues do not include special assessments or charges for anything other than ordinary operating costs. A levy specifically for constructing a new union hall is a special assessment, so it is not deductible as union dues.
So the deductions that reduce federal taxable income here are: $18.00 (union dues) + $20.00 (RPP) = $38.00.
Net federal taxable income = $750.00 # $38.00 = $712.00.
NEW QUESTION # 17
Dollar values attributed to something the employer has either provided to an employee or paid for on an employee's behalf are:
Answer: C
Explanation:
The CRA defines a benefit as something the employee receives when the employer pays for or gives something that is personal in nature (a good or service), either directly to the employee or through a third party. CRA's T4130 guide describes a benefit as a good or service you give (or arrange for) such as free use of employer property, and it is the value of that benefit that may need to be included in the employee's income if taxable.
This matches the wording in the question: "dollar values attributed to something the employer has either provided...or paid for...on an employee's behalf." By contrast, earnings are pay for work performed (salary, wages, commissions). Allowances are fixed amounts paid to help cover anticipated expenses without receipts (often taxable unless an exception applies). Expense reimbursements repay actual business expenses (typically supported by receipts) and are generally not treated as earnings.
So the correct classification is Benefits.
NEW QUESTION # 18
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