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The Payroll Fundamentals 1Exam (PF1) study material of Actualtests4sure is available in three different and easy-to-access formats. The first one is printable and portable Payroll Fundamentals 1Exam (PF1) PDF format. With the PDF version, you can access the collection of actual National Payroll Institute PF1 Questions with your smart devices like smartphones, tablets, and laptops.
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Record of Employment (ROE) | 20% | - Submission and deadlines
|
| Topic 2: Communication and Compliance | 10% | - Accuracy and documentation
|
| Topic 3: Termination and Special Payments | 30% | - Leaves and absences
|
| Topic 4: Individual Pay Calculations | 40% | - Regular earnings
|
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NEW QUESTION # 31
Paul Westin works for an Alberta organization and receives a regular salary of $1,800.00 semi-monthly. He will be receiving a payout of accrued vacation with no time taken of $1,400.00 on a separate cheque. He has federal and provincial TD1s on file with claim code 1. Calculate the income taxes to be withheld on his vacation pay.
Answer:
Explanation:
341.50
Explanation:
CRA's method for bonus/irregular payments paid separately is to calculate income tax on the combined pay (regular pay + the irregular payment) using the regular tax tables, then subtract the tax that would apply to the regular pay alone. The difference is the income tax to withhold from the irregular payment.
Here, the semi-monthly taxable pay is:
Regular pay = $1,800.00
Regular + vacation payout = $3,200.00
Using the 2026 Alberta semi-monthly (24 pay periods) tax tables with claim code 1:
At $1,800, Federal tax = $130.45 and Alberta tax = $58.55 # Total = $189.00.
At $3,200, Federal tax = $356.50 and Alberta tax = $174.00 # Total = $530.50.
Income tax on the vacation payout = $530.50 # $189.00 = $341.50.
CPP (including the enhanced portion) is a separate statutory deduction that must also be calculated on the payout, but this question asked specifically for income tax withholding.
NEW QUESTION # 32
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 # 33
An employee in Ontario was paid a $25,000.00 retiring allowance. The eligible portion was $15,000.00 and was transferred to the employee's Registered Retirement Savings Plan (RRSP) by the employer. Calculate the income tax on the non-eligible portion.
Answer: D
Explanation:
A retiring allowance is treated as a lump-sum payment for payroll withholding purposes. When part of a retiring allowance is transferred directly to an RRSP/RPP, CRA guidance indicates you do not withhold income tax on the transferred amount (up to the employee's available limit), because it is not paid to the employee in cash.
Step 1: Determine the portion paid directly to the employee (non-eligible portion):
$25,000 # $15,000 transferred to RRSP = $10,000 paid/remaining.
Step 2: Apply CRA lump-sum withholding rates (outside Quebec):
For total lump-sum payments $5,001 to $15,000, the withholding rate is 20%.
Step 3: Calculate tax to withhold on $10,000:
$10,000 ร 20% = $2,000.00.
So the correct option is B ($2,000.00).
NEW QUESTION # 34
The Canada Revenue Agency form that is completed to allow a commissioned employee to claim non- reimbursed expenses at source is a:
Answer: A
Explanation:
The CRA form used to adjust payroll income tax withholdings at source for employees who earn commission income and have commission expenses is Form TD1X - Statement of Commission Income and Expenses for Payroll Tax Deductions. The CRA explains that an employee completes TD1X if they receive commission income (or salary plus commission) and want the employer to adjust tax deductions to take commission expenses into account.
This is different from:
TD1, which is the Personal Tax Credits Return used to claim basic/personal credits and determine standard withholding (not commission-expense adjustments).
T777, which is used to claim employment expenses on the employee's personal tax return (not to reduce payroll withholding at source).
TP-1015.R.13.1-V, which is a Quebec form used to request a reduction of Quebec income tax withholding in specific situations (not the CRA commission-expense at-source form).
Operationally, payroll should keep the TD1X on file and apply it to income tax withholding calculations until the employee updates or replaces it.
NEW QUESTION # 35
Rosa joined Avion Electronics in April 1983. Her employment was terminated on November 30, 2015 and she was paid a $62,500.00 retiring allowance. Rosa joined her company's pension plan in 1986 and was fully vested on termination of employment. Calculate the non-eligible portion of the retiring allowance.
Answer:
Explanation:
$32,000.00 non-eligible portion
Explanation:
CRA requires separating a retiring allowance into an eligible and non-eligible portion. The eligible portion is the maximum that can be transferred to an RRSP/RPP under the special rules (without using regular RRSP room). The formula is: $2,000 for each year (or part-year) of service before 1996, plus an additional $1,500 for each year (or part-year) before 1989 in which the employee had no employer pension/DPSP benefit vested at the time of payment (or previously paid).
Rosa worked from 1983 to 1995 (inclusive) for pre-1996 service: 13 years ร $2,000 = $26,000.
For the extra pre-1989 amount: she joined the pension plan in 1986 and was fully vested when paid the retiring allowance in 2015, so 1986-1988 do not qualify for the extra $1,500. However, 1983-1985 were years before 1989 when she had no vested employer pension benefit, so 3 years ร $1,500 = $4,500.
Eligible portion = $26,000 + $4,500 = $30,500.
Non-eligible portion = $62,500 # $30,500 = $32,000.
NEW QUESTION # 36
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