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| Section | Objectives |
|---|---|
| Topic 1: Employment Income – Regular Earnings | - Regular payroll calculations
|
| Topic 2: Payroll Accounting | - Payroll accounting practices
|
| Topic 3: Record of Employment | - ROE processing
|
| Topic 4: Year-End Processing | - Federal and provincial year-end reporting
|
| Topic 5: Termination of Employment | - Termination processing
|
| Topic 6: Provincial Remittances | - Provincial payroll requirements
|
| Topic 7: Non-Regular Payments | - Special payroll payments
|
| Topic 8: Workers’ Compensation | - Workers compensation administration
|
| Topic 9: Commission Payments | - Commission payroll processing
|
| Topic 10: Non-Statutory Deductions | - Voluntary deductions
|
| Topic 11: New Employee Information | - Employee setup and documentation
|
| Topic 12: Employment Income – Allowances, Expenses and Benefits | - Taxable and non-taxable benefits
|
| Topic 13: Federal Remittances | - Government remittance obligations
|
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NEW QUESTION # 24
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: C
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 × 20% = $2,000.00.
So the correct option is B ($2,000.00).
NEW QUESTION # 25
An employee has the use of a company-leased vehicle for both business and personal use. This is an example of:
Answer: C
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 # 26
What is piecework?
Answer: A
Explanation:
Piecework (also called piece-rate pay) is a pay method where an employee's earnings are determined by output-they are paid a set amount per unit produced or completed, rather than by hours worked or a fixed salary. This aligns directly with option C. A time-based hourly/daily wage (option A) is a different earnings method, and a fixed pay-per-period arrangement (option B) describes salary. Therefore, "all of the above" is incorrect because these are three distinct compensation structures.
In payroll calculations, piecework earnings are typically calculated as: piece rate × number of units produced in the pay period. Employers still have to ensure compliance with employment standards, such as minimum wage and overtime rules, even where piecework is used. A Canadian payroll educational reference defines piecework as payment for each unit produced "regardless of the amount of time taken."
NEW QUESTION # 27
Duncan Drapak was employed in Ontario. Upon termination of his employment, he will be paid $7,760.00 legislated wages in lieu of notice together with his final weekly pay of $875.00. Calculate Duncan's Canada Pension Plan (CPP) contribution if the yearly maximum contribution will not be exceeded.
Answer:
Explanation:
$509.78
Explanation:
Legislated wages in lieu of notice are treated as pensionable employment earnings for CPP purposes, so they are included with the employee's final regular pay when calculating CPP deductions (assuming no CPP exemption applies).
Step 1: Determine total pensionable earnings for the week:
$7,760.00 + $875.00 = $8,635.00.
Step 2: Subtract the CPP basic exemption (Year's Basic Exemption is $3,500 annually). For a weekly payroll, the basic exemption is prorated:
$3,500 ÷ 52 = $67.31.
CPP contributory earnings for the week:
$8,635.00 # $67.31 = $8,567.69.
Step 3: Apply the 2026 CPP employee contribution rate of 5.95% (base CPP). The question states the annual maximum will not be exceeded, so no capping is required in this calculation.
CPP contribution:
$8,567.69 × 5.95% = $509.7777..., rounded to $509.78.
NEW QUESTION # 28
A Third Party Demand is issued by the Canada Revenue Agency for:
Answer: D
Explanation:
A "Third Party Demand" in payroll collections commonly refers to the CRA's Demand on a Third Party (DTP)-a legal garnishment tool used to collect a person's debt to the government by requiring a third party (such as an employer or financial institution) to redirect funds that would otherwise be paid to the debtor.
CRA guidance explains that garnishments may be issued as a Requirement to Pay (RTP), Enhanced Requirement to Pay (ERTP), or Demand on a Third Party (DTP), and that these documents apply when money normally payable to someone who owes a debt to the government must instead be paid to the CRA (or other listed federal bodies).
This aligns with option B: unpaid income tax or unpaid statutory deductions (such as payroll source deductions) can lead to CRA collection action using these legal instruments.
Child support is generally enforced under provincial/territorial family support programs, not via CRA DTP as described here. Overpaid EI benefits are typically handled through EI/Service Canada recovery processes, and
"third-party creditor debt" is not a CRA-administered debt.
NEW QUESTION # 29
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