#1
Which of the following is considered a mandatory deduction from an employee's paycheck in the United States?
Federal income tax
ExplanationMandatory tax deducted by employers from employees' paychecks for federal income tax purposes.
#2
What is the purpose of a W-4 form in the context of payroll?
To declare withholding allowances
ExplanationUsed by employees to declare their withholding allowances for federal income tax withholding purposes.
#3
What is the purpose of gross pay in the context of payroll?
The total amount of money earned before deductions
ExplanationTotal earnings of an employee before any deductions such as taxes or benefits.
#4
Which of the following is typically considered a variable cost in employee compensation?
Employee training expenses
ExplanationCosts associated with training employees, which can vary based on the organization's needs.
#5
Which of the following payroll taxes is typically solely the responsibility of the employer to pay?
Social Security tax
ExplanationTax that employers are responsible for paying to fund Social Security benefits for employees.
#6
What is the purpose of a Form W-4 in the United States?
To declare withholding allowances
ExplanationCompleted by employees to inform employers of the amount of federal income tax to withhold from their paychecks.
#7
Under the Fair Labor Standards Act (FLSA) in the United States, what is the federal minimum wage as of 2022?
$7.25 per hour
ExplanationThe minimum wage set by the FLSA, applicable to covered nonexempt employees.
#8
What is the purpose of the FICA tax in the United States?
To fund Social Security and Medicare programs
ExplanationTax levied to fund Social Security and Medicare programs for employees and employers.
#9
What does the term 'payroll tax' refer to?
Taxes paid by employers based on employee wages
ExplanationTaxes imposed on employers based on the wages they pay to employees.
#10
What is the purpose of a Form W-2 in the United States?
To report wages and taxes withheld for an employee
ExplanationUsed by employers to report wages and taxes withheld for each employee to the IRS.
#11
Under the Fair Labor Standards Act (FLSA) in the United States, what is the maximum number of hours an employee can work in a standard workweek before overtime pay is required?
40 hours
ExplanationUnder FLSA, non-exempt employees are entitled to overtime pay for hours worked beyond 40 in a workweek.
#12
What is the purpose of the Form 1099-MISC in the United States?
To report self-employment income
ExplanationUsed to report miscellaneous income, including self-employment income, to the IRS.
#13
Which of the following is an example of a fringe benefit provided by employers?
Paid time off (PTO)
ExplanationAdditional compensation provided by employers beyond salary, such as paid time off.
#14
What is the primary difference between exempt and non-exempt employees under the Fair Labor Standards Act (FLSA) in the United States?
Exempt employees are not entitled to overtime pay, while non-exempt employees are.
ExplanationExempt employees are not eligible for overtime pay, while non-exempt employees are entitled to it.
#15
Which of the following compensation components is typically exempt from federal income tax withholding?
Employee contributions to a retirement plan
ExplanationContributions made by employees to retirement plans are often not subject to federal income tax withholding.
#16
Which of the following laws requires employers to provide a safe workplace for employees?
Occupational Safety and Health Act (OSHA)
ExplanationLegislation that mandates employers to ensure safe and healthful working conditions for employees.
#17
What is the purpose of the Federal Unemployment Tax Act (FUTA) in the United States?
To provide unemployment benefits
ExplanationTax levied on employers to fund unemployment benefits for workers who have lost their jobs.