PAYROLL FUNDAMENTALS LATEST 2026
COMPREHENSIVE EXAM QUESTIONS AND SOLUTIONS
RATED A+
✔✔Renumeration (ch.2) - ✔✔Employee received compensation or pay for the services
they perform
-AKA employee income when employer-employee relationship exists
✔✔Employee income can be categorized into what? (ch.2) - ✔✔-Earnings
-Allowances
-Benefits
-Taxable expense reimbursements
✔✔Earnings can be paid as... (ch.2) - ✔✔-Salary
-Rate for each hour worked
-Rate per piece of goods produced or picked
-Disability payment for time off due to illness
-Payment for vacation time
-Premium payment for overtime
-Premium payment for hours worked on a shift
✔✔Earnings are... (ch.2) - ✔✔-Pensionable
-Insurable
-Taxable
...therefore subject to all statutory deductions
✔✔Define allowances (ch.2) - ✔✔The additional dollar amounts paid to employees for
the use, or anticipated use of their personal property for business purposes
✔✔What are the common types of allowances? (ch.2) - ✔✔-Car
-Meals
-Uniforms
-Safety shoes or other types of clothing
✔✔Allowances are... (ch.2) - ✔✔-Not considered income (under certain conditions)
...therefore not subject to statutory withholdings
✔✔Define benefits (ch.2) - ✔✔Dollar values attributed to something the employer has
either provided to an employee or paid for on behalf of the employee
✔✔Benefits are... (ch.2) - ✔✔-Not included in income (under certain circumstances)
...therefore not subject to statutory dedcuctions
, ✔✔Define expense reimbursements (ch.2) - ✔✔Dollar amounts paid to employees to
cover expenses that they incur while performing their job
✔✔Expense reimbursements are.. (ch.2) - ✔✔-Usually submitted through the
accounting department
...therefore not considered in the calculation of employee income
-Can go through payroll, in which case they are not subject to statutory deductions, but
WILL affect net pay
✔✔If a reimbursement is for personal living expenses it is... (ch.2) - ✔✔-Taxable to the
employee
-Included in income
-Subject to statutory deductions
✔✔What are the factors that affect selecting frequency of pay periods (ch.2) - ✔✔-
Accounting cycles
-Payment delays
-Pay period frequencies that have been negotiated
✔✔Define regular earnings (ch.2) - ✔✔The dollar amount paid to employees on a pay
period basis for the performance of their day-to-day duties
✔✔List the types of regular earnings (ch.2) - ✔✔-Salary
-Hourly wages
-Piecework
-Self-insured disability payments
-Vacation pay
-Overtime
-Shift premiums
✔✔Define salary, and what is the formula for calculating it? (ch.2) - ✔✔-A fixed amount
of earnings paid to an employee per pay period
Annual salary
-------------------
Number of pays
✔✔Hourly rate equation (ch.2) - ✔✔Salary per pay period
------------------------------------
Pay period normal working hours
Annual salary
--------------------------------
Annual normal working hours
COMPREHENSIVE EXAM QUESTIONS AND SOLUTIONS
RATED A+
✔✔Renumeration (ch.2) - ✔✔Employee received compensation or pay for the services
they perform
-AKA employee income when employer-employee relationship exists
✔✔Employee income can be categorized into what? (ch.2) - ✔✔-Earnings
-Allowances
-Benefits
-Taxable expense reimbursements
✔✔Earnings can be paid as... (ch.2) - ✔✔-Salary
-Rate for each hour worked
-Rate per piece of goods produced or picked
-Disability payment for time off due to illness
-Payment for vacation time
-Premium payment for overtime
-Premium payment for hours worked on a shift
✔✔Earnings are... (ch.2) - ✔✔-Pensionable
-Insurable
-Taxable
...therefore subject to all statutory deductions
✔✔Define allowances (ch.2) - ✔✔The additional dollar amounts paid to employees for
the use, or anticipated use of their personal property for business purposes
✔✔What are the common types of allowances? (ch.2) - ✔✔-Car
-Meals
-Uniforms
-Safety shoes or other types of clothing
✔✔Allowances are... (ch.2) - ✔✔-Not considered income (under certain conditions)
...therefore not subject to statutory withholdings
✔✔Define benefits (ch.2) - ✔✔Dollar values attributed to something the employer has
either provided to an employee or paid for on behalf of the employee
✔✔Benefits are... (ch.2) - ✔✔-Not included in income (under certain circumstances)
...therefore not subject to statutory dedcuctions
, ✔✔Define expense reimbursements (ch.2) - ✔✔Dollar amounts paid to employees to
cover expenses that they incur while performing their job
✔✔Expense reimbursements are.. (ch.2) - ✔✔-Usually submitted through the
accounting department
...therefore not considered in the calculation of employee income
-Can go through payroll, in which case they are not subject to statutory deductions, but
WILL affect net pay
✔✔If a reimbursement is for personal living expenses it is... (ch.2) - ✔✔-Taxable to the
employee
-Included in income
-Subject to statutory deductions
✔✔What are the factors that affect selecting frequency of pay periods (ch.2) - ✔✔-
Accounting cycles
-Payment delays
-Pay period frequencies that have been negotiated
✔✔Define regular earnings (ch.2) - ✔✔The dollar amount paid to employees on a pay
period basis for the performance of their day-to-day duties
✔✔List the types of regular earnings (ch.2) - ✔✔-Salary
-Hourly wages
-Piecework
-Self-insured disability payments
-Vacation pay
-Overtime
-Shift premiums
✔✔Define salary, and what is the formula for calculating it? (ch.2) - ✔✔-A fixed amount
of earnings paid to an employee per pay period
Annual salary
-------------------
Number of pays
✔✔Hourly rate equation (ch.2) - ✔✔Salary per pay period
------------------------------------
Pay period normal working hours
Annual salary
--------------------------------
Annual normal working hours
