CERTIFIED PAYROLL PROFESSIONAL EXAM
(CPP) PART 1 ACTUAL 2026 QUESTIONS AND
VERIFIED ANSWERS
Save
Terms in this set (40)
Payroll Concept Workers Status Form SS8 is the IRS determination of EE or IC
status. Reasonal Basis Test aka Safe Harbor Rules
Sec 530-Alls ee to be treated like a IC for
specific reasons such as a court order, IRS audit
results, Attorney or CPA advisement, or long
standing industry standard for that job role.
Common Law Test- see chart for example EE is
required to comply with ER instructions about
when where and how to work. IC sets own hours
determines own sequence of work. Form W9
request from ER on IC to supply FEIN or SSN
with Company Name. Backup Withholding- Some
IC are required to withhold 24% of earnings this is
reported on Form 945. Statutory ees- not ees
under the common law test but are treated like
ees for tax purposes. Ex. Agent or commission
drivers, Full time life insurance sales people,
home workers, and traveling salespersons.
Statutory Non-EEs- Qualify as ees nder common
law test, but they are treated as IC. No taxes w/h
from pay. Ex: Real Estate agents, direct sellers.
Income must be directly related to sales, Income
reported on 1099 Box 7 Non-EE comp.
, FLSA FLSA - Sets min. wage.requires record keeping,
places restrictions on types of work minors can
do. It DOES NOT govern vacation, sick, jury duty,
holiday, lunch breaks. Freq of pay or restrictions
on hours required to work. This area is handled
by state law. Federal Min Wage = 7.25 hour. OT
HOURS-- everything over 40 hours in the work
week. Exempt ees must be paid at least $455 a
week salary or fee basis. Primary duties must
consist of performing non manual or office work
related to the general business operations. OR
Permiting work that is directly related to
academic instruction. Tips- 2.13/HR hourly rate
and tips must meet min wage requirement in
fed/state. Must also receive $30 in tips per
month. TIP CREDIT- 5.12 allowed credit by the
employer when tips are at least 5.12/hr. REG RATE
OF PAY- calculation is Reg rate of pay=total reg
pay divided by # of hours worked. Fluctuating
Work Week- Change of schedule based on
business need. ok as long as ees are paid for OT.
Fixed wkly salary is high enough that they dont
fall below min wage. Comp Time Private Sector-
Allowed as long as the time off is in the same pay
period. 11/2 hours given for ever hour of OT
worked. State and/or Gov workers can have the
comp time rather than OT pay if; the EE agreees
to it, ees are given reasonable time to use it, Can
accumulate 240 hours of comp time OR 160
hours of OT. Above must be paid. As for public
safety ees, they can have a max comp time of 480
and 320 OT hrs comp. CHANGING WORK WEEK-
Is whn the workweek changes from M-SUN to
SUN-SAT. OT is paid on the greater of the 2.
WHITE COLLAR are: administrative, executives,
professionals, learned professionals, creative
professionals, computer professionals, outside
sales. WORK WEEK- determines the 7
consecutive 24 hour period and when OT is
(CPP) PART 1 ACTUAL 2026 QUESTIONS AND
VERIFIED ANSWERS
Save
Terms in this set (40)
Payroll Concept Workers Status Form SS8 is the IRS determination of EE or IC
status. Reasonal Basis Test aka Safe Harbor Rules
Sec 530-Alls ee to be treated like a IC for
specific reasons such as a court order, IRS audit
results, Attorney or CPA advisement, or long
standing industry standard for that job role.
Common Law Test- see chart for example EE is
required to comply with ER instructions about
when where and how to work. IC sets own hours
determines own sequence of work. Form W9
request from ER on IC to supply FEIN or SSN
with Company Name. Backup Withholding- Some
IC are required to withhold 24% of earnings this is
reported on Form 945. Statutory ees- not ees
under the common law test but are treated like
ees for tax purposes. Ex. Agent or commission
drivers, Full time life insurance sales people,
home workers, and traveling salespersons.
Statutory Non-EEs- Qualify as ees nder common
law test, but they are treated as IC. No taxes w/h
from pay. Ex: Real Estate agents, direct sellers.
Income must be directly related to sales, Income
reported on 1099 Box 7 Non-EE comp.
, FLSA FLSA - Sets min. wage.requires record keeping,
places restrictions on types of work minors can
do. It DOES NOT govern vacation, sick, jury duty,
holiday, lunch breaks. Freq of pay or restrictions
on hours required to work. This area is handled
by state law. Federal Min Wage = 7.25 hour. OT
HOURS-- everything over 40 hours in the work
week. Exempt ees must be paid at least $455 a
week salary or fee basis. Primary duties must
consist of performing non manual or office work
related to the general business operations. OR
Permiting work that is directly related to
academic instruction. Tips- 2.13/HR hourly rate
and tips must meet min wage requirement in
fed/state. Must also receive $30 in tips per
month. TIP CREDIT- 5.12 allowed credit by the
employer when tips are at least 5.12/hr. REG RATE
OF PAY- calculation is Reg rate of pay=total reg
pay divided by # of hours worked. Fluctuating
Work Week- Change of schedule based on
business need. ok as long as ees are paid for OT.
Fixed wkly salary is high enough that they dont
fall below min wage. Comp Time Private Sector-
Allowed as long as the time off is in the same pay
period. 11/2 hours given for ever hour of OT
worked. State and/or Gov workers can have the
comp time rather than OT pay if; the EE agreees
to it, ees are given reasonable time to use it, Can
accumulate 240 hours of comp time OR 160
hours of OT. Above must be paid. As for public
safety ees, they can have a max comp time of 480
and 320 OT hrs comp. CHANGING WORK WEEK-
Is whn the workweek changes from M-SUN to
SUN-SAT. OT is paid on the greater of the 2.
WHITE COLLAR are: administrative, executives,
professionals, learned professionals, creative
professionals, computer professionals, outside
sales. WORK WEEK- determines the 7
consecutive 24 hour period and when OT is
