CERTIFIED PAYROLL PROFESSIONAL (CPP) FINAL EXAM
AND PRACTICE QUESTIONS EXAM COMPLETE QUESTIONS
WITH DETAILED VERIFIED ANSWERS (100% CORRECT
ANSWERS) /ALREADY GRADED A+
Terms in this set (100)
Employer Control: The more control, the more likely an employee.
-Who does it?
-What is done?
What is Common Law Test?
-How does it get done?
-When does it get done?
-Who furnishes tools, supplies, work location?
-Who sets salary rate?
1. Behavioral Control- Right to direct and control the details
and means by which the worker will perform the tasks.
A. Level of Instruction
B. Level of Training
List the factors used under the
2. Financial Control- Dictates the payment
Common Law Test in
A. Hourly rate- Most likely employee
determining whether a business
B. Paid by the project- could be an independent contractor.
has the right to control the
C. Who abosorbs most of the costs/takes most risks?
financial aspects of a workers 3. Type of Relationship- Written agreements/contracts stating
activities. the worker is an independent contractor does not make it
so...
What are the two categories for 1. Real Estate Agents
Statutory Nonemployees? 2. Direct Sellers
, 1. Agent/commission drivers
2. Full
Time Life Insurance Agents
*exempt from FUTA ONLY if all earnings are from commissions
3. Homemakers
What are the 4 categories of
*Works away from ERs location
Statutory Employees?
-Assembles items at home
-Stuffs evelopes at home
-Type transcripts at home
4. Traveling/City
Salespersons
Even though a worker meets the definition of an employee under
What is Reasonable Basis Test? the common law test, an employer may treat a worker as an
independent contractor exempt from federal payroll tax laws
if it has a reasonble basis.
1. Court decisions, published IRS rulings, IRS technical
advice or a private letter ruling from the IRS or,
List the factors for the 2. A past IRS audit of the employer or,
Reasonable Basis Test. 3. A longstanding, recognized practice in the employers industry
that treats workers in similar situations as independent
contractors.
Temp workers are hired, screened and trained by the temp
What is a temporary help agency help agency to provide services for clients. They are employees
employee? of the temp agency which sets their wages and has sole right
to hire and fire. The agency is alsor responsible for all
payroll taxes.
Leased employees are hired, trained, and qualified by a leasing company
which
What is a leased employee? provides workers for a client company. The client pays a fee to
the leasing company to cover the cost of payroll, benefits, etc...
Responsibility for payroll taxes depends on the degree of
control exercised by the client over the employees work and
which entity has control over the payment of their wages.
When leasing an employee or Employers should make sure they are dealing with a financially
using a temp agency, what secure and reputable company before entering into a contract,
should you know about the since the temp agency or leasing
overall company that you are company's financial failure could lead to the client company
, dealing with to avoid having to becoming liable for any withholding or employement taxes that
pay any withholding or remain unpaid.
employment taxes?
1. (Absence Control): Free from control via agreement and in reality.
2. (Business- unusual and/or away): performed outside the
What are the three parts of the
usual course of company business or away from employers
ABC test?
facility
3. (Customarily independent contractor): independent trade, occupation or
business
While many states use the Common Law Test to determine an
employee relationship, more than half use the ABC Test. ABC
What is the ABC test used to
determine? test is used by many states to determine a worker's
employement status under state unemployment insurance laws
to see if the employee is indeed an independent contractor.
It is used to verify that an individual has the legal right to work in the US.
What is Form I-9 used for? The
Immigration Reform and Control Act of 1986 makes it illegal
for an employer to hire an unauthorized worker.
Although the client company may have the right to hire and
When a client company hires leased
fire the workers, set wage levels and supervise their work, the
employees, who is responsible
workers are generally employees of the leasing company,
for
which is responsible for withholding FIT, FICA, as well as
withholding and/or paying the
paying the employers share of FICA and FUTA taxes because
FIT, SS, Med and FUTA taxes?
of the leasing companys
control over the payment of wages.
AND PRACTICE QUESTIONS EXAM COMPLETE QUESTIONS
WITH DETAILED VERIFIED ANSWERS (100% CORRECT
ANSWERS) /ALREADY GRADED A+
Terms in this set (100)
Employer Control: The more control, the more likely an employee.
-Who does it?
-What is done?
What is Common Law Test?
-How does it get done?
-When does it get done?
-Who furnishes tools, supplies, work location?
-Who sets salary rate?
1. Behavioral Control- Right to direct and control the details
and means by which the worker will perform the tasks.
A. Level of Instruction
B. Level of Training
List the factors used under the
2. Financial Control- Dictates the payment
Common Law Test in
A. Hourly rate- Most likely employee
determining whether a business
B. Paid by the project- could be an independent contractor.
has the right to control the
C. Who abosorbs most of the costs/takes most risks?
financial aspects of a workers 3. Type of Relationship- Written agreements/contracts stating
activities. the worker is an independent contractor does not make it
so...
What are the two categories for 1. Real Estate Agents
Statutory Nonemployees? 2. Direct Sellers
, 1. Agent/commission drivers
2. Full
Time Life Insurance Agents
*exempt from FUTA ONLY if all earnings are from commissions
3. Homemakers
What are the 4 categories of
*Works away from ERs location
Statutory Employees?
-Assembles items at home
-Stuffs evelopes at home
-Type transcripts at home
4. Traveling/City
Salespersons
Even though a worker meets the definition of an employee under
What is Reasonable Basis Test? the common law test, an employer may treat a worker as an
independent contractor exempt from federal payroll tax laws
if it has a reasonble basis.
1. Court decisions, published IRS rulings, IRS technical
advice or a private letter ruling from the IRS or,
List the factors for the 2. A past IRS audit of the employer or,
Reasonable Basis Test. 3. A longstanding, recognized practice in the employers industry
that treats workers in similar situations as independent
contractors.
Temp workers are hired, screened and trained by the temp
What is a temporary help agency help agency to provide services for clients. They are employees
employee? of the temp agency which sets their wages and has sole right
to hire and fire. The agency is alsor responsible for all
payroll taxes.
Leased employees are hired, trained, and qualified by a leasing company
which
What is a leased employee? provides workers for a client company. The client pays a fee to
the leasing company to cover the cost of payroll, benefits, etc...
Responsibility for payroll taxes depends on the degree of
control exercised by the client over the employees work and
which entity has control over the payment of their wages.
When leasing an employee or Employers should make sure they are dealing with a financially
using a temp agency, what secure and reputable company before entering into a contract,
should you know about the since the temp agency or leasing
overall company that you are company's financial failure could lead to the client company
, dealing with to avoid having to becoming liable for any withholding or employement taxes that
pay any withholding or remain unpaid.
employment taxes?
1. (Absence Control): Free from control via agreement and in reality.
2. (Business- unusual and/or away): performed outside the
What are the three parts of the
usual course of company business or away from employers
ABC test?
facility
3. (Customarily independent contractor): independent trade, occupation or
business
While many states use the Common Law Test to determine an
employee relationship, more than half use the ABC Test. ABC
What is the ABC test used to
determine? test is used by many states to determine a worker's
employement status under state unemployment insurance laws
to see if the employee is indeed an independent contractor.
It is used to verify that an individual has the legal right to work in the US.
What is Form I-9 used for? The
Immigration Reform and Control Act of 1986 makes it illegal
for an employer to hire an unauthorized worker.
Although the client company may have the right to hire and
When a client company hires leased
fire the workers, set wage levels and supervise their work, the
employees, who is responsible
workers are generally employees of the leasing company,
for
which is responsible for withholding FIT, FICA, as well as
withholding and/or paying the
paying the employers share of FICA and FUTA taxes because
FIT, SS, Med and FUTA taxes?
of the leasing companys
control over the payment of wages.
