Payroll Fundamentals Flashcards

Which of the following is NOT a payroll tax deposit schedule under IRS rules?

Answer: Quarterly

The IRS deposit schedules are monthly, semiweekly, and next-day (for $100,000+ liability); quarterly is a filing schedule, not a deposit schedule.

What is the Medicare surtax rate imposed on employee wages exceeding $200,000 in a calendar year?

Answer: 0.9%

The Additional Medicare Tax is 0.9% on wages exceeding $200,000 for single filers, withheld by the employer once that threshold is crossed.

Which document establishes the legal basis for an employer to make involuntary deductions from an employee's paycheck for debt collection?

Answer: Court-issued garnishment order

A court-issued garnishment order legally requires the employer to withhold and remit a portion of the employee's wages to a creditor.

Under the CCPA, the maximum amount that can be garnished from disposable earnings for ordinary debts is:

Answer: 25% of disposable earnings or the amount by which earnings exceed 30× federal minimum wage, whichever is less

The Consumer Credit Protection Act caps ordinary garnishments at 25% of disposable earnings or the excess over 30× the federal minimum wage, whichever is lesser.

What is the purpose of Form SS-4?

Answer: To apply for an Employer Identification Number (EIN)

Form SS-4 is used by employers to apply for an EIN, which is required to file payroll tax returns and make tax deposits.

A semiweekly depositor accumulates a tax liability of $110,000 on a Wednesday. When must the deposit be made?

Answer: By the next business day

The next-day deposit rule requires any single-day tax liability of $100,000 or more to be deposited by the next banking day.

Which type of employee benefit is excluded from both federal income tax and FICA taxes?

Answer: Employer-paid health insurance premiums

Employer-paid health insurance premiums are excluded from employees' federal income tax and FICA wages under IRC Section 106.