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CPP Payroll Systems & Processes Flashcards

6 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CPP Payroll Systems & Processes flashcards as text

  1. Under the Consumer Credit Protection Act (CCPA), the maximum amount of disposable earnings subject to garnishment for a standard debt is:

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

    The CCPA limits creditor garnishments to 25% of disposable earnings or the amount exceeding 30× the federal minimum wage per week, whichever is smaller.

  2. Child support garnishment orders take priority over other types of garnishments because:

    Answer: Federal law explicitly grants child support and alimony orders priority over most other garnishments

    Federal law under the CCPA specifically gives child support and alimony withholding orders priority over other creditor garnishments.

  3. A Section 125 cafeteria plan allows employees to:

    Answer: Pay for eligible benefits with pre-tax dollars, reducing their taxable income

    A Section 125 cafeteria plan lets employees choose and pay for qualifying benefits with pre-tax dollars, lowering their federal income tax, Social Security, and Medicare tax obligations.

  4. A traditional 401(k) employee contribution reduces which payroll taxes?

    Answer: Federal income tax withholding only — Social Security and Medicare are still calculated on gross wages

    Traditional 401(k) deferrals reduce federal (and usually state) income tax withholding but remain subject to Social Security and Medicare taxes.

  5. An IRS wage levy differs from a creditor garnishment primarily because:

    Answer: A levy is a government seizure to satisfy delinquent taxes and does not require a court order

    An IRS levy is a statutory government seizure requiring no court order, while a garnishment is typically a court-ordered creditor remedy.

  6. When an employer receives multiple garnishment orders simultaneously, the payroll professional should:

    Answer: Follow federal and state priority rules to determine the order and amounts of each withholding

    Federal and state priority rules govern which garnishments are paid first and how CCPA limits apply across multiple concurrent orders.