White Paper:
Training the Payroll Staff—Part 3:
The Tax Test
White Paper: Training the Payroll Staff Part 3: Testing ©2016 The Payroll Advisor
As I said in part 1 and 2 of the white papers on this subject, there is more to running a payroll department
than just producing X number of payroll checks every X number of weeks and passing them out. Payroll
must also comply with every federal, state and local wage and hour or tax
law that applies to it specifically. And how does a payroll department,
whether it is a party of one or twenty, ensure that it is in compliance with
this myriad of laws and regulations? The answer is, as always, extremely
simple—training. After being inundated with sample training quizzes after
I posted Part 1 I made this a three-part series. Part 2 furnished quizzes on
wage and hour law, both federal and state. This final segment will discuss
quizzes for basic federal and state taxation.
The federal taxation quiz, contained at the end of this paper, covers the
more common areas of payroll taxation including supplemental wages, tax rates and tax deposits. It has
25 questions, each with 4 possible answers. This would be a good basis for the beginner’s test on federal
taxation. It includes demonstration of the correct calculations for FICA taxes, and general knowledge of
IRS tax law as it relates to payroll tax withholding and depositing I have highlighted in yellow the correct
answers. Of course you would also need to create one for state tax law. You will find that at the end of the
federal test. No answers are provided for this 10 question test as it depends on the state. But again, it is a
good starting point for you.
I hope you find the tests useful and helpful in the training of your payroll staff.
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White Paper: Training the Payroll Staff Part 3: Testing ©2016 The Payroll Advisor
Federal Tax Law Quiz
1. What does EIN stand for?
A. Employer Income Network
B. Employer Income Number
C. Employer Identification Number
D. Employee Internet Number
2. An EIN must be obtained prior to when the first withholding payment is due for deposit. If an
employer does not have an EIN, a Form _______________ Application for Employer Identification
Number must be completed and submitted to the IRS.
A. W-9
B. SS-8
C. SS-4
D. SS-5
3. What does FICA stand for?
A. Federal Insurance Contributions Act
B. Federal Insurance Contributions Agency
C. Federal Income Cost Accounting
D. Federal Income Contribution Adjustment
4. What does OASDI stand for?
A. Old Age, Survivors and Disability Income
B. Old Age, Security and Disability Insurance
C. Old Age, Security and Disability Income
D. Old Age, Survivors and Disability Insurance.
5. What is the current OADSI wage base?
A. $117,000
B. $118,500
C. $110,100
D. Unlimited
6. What is the current Medicare wage base?
A. $117,000
B. $118,500
C. $110,100
D. Unlimited
7. What is the current OASDI employee rate?
A. 12.4%
B. 6.2%
C. 1.45%
D. 2.9%
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White Paper: Training the Payroll Staff Part 3: Testing ©2016 The Payroll Advisor
8. What is the current Medicare employee rate?
A. 12.4%
B. 6.2%
C. 1.45%
D. 2.9%
9. What two taxes, when combined, are referred to as the FICA taxes?
A. OASDI and social security
B. OASDI and Medicare
C. Social security and FUTA
D. Medicare and unemployment insurance
10. Calculate the employee OASDI for an employee who makes $1250 gross wages on a biweekly
payroll.
A. $77.50
B. $18.13
C. $52.50
D. $36.26
11. Calculate the employee portion of the Medicare tax for an employee who makes $1250 gross wages
on a biweekly Payroll.
A. $77.50
B. $18.13
C. $155.00
D. $36.26
12. What is the wage base and rate for the Additional Medicare Tax effective in 2013?
A. 1.45% and unlimited
B. 0.9% on wages above $200,000
C. 1.45% on wages above $200,000
D. 2.35% on wages above $200,000
13. What does FUTA stand for?
A. Federal Underwriting Taxation Agency
B. Federal Underwriting and Taxation Act
C. Federal Unemployment Tax Act
D. Foreign Unemployment Taxation Act
14. FICA taxes are reconciled and reported on what IRS form along with the federal income tax?
A. Form 940
B. Form 941
C. Form 945
D. Form SS-4
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White Paper: Training the Payroll Staff Part 3: Testing ©2016 The Payroll Advisor
15. Which of the following are deposit schedules for income tax and FICA taxes in 2016?
A. Weekly and bi-weekly
B. Weekly and monthly
C. Semi-weekly and monthly
D. Bi-weekly and semi-monthly
16. What is the Form W-4?
A. Employee’s Withholding Allowance Certificate
B. Employee’s Year-End Tax Allowance Certificate
C. Application for Employer Identification Number
D. Employee’s Wage Allowance Certificate
17. If an employer does not receive a Form W-4 on a newly hired employee, they should withhold at:
A. Single, zero allowances
B. Married, zero allowances
C. Do not withhold until a Form W-4 is received
D. Do not pay until a Form W-4 is received
18. A valid Form W-4 that does not claim exempt remains in effect until:
A. The calendar tax year ends
B. The employee gets married
C. The end of the following quarter
D. The employee provides a new form
19. A valid Form W-4 that claims exempt remains in effect until:
A. The employee provides a new form
B.
The end of the following quarter
C.
December 31
D. April 15
20. Form W-4 for a nonresident alien must have what written above the dotted line 6 of the form?
A. "Additional Dollar Amount"
B. Nonresident alien or NRA
C. Visa type such as J or F if exempt from income tax
D. Name of country such as Canada or Mexico
21. What is the current federal supplemental tax rate?
A. 20%
B. 25%
C. 28%
D. 27%
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White Paper: Training the Payroll Staff Part 3: Testing ©2016 The Payroll Advisor
22. A payment made to a deceased employee in the year of death is subject to which federal taxes?
A. Income tax only
B. FICA and FUTA only
C. Income tax, FICA, and FUTA
D. FICA only
23. The IRS Form _____ was created to report and reconcile the payments made to the IRS for the
income tax and FICA taxes during a quarter period.
A. 940
B. 941
C. 943
D. 944
24. When would Form 941 be due for the third quarter?
A. October 15
B. October 10
C. October 31
D. September 30
25. Who must file a Schedule B?
A. A quarterly depositor
B. A semi-weekly depositor
C. An annual depositor
D. A monthly depositor
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White Paper: Training the Payroll Staff Part 3: Testing ©2016 The Payroll Advisor
State Tax Law Quiz
1.
2.
3.
4.
5.
6.
7.
8.
9.
What is the SUI tax, in general?
What are the income tax deposit requirements for the state?
What is the current wage base for SUI for the state?
How is SUI tax deposited?
Are there any local taxes for the state?
What is a reciprocal agreement when it comes to state income tax?
Does the state have or honor any reciprocal agreements?
Does the state have a Form W-4 equivalent?
Does the state have a different form if claiming exempt from state taxes such as for a
military spouse exemption?
10. What is the supplemental tax rate for the state? (or do they require the aggregate method
of withholding)
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