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National Payroll Institute PF1 Exam Syllabus Topics:

SectionObjectives
Workers’ Compensation- Workers compensation administration
  • 1. Premium calculations
  • 2. Employer reporting
Commission Payments- Commission payroll processing
  • 1. Commission earnings calculations
  • 2. Tax treatment of commissions
Employment Income – Allowances, Expenses and Benefits- Taxable and non-taxable benefits
  • 1. Allowances and reimbursements
  • 2. Benefit taxation
New Employee Information- Employee setup and documentation
  • 1. Payroll records management
  • 2. Federal and provincial tax forms
Payroll Accounting- Payroll accounting practices
  • 1. Payroll reconciliations
  • 2. Journal entries
Year-End Processing- Federal and provincial year-end reporting
  • 1. T4 and RL-1 preparation
  • 2. Year-end reconciliations
Termination of Employment- Termination processing
  • 1. Severance payments
  • 2. Termination pay calculations
Provincial Remittances- Provincial payroll requirements
  • 1. Provincial payroll taxes
  • 2. Provincial reporting obligations
Employment Income – Regular Earnings- Regular payroll calculations
  • 1. Overtime calculations
  • 2. Salary and hourly wage calculations
Record of Employment- ROE processing
  • 1. Electronic filing
  • 2. ROE completion requirements
Federal Remittances- Government remittance obligations
  • 1. CPP and EI remittances
  • 2. Income tax remittances
Non-Regular Payments- Special payroll payments
  • 1. Bonus payments
  • 2. Vacation pay calculations
Non-Statutory Deductions- Voluntary deductions
  • 1. Union dues
  • 2. Benefit premiums

National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

A paper Record of Employment must be issued:

  • A. Within five calendar days of an interruption of earnings
  • B. When an employer becomes aware of an interruption of earnings exceeding seven calendar days
  • C. All of the above
  • D. When requested by Service Canada
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

Explanation: Only visible for ITPassLeader members. You can sign-up / login (it's free).

When would a Record of Employment be issued for an employee paid mainly by commission?

  • A. When the employment relationship has been severed
  • B. When the employee has not earned any commission after six months
  • C. An employee mainly paid by commission is not entitled to receive a Record of Employment
  • D. When the employee has had seven consecutive calendar days without both work and insurable earnings
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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What information is required to calculate thestandby charge, thereduced standby charge, and theoperating cost benefitfor a company-owned automobile?

  • A. Capital cost, availability, business kilometres
  • B. Capital cost, sales tax, availability, total kilometres, business kilometres, and personal kilometres
  • C. Capital cost, total kilometres, personal kilometres, and business kilometres
  • D. Capital cost, sales taxes, availability
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

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Paul Westin works for an Alberta organization and receives a regular salary of $1,800.00 semi-monthly. He will be receiving a payout of accrued vacation with no time taken of $1,400.00 on a separate cheque. He has federal and provincial TD1s on file with claim code 1. Calculate the income taxes to be withheld on his vacation pay.

Reveal Solution  Discussion  0

Correct Answer:

341.50
Explanation:
CRA's method for bonus/irregular payments paid separately is to calculate income tax on the combined pay (regular pay + the irregular payment) using the regular tax tables, then subtract the tax that would apply to the regular pay alone. The difference is the income tax to withhold from the irregular payment.
Here, the semi-monthly taxable pay is:
Regular pay = $1,800.00
Regular + vacation payout = $3,200.00
Using the 2026 Alberta semi-monthly (24 pay periods) tax tables with claim code 1:
At $1,800, Federal tax = $130.45 and Alberta tax = $58.55 # Total = $189.00.
At $3,200, Federal tax = $356.50 and Alberta tax = $174.00 # Total = $530.50.
Income tax on the vacation payout = $530.50 # $189.00 = $341.50.
CPP (including the enhanced portion) is a separate statutory deduction that must also be calculated on the payout, but this question asked specifically for income tax withholding.

An employee-employer relationship is deemed to exist when:

  • A. The employee continues to accrue benefits in the organization's pension plan
  • B. The employee refuses the right to be recalled to work
  • C. The employee continues to participate in some of the benefit plans that were available while they were employed
  • D. There is no expectation of work to be performed by the employee
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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