- Exam Code: PF1
- Exam Name: Payroll Fundamentals 1Exam
- Certification Provider: National Payroll Institute
- Corresponding Certification:Payroll Fundamentals
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National Payroll Institute PF1 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Workers’ Compensation | - Workers compensation administration
|
| Commission Payments | - Commission payroll processing
|
| Employment Income – Allowances, Expenses and Benefits | - Taxable and non-taxable benefits
|
| New Employee Information | - Employee setup and documentation
|
| Payroll Accounting | - Payroll accounting practices
|
| Year-End Processing | - Federal and provincial year-end reporting
|
| Termination of Employment | - Termination processing
|
| Provincial Remittances | - Provincial payroll requirements
|
| Employment Income – Regular Earnings | - Regular payroll calculations
|
| Record of Employment | - ROE processing
|
| Federal Remittances | - Government remittance obligations
|
| Non-Regular Payments | - Special payroll payments
|
| Non-Statutory Deductions | - Voluntary deductions
|
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
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
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
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 0Correct 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
Correct Answer: A 🗳️
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