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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Record of Employment (ROE) | 20% | - Submission and deadlines
|
| Topic 2: Termination and Special Payments | 30% | - Leaves and absences
|
| Topic 3: Communication and Compliance | 10% | - Accuracy and documentation
|
| Topic 4: Individual Pay Calculations | 40% | - Non-regular earnings
|
Ursula is 17 years old, works in Quebec and earns $750.00 weekly. Ursula pays weekly union dues of $18.00 along with a special weekly union assessment of $10.00 for construction of a new union hall for its members.
Ursula also has registered pension plan (RPP) contributions of $20.00 deducted from each pay. Calculate Ursula's net federal taxable income.
Correct Answer:
$712.00
Explanation:
For payroll income tax purposes, net taxable income starts with the employee's gross taxable income and then subtracts only those deductions that are deductible for income tax and can be recognized at source. CRA payroll guidance shows this approach by subtracting items such as RPP contributions and union dues when determining net taxable income for calculating income tax deductions.
Gross taxable income (weekly): $750.00.
RPP contributions are deductible (the amounts reported from box 20 of the T4 are generally deductible).
Regular union dues are deductible; however, the CRA states that deductible annual union/professional dues do not include special assessments or charges for anything other than ordinary operating costs. A levy specifically for constructing a new union hall is a special assessment, so it is not deductible as union dues.
So the deductions that reduce federal taxable income here are: $18.00 (union dues) + $20.00 (RPP) = $38.00.
Net federal taxable income = $750.00 # $38.00 = $712.00.
An organization pays the premiums for a sickness or accident plan for their president only. This would be considered:
Correct Answer: A 🗳️
Explanation: Only visible for Pass4guide members. You can sign-up / login (it's free).
Duncan Drapak was employed in Ontario. Upon termination of his employment, he will be paid $7,760.00 legislated wages in lieu of notice together with his final weekly pay of $875.00. Calculate Duncan's Canada Pension Plan (CPP) contribution if the yearly maximum contribution will not be exceeded.
Reveal Solution Discussion 0Correct Answer:
$509.78
Explanation:
Legislated wages in lieu of notice are treated as pensionable employment earnings for CPP purposes, so they are included with the employee's final regular pay when calculating CPP deductions (assuming no CPP exemption applies).
Step 1: Determine total pensionable earnings for the week:
$7,760.00 + $875.00 = $8,635.00.
Step 2: Subtract the CPP basic exemption (Year's Basic Exemption is $3,500 annually). For a weekly payroll, the basic exemption is prorated:
$3,500 ÷ 52 = $67.31.
CPP contributory earnings for the week:
$8,635.00 # $67.31 = $8,567.69.
Step 3: Apply the 2026 CPP employee contribution rate of 5.95% (base CPP). The question states the annual maximum will not be exceeded, so no capping is required in this calculation.
CPP contribution:
$8,567.69 × 5.95% = $509.7777..., rounded to $509.78.
The authorization for hiring form should contain a checklist to ensure the organization obtains all required information. What is an example of an item that could be on that checklist?
Correct Answer: D 🗳️
Explanation: Only visible for Pass4guide members. You can sign-up / login (it's free).
Paula is granted a pay increase. The paperwork informing the payroll department of the pay increase is two pay periods late. What method would be used to calculate income taxes on the separate retroactive payment?
Correct Answer: B 🗳️
Explanation: Only visible for Pass4guide members. You can sign-up / login (it's free).
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