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National Payroll Institute Payroll Fundamentals PF1

PF1

Exam Code: PF1

Exam Name: Payroll Fundamentals 1Exam

Updated: Aug 25, 2026

Q&A Number: 75 Q&As

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National Payroll Institute PF1 Exam Syllabus Topics:

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

National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

1. A retiring allowance includes:

A) Accumulated overtime
B) Payments in recognition of long service
C) Vacation pay
D) Bonus or incentive pay


2. Bonus and incentive pays are subject to which statutory deductions?

A) Employment Insurance and Quebec Parental Insurance Plan premiums and Northwest Territories
/Nunavut payroll taxes
B) Canada/Quebec Pension Plan contributions, Quebec Parental Insurance Plan premiums, income taxes and Northwest Territories/Nunavut payroll taxes
C) Canada/Quebec Pension Plan contributions, Employment Insurance and Quebec Parental Insurance Plan premiums, income taxes and Northwest Territories/Nunavut payroll taxes
D) Canada/Quebec Pension Plan contributions, Employment Insurance premiums and income taxes


3. Dollar values attributed to something the employer has either provided to an employee or paid for on an employee's behalf are:

A) Benefits
B) Allowances
C) Earnings
D) Expense reimbursements


4. A Third Party Demand is issued by the Canada Revenue Agency for:

A) Unpaid income taxes or unpaid statutory deductions
B) Overpaid Employment Insurance benefits
C) Outstanding child support and/or maintenance payments
D) A debt owed to a third party creditor


5. Anthony earns $750.00 per week. He has a cash taxable benefit of $25.00 per week. Anthony is exempt from CPP contributions. Calculate the net taxable income for the week.


Solutions:

Question # 1
Answer: B
Question # 2
Answer: C
Question # 3
Answer: A
Question # 4
Answer: A
Question # 5
Answer: Only visible for members

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