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| Section | Objectives |
|---|---|
| Earnings, Deductions, and Taxation | - Types of earnings
|
| Payroll Records and Compliance Reporting | - Recordkeeping requirements
|
| Payroll Fundamentals and Compliance Framework | - Payroll legislation and regulatory bodies
|
By the authority of which Act can the Canada Revenue Agency garnish the wages of an employee who has failed to pay Employment Insurance premiums, Canada Pension Plan contributions, or income tax deductions?
Correct Answer: C 🗳️
Explanation: Only visible for VerifiedDumps members. You can sign-up / login (it's free).
The employee-employer relationship is deemed to be severed when:
Correct Answer: B 🗳️
Explanation: Only visible for VerifiedDumps members. You can sign-up / login (it's free).
Michael is an employee in Alberta who is paid bi-weekly and earns $1,600.00 per pay period. He has a taxable meal allowance of $30.00 per pay period. His federal and provincial TD1s on file show a claim code
2. Michael already reached the annual maximum first and second Canada Pension Plan (CPP) contributions before this pay. Calculate his total federal and provincial income taxes.
Correct Answer:
(total federal + Alberta tax): $173.48
Explanation:
Taxable gross for the period = $1,600.00 + $30.00 = $1,630.00 (a taxable allowance is included in income for tax withholding).
Using CRA T4032-AB (Biweekly, 26 pay periods) with claim code 2:
Federal tax at pay $1,630 falls in the $1,619-$1,635 range # CC2 = $107.35.
Alberta provincial tax at pay $1,630 falls in the $1,628-$1,644 range # CC2 = $46.55.
Subtotal tax from the tables = $107.35 + $46.55 = $153.90.
CRA notes these tax tables build in the tax credits for CPP/EI, so when CPP is not deducted (because annual max already reached), you must increase tax withholding accordingly.
CPP that would have been deducted this pay (using CRA rates/YBE):
Pensionable = $1,630 # ($3,500/26 = $134.62) = $1,495.38; CPP (4.95% + 1.00% = 5.95%) = $88.98.
Add back missing credits: Federal 14% × 88.98 = $12.46; Alberta 8% × 88.98 = $7.12 # total $19.58.
Final total tax = $153.90 + $19.58 = $173.48.
The deduction for living in a prescribed zone can be claimed by residents of which jurisdictions?
Correct Answer: C 🗳️
Explanation: Only visible for VerifiedDumps members. You can sign-up / login (it's free).
The formula for calculating net pay is:
Correct Answer: B 🗳️
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