National Payroll Institute Payroll Fundamentals 1Exam : PF1

  • Exam Code: PF1
  • Exam Name: Payroll Fundamentals 1Exam
  • Updated: Oct 10, 2026
  • Q & A: 75 Questions and Answers

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National Payroll Institute PF1 Exam Syllabus Topics:

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

National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

Question #1

The source deductions form completed by all new employees in Quebec is called:

  • A. TP-1015.3-V
  • B. T1213
  • C. T2222
  • D. TD1-AB
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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Question #2

Which of the following company-compulsory deductions would reduce the employee's gross taxable income for purposes of withholding income taxes?

  • A. Employee contributions to a group Registered Retirement Savings Plan (RRSP)
  • B. Employee payment of provincial health care plan premiums
  • C. Employee payment of a portion of group benefit plan premiums
  • D. All of the above
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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Question #3

Alyssa is a member of her employer's Defined Contribution Pension Plan. The plan defines the contribution as 3% of the employee's pensionable earnings, with the employer matching the employee's contribution.
Alyssa's pensionable earnings are $3,400.00 per month. Calculate the total payment to be remitted to Alyssa's Defined Contribution Pension Plan each month.

Reveal Solution  Discussion  0

Correct Answer:

$204.00 per month
Explanation:
In a Defined Contribution (DC) pension plan, contributions are calculated as a set percentage of the employee' s pensionable earnings, and the total remittance is usually the sum of the employee deduction plus the employer's matching contribution, based on the plan text. Here, the plan states the employee contributes 3% of pensionable earnings, and the employer matches the employee contribution.
Step 1: Calculate the employee's pension contribution:
3% × $3,400.00 = 0.03 × 3,400.00 = $102.00.
Step 2: Calculate the employer match:
Because the employer matches the employee contribution, the employer contributes $102.00 as well.
Step 3: Total remittance to the plan:
$102.00 (employee) + $102.00 (employer) = $204.00 each month.
From a payroll processing perspective, the employee amount is withheld from gross pay as a payroll deduction according to plan rules, while the employer match is recorded as an employer expense. Payroll remits both amounts to the plan administrator following the plan's remittance schedule, and should reconcile pensionable earnings and contributions to ensure accuracy and compliance with plan terms.

Question #4

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. Expense reimbursements
  • D. Earnings
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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Question #5

Steve is physically disabled and his employer pays for his parking spot. This is considered:

  • A. A taxable allowance
  • B. A cash taxable benefit
  • C. None of the above
  • D. A non-cash taxable benefit
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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