Payroll 101: Best Practices and Compliance

1. Which one of these is a step to provide excellent customer service?

Tell the person when they are wrong.

Do not offer timing for a resolution.

Put obnoxious people on hold until they give up and hang up.

Put yourself in the person's shoes.

Putting yourself in the person's shoes is a step to provide excellent customer service because it allows you to empathize with the customer and understand their perspective. By doing so, you can better address their concerns, provide appropriate solutions, and ensure their satisfaction. This step helps in building a positive relationship with the customer and enhancing their overall experience.

Explanation

Putting yourself in the person's shoes is a step to provide excellent customer service because it allows you to empathize with the customer and understand their perspective. By doing so, you can better address their concerns, provide appropriate solutions, and ensure their satisfaction. This step helps in building a positive relationship with the customer and enhancing their overall experience.

2. Each employee must complete a W4.

True

False

Each employee must complete a W4 form that identifies their withholding status and number of exemptions.

Explanation

Each employee must complete a W4 form that identifies their withholding status and number of exemptions.

3. Which one is not a year-end activity?

Print W2's.

Clean-up data in the payroll system.

Check employee bank accounts.

Review audit reports.

The correct answer is "Check employee bank accounts." This is not a year-end activity because it is a regular task that should be done throughout the year to ensure accurate and timely payment to employees. Year-end activities typically involve tasks such as printing W2's, cleaning up data in the payroll system, and reviewing audit reports to ensure compliance and accuracy in financial records.

Explanation

The correct answer is "Check employee bank accounts." This is not a year-end activity because it is a regular task that should be done throughout the year to ensure accurate and timely payment to employees. Year-end activities typically involve tasks such as printing W2's, cleaning up data in the payroll system, and reviewing audit reports to ensure compliance and accuracy in financial records.

4. The Common Law Test should be used to determine how to classify an employee.

True

False

The Common Law Test should be used to determine how to classify employees. The employer’s determination affects the entire relationship between the employer and the worker.

Explanation

The Common Law Test should be used to determine how to classify employees. The employer’s determination affects the entire relationship between the employer and the worker.

5. Which one is NOT a type of supplemental wages?

Bonus

Commissions

Holiday pay

Severance pay

Holiday pay is not a type of supplemental wages.

Explanation

Holiday pay is not a type of supplemental wages.

6. Supplemental wages must be taxed at a higher federal income tax rate of 25%.

True

False

Supplemental wages must be taxed at a higher federal income tax rate (flat 25%) than regular wages. Some states have a higher rate as well.

Explanation

Supplemental wages must be taxed at a higher federal income tax rate (flat 25%) than regular wages. Some states have a higher rate as well.

7. Types of garnishments are creditor garnishments, student loans, and mortgage deductions.

True

False

Mortgage deductions are not a type of garnishment.

Explanation

Mortgage deductions are not a type of garnishment.

8. ____ # of states do not withhold income taxes from wages earned.

All but nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) require employers to withhold income tax from employee’s wages.

Explanation

All but nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) require employers to withhold income tax from employee’s wages.

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