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Instant Download National Payroll Institute : PF1 Questions & Answers as PDF & Test Engine

PF1
  • Exam Code: PF1
  • Exam Name: Payroll Fundamentals 1Exam
  • Updated: Sep 27, 2026
  • No. of Questions: 75 Questions and Answers
  • Download Limit: Unlimited

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National Payroll Institute PF1 Exam Syllabus Topics:

SectionObjectives
Topic 1: Federal Remittances- Government remittance obligations
  • 1. CPP and EI remittances
  • 2. Income tax remittances
Topic 2: Record of Employment- ROE processing
  • 1. Electronic filing
  • 2. ROE completion requirements
Topic 3: Year-End Processing- Federal and provincial year-end reporting
  • 1. Year-end reconciliations
  • 2. T4 and RL-1 preparation
Topic 4: Workers’ Compensation- Workers compensation administration
  • 1. Premium calculations
  • 2. Employer reporting
Topic 5: Commission Payments- Commission payroll processing
  • 1. Tax treatment of commissions
  • 2. Commission earnings calculations
Topic 6: Non-Statutory Deductions- Voluntary deductions
  • 1. Union dues
  • 2. Benefit premiums
Topic 7: Employment Income – Regular Earnings- Regular payroll calculations
  • 1. Salary and hourly wage calculations
  • 2. Overtime calculations
Topic 8: Employment Income – Allowances, Expenses and Benefits- Taxable and non-taxable benefits
  • 1. Benefit taxation
  • 2. Allowances and reimbursements
Topic 9: Payroll Accounting- Payroll accounting practices
  • 1. Payroll reconciliations
  • 2. Journal entries
Topic 10: Provincial Remittances- Provincial payroll requirements
  • 1. Provincial reporting obligations
  • 2. Provincial payroll taxes
Topic 11: Termination of Employment- Termination processing
  • 1. Severance payments
  • 2. Termination pay calculations
Topic 12: New Employee Information- Employee setup and documentation
  • 1. Payroll records management
  • 2. Federal and provincial tax forms
Topic 13: Non-Regular Payments- Special payroll payments
  • 1. Bonus payments
  • 2. Vacation pay calculations

National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

Feraz Dalia is due $12,523.00 in legislated wages in lieu of notice that will be added to his last weekly pay of
$1,080.00. Calculate Feraz's Employment Insurance (EI) premium, if his employer is situated in Saskatchewan and the yearly maximum contribution will not be exceeded.

Reveal Solution  Discussion  0

Correct Answer:

$221.73 (employee EI premium)
Explanation:
In Saskatchewan (outside Quebec), EI premiums are deducted at the 2026 employee EI premium rate of $1.63 per $100 of insurable earnings (1.63%).
CRA guidance confirms that wages in lieu of termination notice are subject to EI premiums, and to determine statutory deductions you include the wages in lieu with the regular income (if any) for the pay period.
Step 1: Determine total insurable earnings in the final pay (assuming both amounts are insurable and the annual maximum won't be exceeded):
$12,523.00 + $1,080.00 = $13,603.00.
Step 2: Calculate EI premium:
$13,603.00 × 1.63% = $13,603.00 × 0.0163 = $221.7289, which rounds to $221.73.
So, the EI premium to deduct from Feraz's pay for this combined payment is $221.73.

A paper Record of Employment must be issued:

  • A. All of the above
  • B. When requested by Service Canada
  • C. Within five calendar days of an interruption of earnings
  • D. When an employer becomes aware of an interruption of earnings exceeding seven calendar days
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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The employee-employer relationship is deemed to be severed when:

  • A. The employee continues to accrue benefits in the organization's pension plan
  • B. The employee retains the right to be recalled to work
  • C. There is no expectation of work to be performed by the employee
  • D. None of the above
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Which of the following types of earnings are not considered income from employment?

  • A. Vacation pay
  • B. Commissions
  • C. Severance pay
  • D. Regular salary
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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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.

Reveal Solution  Discussion  0

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.

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