Test Bank for An Introduction to Payroll Administration

Canadian 1st Edition Dryden 1259649911 9781259649912

Download full test bank at:

https://testbankpack.com/p/test-bank-for-an-introduction-to-payroll-
administration-canadian-1st-edition-dryden-1259649911-9781259649912/
Download full solution manual at:
https://testbankpack.com/p/solution-manual-for-an-introduction-to-
payroll-administration-canadian-1st-edition-dryden-1259649911-
9781259649912/

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.

1) Employees do not need to be notified when court order with-holdings are requested since they
should be aware of the situation already.
Answer: True False

2) Employers should maintain documentation showing that employees have accepted any required
non-statutory deductions.
Answer: True False

3) Finding out that an employee has an outstanding court order related to unpaid debts can be upsetting
to the employer and is grounds for termination of employment.
Answer: True False

4) If a sales clerk is short on their till at the end of the night, the employer can deduct the amount of the
shortage off their next pay.
Answer: True False

5) If a gas attendant is on duty at the time when a customer leaves without paying, the employer can
deduct the amount of the lost payment off their next pay.
Answer: True False

6) If group insurance premiums are partially paid by the employee and the employee has acknowledged
this deduction in writing, the employer can deduct the cost directly from each pay.
Answer: True False

7) Defined contribution benefit plans are valued by employees because the payment at the retirement is
known in advance.
Answer: True False
1
 8) Employees bear the risk of market fluctuation when they have defined benefit pension plans.
Answer: True False

9) Employees bear the risk of market fluctuation when they have defined contribution pension plans.
Answer: True False

10) Employer optional deductions such as social club memberships should be deducted first, before
statutory deductions are made in case the employee runs out of money to cover off the extras.
Answer: True False

11) Until the money is due, deductions taken off employee payments can be used to cover operating
expenses for the business.
Answer: True False

2
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

12) If gross earnings less statutory deductions for an employee in Ontario with a family support
Garnishment Order equal $1500, what is the maximum amount that can be deducted for the Order?
A) $1500 B) $750 C) $1250 D) $0 E) $300
Answer: B

13) If gross earnings less statutory deductions for an employee in Ontario with a non-family support
Garnishment Order equal $1500, what is the maximum amount that can be deducted for the Order?
A) $0 B) $1500 C) $750 D) $300 E) $1250
Answer: D

14) What is the maximum amount, by percentage, that a family support order may direct the employer
to with-hold?
A) 10% B) 20% C) 30% D) 50% E) 40%
Answer: D

15) An employee with an outstanding family support Garnishment Order asks you to allow him to make
his RRSP contributions before the available garnishment amount is calculated. You must:
A) Calculate the amount after all statutory deductions are applied
B) Calculate the amount after all deductions are applied including voluntary
C) Terminate the employee immediately for trying to skip out on his family responsibilities
D) Contact his supervisor immediately and inform him about the terms of the Garnishment Order
E) Agree and do as asked as it is his pay
Answer: A

16) The following is not an example of a statutory deduction.

A) Employment Insurance Premiums
B) Union Dues
C) Provincial Taxes
D) Canada Pension Plan Contributions
E) Federal Taxes
Answer: B

17) If an employee disagrees with the terms outlined in a Garnishment Order the payroll administrator
should:
A) Follow directions provided by the employee regarding how they would like the matter handled
B) Contact the court to discuss the employee objection
C) Deduct additional amounts in case the employee decides to quit over the disagreement
D) Continue to follow the terms of the order until advise by the court otherwise
E) Cease all deductions until the issue is resolved
Answer: D

3
 18) A Garnishment Order may not be issued by:
A) A Credit Union (where the member has signed an Assignment of Wages)
B) Small Claims Court
C) Canada Revenue Agency
D) The Federal Court of Canada
E) Creditors (where the member has signed an Assignment of Wages)
Answer: E

19) The following statement is not true regarding employer sponsored Registered Retirement Savings
Plans.
A) Employee access is often limited to the principal or interest income prior to retirement.
B) The final retirement benefit is known in advance.
C) Allow employers to reduce taxes from source deductions.
D) Fees are usually lower than for individuals.
E) Contributions may be made by the employer, the employee or both depending on the structure
of the plan.
Answer: B

20) An employee has a family support order demanding $500 per weekly pay be with-held. If the
employee has a gross taxable income of $1000, can the full amount be deducted on this pay?
A) Yes
B) No
C) Maybe, if the employee does not have any voluntary deductions
D) Maybe, if the employee has many tax credits
E) There isn't enough information to say for sure
Answer: B

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

21) Name the 3 Statutory Deductions in Canada.

Answer: 1. Canada/Quebec Pension Plan Contributions
2. Employment Insurance Premiums
3. Income Taxes

22) What steps are recommended when a Garnishment Order is received by the employer?
Answer: Contact the court immediately if the employee is unknown or no longer works for you.
Provide the employee with a copy of the Order in a confidential manner.
If the employee objects to the with-holding, advise them to contact the court and let them know
have no option but to follow the Order.
Carefully review the terms of the Order and speak to the court if in doubt on how to comply.
Follow the instructions explicitly.
Begin deductions with the next pay cycle.
Notify the court immediately if an interruption of earnings occurs.

4
23) What should be acknowledged in the employee written permission for employer optional
deductions?
Answer: Name and address of payee
Purpose of payment
Amount of payment, including frequency and total amount if appropriate
The date of signing as well as any termination date for the deductions

24) List 3 examples of employer optional deductions that may be authorized by the employer for the
employee's benefit.
Answer: Solution can include any combination of the following (or others):
Canada Savings Bonds
Provincial Savings Bonds
Parking Fees
Employer sponsored social funds
Charities such as United Way and the Red Cross
Gym membership payments

25) List the order of priority of deductions for an employee.

Answer: Statutory deductions (CPP, EI and Taxes)
Garnishment Orders and other legally binding orders
Employee compulsory
Employee voluntary deductions

5
Answer Key
Testname: UNTITLED5

1) FALSE
2) TRUE
3) FALSE
4) FALSE
5) FALSE
6) TRUE
7) FALSE
8) FALSE
9) TRUE
10) FALSE
11) FALSE
12) B
13) D
14) D
15) A
16) B
17) D
18) E
19) B
20) B
21) 1. Canada/Quebec Pension Plan Contributions
2. Employment Insurance Premiums
3. Income Taxes
22) Contact the court immediately if the employee is unknown or no longer works for you.
Provide the employee with a copy of the Order in a confidential manner.
If the employee objects to the with-holding, advise them to contact the court and let them know that you ha
option but to follow the Order.
Carefully review the terms of the Order and speak to the court if in doubt on how to comply.
Follow the instructions explicitly.
Begin deductions with the next pay cycle.
Notify the court immediately if an interruption of earnings occurs.
23) Name and address of payee
Purpose of payment
Amount of payment, including frequency and total amount if appropriate
The date of signing as well as any termination date for the deductions
24) Solution can include any combination of the following (or others):
Canada Savings Bonds
Provincial Savings Bonds
Parking Fees
Employer sponsored social funds
Charities such as United Way and the Red Cross
Gym membership payments

6
Answer Key
Testname: UNTITLED5

25) Statutory deductions (CPP, EI and

Taxes)
Garnishment Orders and other legally binding orders
Employee compulsory
Employee voluntary deductions