Exam Name: Payroll Fundamentals 1Exam
Certification Provider: National Payroll Institute
Corresponding Certification: Payroll Fundamentals
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- Total Questions: 75
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National Payroll Institute PF1 Exam Overview:
| Certification Vendor: | National Payroll Institute |
|---|---|
| Exam Name: | Payroll Fundamentals 1 |
| Exam Number: | PF1 |
| Exam Price: | USD 550-600 |
| Related Certifications: | Payroll Compliance Professional (PCP) |
| Exam Format: | Assignments, Remote Proctored Online Exam, Final Exam, Midterm Exam, Discussion Activities |
| Available Languages: | French, English |
| Passing Score: | 65% |
| Exam Duration: | 180-240 |
| Sample Questions: | DOWNLOAD DEMO |
| Exam Way: | Online asynchronous course with remote proctored midterm and final exams. |
| Pre Condition: | Payroll Compliance Legislation course is required before taking Payroll Fundamentals 1. |
| Official Syllabus URL: | https://payroll.ca/certification/payroll-fundamentals-1 |
National Payroll Institute PF1 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Topic 1: Commission Payments | - Commission payroll processing
|
| Topic 2: Non-Regular Payments | - Special payroll payments
|
| Topic 3: Provincial Remittances | - Provincial payroll requirements
|
| Topic 4: New Employee Information | - Employee setup and documentation
|
| Topic 5: Employment Income – Regular Earnings | - Regular payroll calculations
|
| Topic 6: Record of Employment | - ROE processing
|
| Topic 7: Year-End Processing | - Federal and provincial year-end reporting
|
| Topic 8: Termination of Employment | - Termination processing
|
| Topic 9: Employment Income – Allowances, Expenses and Benefits | - Taxable and non-taxable benefits
|
| Topic 10: Federal Remittances | - Government remittance obligations
|
| Topic 11: Non-Statutory Deductions | - Voluntary deductions
|
| Topic 12: Workers’ Compensation | - Workers compensation administration
|
| Topic 13: Payroll Accounting | - Payroll accounting practices
|
Answering Your National Payroll Institute Payroll Fundamentals 1Exam Questions
National Payroll Institute Payroll Fundamentals 1Exam is an official National Payroll Institute certification exam, identified by exam code PF1. Passing earns you the Payroll Fundamentals certification, classified at the Intermediate level. It also connects with Payroll Compliance Professional (PCP), so it can serve as a stepping stone in a wider certification plan. In hiring, certificates work as a quick, quantitative standard, and this one tells employers your skills passed the vendor's own measurement.
The National Payroll Institute Payroll Fundamentals 1Exam exam requires 65% to pass, and official registration costs USD 550-600. Since retakes bill the full USD 550-600 again, the economic argument for thorough preparation writes itself. Let the Lead2PassExam practice tests be your measuring stick: when your scores hold above the passing line across several consecutive sessions, the exam stops being a financial risk.
Payroll Compliance Legislation course is required before taking Payroll Fundamentals 1.
Because vendors adjust their policies, verify the current requirements before registering on the official exam page.
Yes. Lead2PassExam provides a free PDF demo of the National Payroll Institute Payroll Fundamentals 1Exam questions, so you can evaluate the material before committing. After purchase, updates are free for 365 days, and when your product expires you can extend the update service at a 50% discount.
Your purchase is backed by a 100% money-back guarantee with transparent conditions. Take the National Payroll Institute Payroll Fundamentals 1Exam exam within 60 days of purchase; if you fail, you qualify for a full refund, provided the exam matches your product. Attempts within 3 days of purchase do not qualify, and neither do downloaded-but-unused products, free materials, or expired orders; the candidate name must match the payer name. File with a scanned enrollment slip and the official Score Report PDF within 2 days of the exam, and claims are processed within 7 days. You may instead choose an exchange: two other exam products of equal value, free, while your original purchase keeps its update service.
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The National Payroll Institute Payroll Fundamentals 1Exam syllabus is organized into 13 domains, with the largest being New Employee Information, Payroll Accounting, and Workers’ Compensation. The complete breakdown appears in the topics section above; a clear classification of what the exam tests is the first step toward efficient preparation.
National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:
PF1 Exam - Net Pay Calculation (Template Worksheet)
Scenario
Diane Lemay works for Monarch Construction in Alberta and earns an annual salary of $49,500.00, paid on a semi-monthly basis.
The company provides its employees with group term life insurance coverage of two times annual salary and pays a monthly premium of $0.62 per $1,000.00 of coverage.
Diane uses her car to meet with clients on company business and receives a taxable car allowance of $50.00 per pay.
The company has a defined contribution pension plan to which Diane contributes 5% of her salary each pay.
Diane also contributes $20.00 to United Way and has $5.00 deducted for her social club membership each pay. She belongs to a union and pays 2% of her salary in union dues per pay period.
Diane's federal and provincial TD1 claim codes are 1. She will not reach the first Canada Pension Plan or Employment Insurance annual maximums this pay period.
Required: Calculate the employee's net pay, following the order of the steps in the net pay template.
EXHIBIT A - Net Pay Template (Fill in all blanks)
STATUTORY DEDUCTIONS
OTHER DEDUCTIONS
Given Data (Reference)
Step 1 - Calculate the employee's gross taxable earnings (GTE) for this pay.
[ _________________________________ ]
Step 2 - Calculate the pensionable earnings (PE).
[ _________________________________ ]
Step 3 - Calculate the insurable earnings (IE).
[ _________________________________ ]
Step 4 - Calculate the net taxable income (CRA) (NTI).
[ _________________________________ ]
Step 5 - Calculate the net taxable income (RQ) (NTI).
[ _________________________________ ]
Step 6 - Calculate Diane's Canada Pension Plan contribution.
[ _________________________________ ]
Step 7 - Calculate Diane's Employment Insurance premium.
[ _________________________________ ]
Step 8 - Calculate Diane's Quebec Parental Insurance Plan premium.
[ _________________________________ ]
Step 9 - Determine Diane's federal income tax.
[ _________________________________ ]
Step 10 - Determine Diane's provincial income tax.
[ _________________________________ ]
Step 11 - Calculate Diane's total deductions (statutory + other).
[ _________________________________ ]
Step 12 - Calculate Diane's net pay.
[ _________________________________ ]
Correct Answer:
See the Explanation part for answer for each step.
Explanation:
Step 1 - Gross Taxable Earnings (GTE)
Salary per pay: 49,500 ÷ 24 = $2,062.50
Taxable car allowance: $50.00
Group term life taxable benefit:
Coverage = 2 × 49,500 = 99,000
Monthly premium = (99,000 ÷ 1,000) × 0.62 = 99 × 0.62 = 61.38
Semi-monthly benefit = 61.38 ÷ 2 = $30.69
GTE = $2,143.19
Step 2 - Pensionable Earnings (PE)
PE = $2,112.50 (2,062.50 + 50.00)
Step 3 - Insurable Earnings (IE)
IE = $2,112.50
Step 4 - Net Taxable Income (CRA) (NTI)
RPP = 5% × 2,062.50 = $103.13
Union dues = 2% × 2,062.50 = $41.25
NTI (CRA) = 2,143.19 # 103.13 # 41.25 = $1,998.81
Step 5 - Net Taxable Income (RQ)
$0.00
Step 6 - CPP (base CPP)
Period exemption = 3,500 ÷ 24 = $145.83
Contributory = 2,112.50 # 145.83 = $1,966.67
CPP = 1,966.67 × 5.95% = $117.02
CPP = $117.02
Step 6B - 2nd CPP (CPP2)
CPP2 = $0.00
Step 7 - EI premium
EI = 2,112.50 × 1.63% = $34.43
EI = $34.43
Step 8 - QPIP
$0.00
Step 9 - Federal income tax (CC1, semi-monthly)
$156.10
Step 10 - Alberta income tax (CC1, semi-monthly)
$73.20
Step 11 - Total deductions
Statutory: 117.02 + 34.43 + 156.10 + 73.20 = $380.75
Other: RPP 103.13 + Union 41.25 + United Way 20.00 + Social club 5.00 = $169.38 Total deductions = $550.13 Step 12 - Net pay Cash pay (salary + car allowance) = 2,062.50 + 50.00 = $2,112.50 Net pay = 2,112.50 # 550.13 = $1,562.37
In Block 6 of the Record of Employment, what pay period type is entered for employees who are paid salary plus regularly paid commission?
- A. Depends on the pay period frequency
- B. Monthly
- C. Irregular
- D. Weekly
Correct Answer: A 🗳️
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Rosa joined Avion Electronics in April 1983. Her employment was terminated on November 30, 2015 and she was paid a $62,500.00 retiring allowance. Rosa joined her company's pension plan in 1986 and was fully vested on termination of employment. Calculate the non-eligible portion of the retiring allowance.
Reveal Solution Discussion 0Correct Answer:
$32,000.00 non-eligible portion
Explanation:
CRA requires separating a retiring allowance into an eligible and non-eligible portion. The eligible portion is the maximum that can be transferred to an RRSP/RPP under the special rules (without using regular RRSP room). The formula is: $2,000 for each year (or part-year) of service before 1996, plus an additional $1,500 for each year (or part-year) before 1989 in which the employee had no employer pension/DPSP benefit vested at the time of payment (or previously paid).
Rosa worked from 1983 to 1995 (inclusive) for pre-1996 service: 13 years × $2,000 = $26,000.
For the extra pre-1989 amount: she joined the pension plan in 1986 and was fully vested when paid the retiring allowance in 2015, so 1986-1988 do not qualify for the extra $1,500. However, 1983-1985 were years before 1989 when she had no vested employer pension benefit, so 3 years × $1,500 = $4,500.
Eligible portion = $26,000 + $4,500 = $30,500.
Non-eligible portion = $62,500 # $30,500 = $32,000.
The deduction for living in a prescribed zone can be claimed by residents of which jurisdictions?
- A. New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island
- B. All Canadian provinces and territories
- C. Alberta, Saskatchewan and Manitoba
- D. Northwest Territories, Nunavut and Yukon
Correct Answer: B 🗳️
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Matt earns $10.10 per hour and works 37.5 hours per week. Calculate Matt's regular bi-weekly earnings.
Reveal Solution Discussion 0Correct Answer:
$757.50
Explanation:
Regular earnings for an hourly employee are calculated as hourly rate × hours worked. Because "bi-weekly" means two weeks of work paid together, you calculate one week's regular earnings and then multiply by two (assuming the hours are the same each week and there is no overtime premium indicated).
Step 1: Weekly regular earnings:
$10.10 × 37.5 hours = $10.10 × 37 + $10.10 × 0.5
= $373.70 + $5.05
= $378.75.
Step 2: Bi-weekly regular earnings (2 weeks):
$378.75 × 2 = $757.50.
So Matt's regular bi-weekly earnings are $757.50.
In payroll documentation, "regular earnings" are the employee's base wages before statutory deductions (CPP
/QPP, EI, income tax) and before other deductions, and they exclude any separately calculated earnings like overtime premiums or taxable benefits unless stated. This approach (rate × hours, then adjust for pay period) is the standard method used to compute gross/regular pay for hourly employees before moving on to deductions and net pay.
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