Preview Questions Payroll Administrator | Role Specific Skill

Question 1: How do you ensure that payroll taxes are withheld correctly for employees who qualify for tax credits, such as the Earned Income Tax Credit (EITC)?

Which action should you take?

Choose only one option

By applying a flat withholding rate to all employees, ignoring tax credits

By excluding tax credits from payroll tax calculations entirely

By configuring the payroll system to apply the appropriate credits and adjusting withholding accordingly based on employee eligibility

By assuming employees will claim credits on their personal tax returns without adjusting payroll withholding

Question 2: What action should be taken when an employee has mistakenly received overpayment in a payroll cycle at a university?

Which action should you take?

Choose only one option

Notify the employee, adjust the next payroll, and recover the overpayment.

Let the employee keep the overpayment, as no action is required.

Ignore the mistake and proceed with the regular payroll cycle.

Delay adjusting the overpayment until the next fiscal year for financial reporting purposes.

Question 3: How do you ensure that your payroll system is secure, particularly in protecting sensitive employee data such as social security numbers and bank account details?

Which action should you take?

Choose only one option

By limiting access to payroll information but not encrypting sensitive data

By outsourcing payroll security to external vendors without reviewing their practices

By storing sensitive data in unsecured formats for ease of access

By implementing role-based access controls, encrypting sensitive data, and conducting regular security audits

Question 4: How do you calculate the salary for an employee working on multiple contracts (e.g., part-time teaching and administrative work) at a university?

Which action should you take?

Choose only one option

Calculate each contract's salary separately and add them together.

Allocate a percentage of salary based on time worked in each role.

Average the salaries from each contract and calculate the total salary.

Pay the employee based on the highest paying contract only.

Question 5: What is the key difference between FICA (Federal Insurance Contributions Act) and FUTA (Federal Unemployment Tax Act) in payroll processing?

Which action should you take?

Choose only one option

FUTA taxes apply only to employees in government sectors, while FICA applies to private-sector employees.

FICA taxes fund Social Security and Medicare, while FUTA taxes fund unemployment benefits.

FICA taxes fund federal unemployment benefits, while FUTA taxes fund Medicare and Social Security.

FUTA taxes are optional for educational institutions, while FICA is mandatory.

Question 6: How do you manage and update payroll records when employees receive retroactive pay adjustments, ensuring accurate documentation and reporting?

Which action should you take?

Choose only one option

By excluding retroactive adjustments from payroll until they are raised in audits

By adding retroactive adjustments into the current payroll cycle without reviewing previous records

By updating payroll records for future pay cycles only and ignoring past discrepancies

By maintaining detailed documentation of retroactive adjustments, updating payroll records for the correct periods, and generating accurate reports