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National Payroll Institute PF1 : Payroll Fundamentals 1Exam

PF1

Exam Code: PF1

Exam Name: Payroll Fundamentals 1Exam

Updated: Sep 11, 2026

Q & A: 75 Questions and Answers

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National Payroll Institute PF1 Exam Syllabus Topics:

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

National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

Question #1

A retiring allowance includes:

A. Legislated wages in lieu of notice in Quebec
B. Bonus or incentive pay
C. Vacation pay
D. None of the above
E. Accumulated overtime


Question #2

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.


Question #3

What is piecework?

A. A rate of pay earned per unit of production, regardless of the length of time taken
B. Earnings which are based on the amount of time worked, usually at a rate per hour or per day
C. A fixed amount of earnings paid to an employee per pay period, regardless of the number of hours worked or the production they accomplished
D. All of the above


Question #4

Which statutory deductions is salary continuance subject to?

A. All deductions except Employment Insurance premiums
B. All deductions except Employment Insurance and Quebec Parental Insurance Plan premiums
C. All deductions except Quebec Parental Insurance Plan premiums
D. All deductions


Question #5

Paul Westin works for an Alberta organization and receives a regular salary of $1,800.00 semi-monthly. He will be receiving a payout of accrued vacation with no time taken of $1,400.00 on a separate cheque. He has federal and provincial TD1s on file with claim code 1. Calculate the income taxes to be withheld on his vacation pay.


Solutions:

Question #1
Answer: D
Question #2
Answer: Only visible for members
Question #3
Answer: A
Question #4
Answer: D
Question #5
Answer: Only visible for members

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