National Payroll Institute PF1 : Payroll Fundamentals 1Exam

PF1 real exams

Exam Code: PF1

Exam Name: Payroll Fundamentals 1Exam

Updated: Oct 21, 2026

Q & A: 75 Questions and Answers

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National Payroll Institute PF1 Exam Syllabus Topics:

SectionWeightObjectives
Communication and Compliance10%- Accuracy and documentation
  • 1. Record keeping and audit trails
    - Stakeholder communication
    • 1. Employee, government, third-party requirements
      Record of Employment (ROE)20%- ROE completion requirements
      • 1. Block-by-block reporting rules
        • 2. Insurable/pensionable earnings reporting
          - Submission and deadlines
          • 1. Electronic vs paper filing
            Individual Pay Calculations40%- Non-regular earnings
            • 1. Overtime, bonuses, retroactive pay
              • 2. Allowances, taxable benefits
                - Regular earnings
                • 1. Hourly, salary, commission calculations
                  • 2. Pay period types and frequency
                    Termination and Special Payments30%- Termination payments
                    • 1. Wages in lieu of notice, severance pay
                      • 2. Retiring allowances, death benefits
                        - Leaves and absences
                        • 1. Sick leave, maternity/parental leave payments
                          • 2. Vacation pay, statutory holidays

                            National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

                            Question #1

                            Which of the following types of payments made by a private organization would not be subject to all statutory deductions?

                            • A. Performance bonus
                            • B. Retroactive adjustment
                            • C. Vacation pay when no time was taken
                            • D. Directors' fees
                            Reveal Solution  Discussion  0

                            Correct Answer: D  🗳️

                            Explanation: Only visible for Prep4pass members. You can sign-up / login (it's free).

                            Question #2

                            Duncan Drapak was employed in Ontario. Upon termination of his employment, he will be paid $7,760.00 legislated wages in lieu of notice together with his final weekly pay of $875.00. Calculate Duncan's Canada Pension Plan (CPP) contribution if the yearly maximum contribution will not be exceeded.

                            Reveal Solution  Discussion  0

                            Correct Answer:

                            $509.78
                            Explanation:
                            Legislated wages in lieu of notice are treated as pensionable employment earnings for CPP purposes, so they are included with the employee's final regular pay when calculating CPP deductions (assuming no CPP exemption applies).
                            Step 1: Determine total pensionable earnings for the week:
                            $7,760.00 + $875.00 = $8,635.00.
                            Step 2: Subtract the CPP basic exemption (Year's Basic Exemption is $3,500 annually). For a weekly payroll, the basic exemption is prorated:
                            $3,500 ÷ 52 = $67.31.
                            CPP contributory earnings for the week:
                            $8,635.00 # $67.31 = $8,567.69.
                            Step 3: Apply the 2026 CPP employee contribution rate of 5.95% (base CPP). The question states the annual maximum will not be exceeded, so no capping is required in this calculation.
                            CPP contribution:
                            $8,567.69 × 5.95% = $509.7777..., rounded to $509.78.

                            Question #3

                            The deduction for living in a prescribed zone can be claimed by residents of which jurisdictions?

                            • A. All Canadian provinces and territories
                            • B. Alberta, Saskatchewan and Manitoba
                            • C. Northwest Territories, Nunavut and Yukon
                            • D. New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island
                            Reveal Solution  Discussion  0

                            Correct Answer: A  🗳️

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                            Question #4

                            A paper Record of Employment must be issued:

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

                            Correct Answer: A  🗳️

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                            Question #5

                            A retiring allowance includes:

                            • A. Accumulated overtime
                            • B. Bonus or incentive pay
                            • C. Payments in recognition of long service
                            • D. Vacation pay
                            Reveal Solution  Discussion  0

                            Correct Answer: C  🗳️

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