National Payroll Institute PF1 : Payroll Fundamentals 1Exam

Exam Code: PF1

Exam Name: Payroll Fundamentals 1Exam

Updated: Aug 23, 2026

Q & A: 75 Questions and Answers

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National Payroll Institute PF1 Exam Syllabus Topics:

SectionObjectives
Topic 1: Payroll Records and Compliance Reporting- Recordkeeping requirements
  • 1. Employee payroll records
    • 2. Retention requirements
      - Government reporting
      • 1. Year-end reporting (T4 slips)
        • 2. Remittance reporting processes
          Topic 2: Payroll Fundamentals and Compliance Framework- Payroll system overview in Canada
          • 1. Employer payroll obligations
            • 2. Payroll process cycle (gross-to-net)
              - Payroll legislation and regulatory bodies
              • 1. Canada Pension Plan (CPP) requirements
                • 2. Income Tax Act basics
                  • 3. Employment Insurance (EI) rules
                    Topic 3: Earnings, Deductions, and Taxation- Deductions and remittances
                    • 1. Employer remittance responsibilities
                      • 2. Voluntary deductions
                        • 3. Statutory deductions
                          - Types of earnings
                          • 1. Regular wages and salaries
                            • 2. Taxable benefits
                              • 3. Overtime and special payments

                                National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

                                1. Which statutory deductions is salary continuance subject to?

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


                                2. A retiring allowance includes:

                                A) Accumulated overtime
                                B) Bonus or incentive pay
                                C) Payments in recognition of long service
                                D) Vacation pay


                                3. A Third Party Demand is issued by the Canada Revenue Agency for:

                                A) Outstanding child support and/or maintenance payments
                                B) A debt owed to a third party creditor
                                C) Unpaid income taxes or unpaid statutory deductions
                                D) Overpaid Employment Insurance benefits


                                4. Anne Massy works for Liberty Promotions in Nunavut and is provided with a company-leased automobile.
                                The automobile was in Anne's possession for 365 days. Of the 34,134 kilometres driven, 15,805 kilometres were for business purposes. The monthly lease cost of the vehicle was $198.60, excluding GST calculated at
                                5%. Anne requested in writing that Liberty Promotions use the optional operating cost method if all conditions apply. She did not reimburse the company for any of the expenses associated with the automobile.
                                Calculate Anne's annual automobile taxable benefit.


                                5. Select the correct order of priority for withholding payroll deductions from an employee's earnings.

                                A) Statutory deductions, legal deductions, union deductions, company-compulsory deductions, voluntary deductions
                                B) Union deductions, statutory deductions, legal deductions, company-compulsory deductions, voluntary deductions
                                C) Company-compulsory deductions, union deductions, statutory deductions, legal deductions, voluntary deductions
                                D) Statutory deductions, union deductions, legal deductions, company-compulsory deductions, voluntary deductions


                                Solutions:

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

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