National Payroll Institute PF1 : Payroll Fundamentals 1Exam

  • Exam Code: PF1
  • Exam Name: Payroll Fundamentals 1Exam
  • Updated: Oct 13, 2026
  • Q & A: 75 Questions and Answers

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National Payroll Institute PF1 Exam Syllabus Topics:

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

                                National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

                                Question #1

                                Helen is reimbursed for the cost of the protective clothing that is legally required for her job. The clothing she bought isnot supported by receiptsand is a reasonable reimbursement amount. This is considered:

                                • A. A taxable allowance
                                • B. A non-taxable allowance
                                • C. A cash taxable benefit
                                • D. None of the above
                                Reveal Solution  Discussion  0

                                Correct Answer: A  🗳️

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                                Question #2

                                How many pay periods will be used to calculate insurable earnings inBlock 15Bon the Record of Employment if the employee is paidweekly?

                                • A. Last14pay periods (or less if period of employment is shorter)
                                • B. Last7pay periods (or less if period of employment is shorter)
                                • C. Last27pay periods (or less if period of employment is shorter)
                                • D. Last13pay periods (or less if period of employment is shorter)
                                Reveal Solution  Discussion  0

                                Correct Answer: C  🗳️

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                                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. Northwest Territories, Nunavut and Yukon
                                • C. Alberta, Saskatchewan and Manitoba
                                • 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 premium payment for overtime hours worked or a rate per piece of goods produced is an example of:

                                • A. Benefits
                                • B. Allowances
                                • C. Expense reimbursements
                                • D. Earnings
                                Reveal Solution  Discussion  0

                                Correct Answer: D  🗳️

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                                Question #5

                                An employee in Ontario was paid a $25,000.00 retiring allowance. The eligible portion was $15,000.00 and was transferred to the employee's Registered Retirement Savings Plan (RRSP) by the employer. Calculate the income tax on the non-eligible portion.

                                • A. $5,000.00
                                • B. $7,250.00
                                • C. $2,000.00
                                • D. $1,000.00
                                Reveal Solution  Discussion  0

                                Correct Answer: C  🗳️

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