National Payroll Institute PF1 : Payroll Fundamentals 1Exam

  • Exam Code: PF1
  • Exam Name: Payroll Fundamentals 1Exam
  • Updated: Oct 11, 2026
  • Q & A: 75 Questions and Answers

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National Payroll Institute PF1 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Communication and Compliance10%- Stakeholder communication
  • 1. Employee, government, third-party requirements
    - Accuracy and documentation
    • 1. Record keeping and audit trails
      Topic 2: Record of Employment (ROE)20%- Submission and deadlines
      • 1. Electronic vs paper filing
        - ROE completion requirements
        • 1. Insurable/pensionable earnings reporting
          • 2. Block-by-block reporting rules
            Topic 3: Termination and Special Payments30%- Termination payments
            • 1. Wages in lieu of notice, severance pay
              • 2. Retiring allowances, death benefits
                - Leaves and absences
                • 1. Vacation pay, statutory holidays
                  • 2. Sick leave, maternity/parental leave payments
                    Topic 4: Individual Pay Calculations40%- Regular earnings
                    • 1. Hourly, salary, commission calculations
                      • 2. Pay period types and frequency
                        - Non-regular earnings
                        • 1. Allowances, taxable benefits
                          • 2. Overtime, bonuses, retroactive pay

                            National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

                            Question #1

                            Evangeline earns $1,075.00 weekly plus $154.00 in overtime. Calculate Evangeline's Quebec Parental Insurance Plan (QPIP) premium.

                            Reveal Solution  Discussion  0

                            Correct Answer:

                            $5.28 (employee QPIP premium for the week)
                            Explanation:
                            QPIP premiums are calculated on an employee's insurable earnings in Quebec (up to the annual maximum insurable earnings). For 2026, Revenu Quebec shows the employee QPIP premium rate is 0.430% (0.00430) and the maximum insurable earnings are $103,000.
                            Step 1: Determine Evangeline's weekly insurable earnings (assuming all earnings are QPIP-insurable and the annual maximum will not be exceeded, as the question implies):
                            Regular earnings $1,075.00 + overtime $154.00 = $1,229.00.
                            Step 2: Apply the employee QPIP rate:
                            $1,229.00 × 0.430% = $1,229.00 × 0.00430 = $5.2847.
                            Step 3: Round to cents (standard payroll practice): $5.28.
                            Payroll would deduct $5.28 from Evangeline's pay for QPIP for that week and remit it along with other source deductions as required. The deduction continues until the employee reaches the annual QPIP maximum premium (based on the annual insurable earnings limit).

                            Question #2

                            The authorization for hiring form should contain a checklist to ensure the organization obtains all required information. What is an example of an item that could be on that checklist?

                            • A. A confidentiality agreement
                            • B. A completed T1213
                            • C. A clearance certificate
                            • D. Consent to withhold statutory deductions
                            Reveal Solution  Discussion  0

                            Correct Answer: A  🗳️

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                            Question #3

                            By the authority of which Act can the Canada Revenue Agency garnish the wages of an employee who has failed to pay Employment Insurance premiums, Canada Pension Plan contributions, or income tax deductions?

                            • A. The Income Tax Act
                            • B. The Creditors' Relief Act
                            • C. The Canada Pension Plan Act
                            • D. The Employment Insurance Act
                            Reveal Solution  Discussion  0

                            Correct Answer: A  🗳️

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                            Question #4

                            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.

                            Reveal Solution  Discussion  0

                            Correct Answer:

                            (total federal + Alberta tax): $173.48
                            Explanation:
                            Taxable gross for the period = $1,600.00 + $30.00 = $1,630.00 (a taxable allowance is included in income for tax withholding).
                            Using CRA T4032-AB (Biweekly, 26 pay periods) with claim code 2:
                            Federal tax at pay $1,630 falls in the $1,619-$1,635 range # CC2 = $107.35.
                            Alberta provincial tax at pay $1,630 falls in the $1,628-$1,644 range # CC2 = $46.55.
                            Subtotal tax from the tables = $107.35 + $46.55 = $153.90.
                            CRA notes these tax tables build in the tax credits for CPP/EI, so when CPP is not deducted (because annual max already reached), you must increase tax withholding accordingly.
                            CPP that would have been deducted this pay (using CRA rates/YBE):
                            Pensionable = $1,630 # ($3,500/26 = $134.62) = $1,495.38; CPP (4.95% + 1.00% = 5.95%) = $88.98.
                            Add back missing credits: Federal 14% × 88.98 = $12.46; Alberta 8% × 88.98 = $7.12 # total $19.58.
                            Final total tax = $153.90 + $19.58 = $173.48.

                            Question #5

                            Which of the following company-compulsory deductions would reduce the employee's gross taxable income for purposes of withholding income taxes?

                            • A. Employee payment of a portion of group benefit plan premiums
                            • B. All of the above
                            • C. Employee contributions to a group Registered Retirement Savings Plan (RRSP)
                            • D. Employee payment of provincial health care plan premiums
                            Reveal Solution  Discussion  0

                            Correct Answer: C  🗳️

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