National Payroll Institute Payroll Fundamentals 1Exam : PF1

  • Exam Code: PF1
  • Exam Name: Payroll Fundamentals 1Exam
  • Updated: Aug 16, 2026
  • Q & A: 75 Questions and Answers

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National Payroll Institute PF1 Exam Syllabus Topics:

SectionObjectives
Topic 1: Employment Income – Allowances, Expenses and Benefits- Taxable and non-taxable benefits
  • 1. Benefit taxation
  • 2. Allowances and reimbursements
Topic 2: Non-Statutory Deductions- Voluntary deductions
  • 1. Benefit premiums
  • 2. Union dues
Topic 3: New Employee Information- Employee setup and documentation
  • 1. Federal and provincial tax forms
  • 2. Payroll records management
Topic 4: Termination of Employment- Termination processing
  • 1. Termination pay calculations
  • 2. Severance payments
Topic 5: Payroll Accounting- Payroll accounting practices
  • 1. Journal entries
  • 2. Payroll reconciliations
Topic 6: Workers’ Compensation- Workers compensation administration
  • 1. Premium calculations
  • 2. Employer reporting
Topic 7: Non-Regular Payments- Special payroll payments
  • 1. Vacation pay calculations
  • 2. Bonus payments
Topic 8: Employment Income – Regular Earnings- Regular payroll calculations
  • 1. Overtime calculations
  • 2. Salary and hourly wage calculations
Topic 9: Federal Remittances- Government remittance obligations
  • 1. Income tax remittances
  • 2. CPP and EI remittances
Topic 10: Year-End Processing- Federal and provincial year-end reporting
  • 1. T4 and RL-1 preparation
  • 2. Year-end reconciliations
Topic 11: Record of Employment- ROE processing
  • 1. ROE completion requirements
  • 2. Electronic filing
Topic 12: Provincial Remittances- Provincial payroll requirements
  • 1. Provincial reporting obligations
  • 2. Provincial payroll taxes
Topic 13: Commission Payments- Commission payroll processing
  • 1. Tax treatment of commissions
  • 2. Commission earnings calculations

National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

1. An employee has the use of a company-leased vehicle for both business and personal use. This is an example of:

A) A benefit
B) An allowance
C) An expense reimbursement
D) An earning


2. Dollar values attributed to something the employer has either provided to an employee or paid for on an employee's behalf are:

A) Benefits
B) Allowances
C) Expense reimbursements
D) Earnings


3. 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.


4. Vacation pay on termination would be recorded in which Block(s) on the Record of Employment?

A) Block 17A only
B) Blocks 15B, 15C P.P. 1 and 17A
C) It would not be recorded
D) Block 15B only


5. When would a Record of Employment be issued for an employee paid mainly by commission?

A) When the employment relationship has been severed
B) An employee mainly paid by commission is not entitled to receive a Record of Employment
C) When the employee has had seven consecutive calendar days without both work and insurable earnings
D) When the employee has not earned any commission after six months


Solutions:

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

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