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Quiz: Calculating what to withhold

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1 A payroll clerk runs a one-off bonus through the ordinary periodic withholding tables. What is the effect? It under-withholds, because the tables assume a lower annual income It over-withholds income tax, because the tables treat the amount as recurring each period It has no effect on income tax but distorts CPP The withholding is correct; the tables handle any amount

Answer key unconfirmed — rests on 2 unverified claims.

2 An employee files a revised TD1 claiming additional amounts. What does it change? Income tax, CPP and EI Nothing until the start of the next calendar year Income tax withholding only — the TD1 does not affect CPP contributions or EI premiums Income tax and CPP, but not EI

Answer key unconfirmed — rests on 2 unverified claims.

3 What does CRA publish to support calculating source deductions? Select all that apply.

Select all that apply.

Pre-filled TD1 forms based on the employee's prior return Formulas for computer programs Payroll deductions tables by jurisdiction and pay period A separate method for bonuses and retroactive pay increases An online payroll deductions calculator

Answer key unconfirmed — rests on 2 unverified claims.

4 An employee reaches the annual CPP maximum in October. What happens for the rest of the year? Contributions continue and the excess is credited against income tax withholding Contributions continue and the excess is refunded to the employer Contributions cease for the remainder of the year Contributions continue at a reduced rate

Answer key unconfirmed — rests on 1 unverified claim.

5 An employee worked for two employers and over-contributed to CPP across the year. How is that resolved? It is resolved when the employee files their return, not by the employers The second employer stops withholding once told about the first The employers coordinate and one refunds the excess CRA refunds the employers, who pass it to the employee

Answer key unconfirmed — rests on 1 unverified claim.

6 An employer discovers it under-withheld CPP for several months. Can it simply take the shortfall out of the employee's next pay? No — the employee portion is simply written off Yes, provided the employee agrees in writing Yes, in full, at the next available pay The employer is liable for the amounts including the employee portion, and its ability to recover that portion from later pay is limited by CRA's rules

Answer key unconfirmed — rests on 1 unverified claim.

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