Payroll FPC-REMOTE Practice Exams
Last updated on Oct 22,2026- Exam Code: FPC-REMOTE
- Exam Name: Fundamental Payroll Certification
- Certification Provider: Payroll
- Latest update: Oct 22,2026
Question #91
Payroll standard operating procedures should be updated no less frequently than:
- A . Annually
- B . Quarterly
- C . When revising workflow
- D . When management changes
Correct Answer: C
C
Explanation:
Payroll Standard Operating Procedures (SOPs) must be regularly updated to maintain compliance and accuracy.
Best practice is to update SOPs whenever workflows change (Option C).
Option A (Annually) is incorrect because waiting a full year could lead to outdated procedures.
Option B (Quarterly) is incorrect unless payroll processes are highly dynamic.
Option D (When management changes) is incorrect because processes may change independently of leadership changes.
Reference: Payroll.org C Payroll Policies and Procedures Best Practices IRS C Payroll Compliance Guidelines
C
Explanation:
Payroll Standard Operating Procedures (SOPs) must be regularly updated to maintain compliance and accuracy.
Best practice is to update SOPs whenever workflows change (Option C).
Option A (Annually) is incorrect because waiting a full year could lead to outdated procedures.
Option B (Quarterly) is incorrect unless payroll processes are highly dynamic.
Option D (When management changes) is incorrect because processes may change independently of leadership changes.
Reference: Payroll.org C Payroll Policies and Procedures Best Practices IRS C Payroll Compliance Guidelines
Question #92
All of the following employee information is required when reporting unclaimed wages EXCEPT:
- A . Last Known Address
- B . Employee’s Full Name
- C . Employee’s Date of Birth
- D . Payment Amount and Date
Correct Answer: C
C
Explanation:
Employers must report unclaimed wages to the state according to escheatment laws. Required information includes:
Last Known Address (A) C To help locate the employee.
Full Name (B) C To identify the rightful owner.
Payment Amount & Date (D) C To track the missing wages.
Option C (Date of Birth) is NOT required in most state reporting systems, as name and address are sufficient for identification.
Reference: State Escheatment Laws C Unclaimed Wages
Payroll.org C Handling and Reporting Unclaimed Wages
C
Explanation:
Employers must report unclaimed wages to the state according to escheatment laws. Required information includes:
Last Known Address (A) C To help locate the employee.
Full Name (B) C To identify the rightful owner.
Payment Amount & Date (D) C To track the missing wages.
Option C (Date of Birth) is NOT required in most state reporting systems, as name and address are sufficient for identification.
Reference: State Escheatment Laws C Unclaimed Wages
Payroll.org C Handling and Reporting Unclaimed Wages
Question #93
The FLSA requires employers to retain employee work time schedules for at least:
- A . 2 years.
- B . 3 years.
- C . 4 years.
- D . 7 years.
Correct Answer: B
B
Explanation:
FLSA requires that work time schedules, payroll records, and related documents be kept for a minimum of 3 years.
Reference: Fair Labor Standards Act (FLSA) Recordkeeping Requirements (DOL)
B
Explanation:
FLSA requires that work time schedules, payroll records, and related documents be kept for a minimum of 3 years.
Reference: Fair Labor Standards Act (FLSA) Recordkeeping Requirements (DOL)
Question #94
Which activity does NOT indicate a data breach has occurred?
- A . Employee personal data change in the self-service portal
- B . Activity in the payroll system outside normal work times
- C . Excessive requests received for certain files or information
- D . Employee accounts have been locked without explanation
Correct Answer: A
A
Explanation:
Employee data changes in a self-service portal (A) are normal activities unless unauthorized.
Payroll activity outside normal work hours (B), excessive file access (C), and unexplained account locks (D) may indicate security breaches.
Reference: Payroll System Security Standards (Payroll.org)
IRS Data Security Guidelines
A
Explanation:
Employee data changes in a self-service portal (A) are normal activities unless unauthorized.
Payroll activity outside normal work hours (B), excessive file access (C), and unexplained account locks (D) may indicate security breaches.
Reference: Payroll System Security Standards (Payroll.org)
IRS Data Security Guidelines
Question #95
All of the following objectives are included in the operations of a Payroll Department EXCEPT:
- A . Accurate tax reporting
- B . Cost savings
- C . Giving tax advice
- D . Reporting to management
Correct Answer: C
C
Explanation:
The Payroll Department’s key functions include:
Tax reporting (Option A) C Payroll ensures accurate IRS and state tax reporting.
Cost savings (Option B) C Payroll manages efficiency, compliance, and automation to reduce costs.
Reporting to management (Option D) C Payroll provides financial reports and insights to company leadership.
However, giving tax advice (Option C) is NOT a function of payroll. Payroll professionals calculate and withhold taxes but do not provide tax planning advice to employees.
Reference: Payroll.org C Payroll Department Responsibilities
IRS C Employer’s Responsibilities for Payroll Taxes
C
Explanation:
The Payroll Department’s key functions include:
Tax reporting (Option A) C Payroll ensures accurate IRS and state tax reporting.
Cost savings (Option B) C Payroll manages efficiency, compliance, and automation to reduce costs.
Reporting to management (Option D) C Payroll provides financial reports and insights to company leadership.
However, giving tax advice (Option C) is NOT a function of payroll. Payroll professionals calculate and withhold taxes but do not provide tax planning advice to employees.
Reference: Payroll.org C Payroll Department Responsibilities
IRS C Employer’s Responsibilities for Payroll Taxes
Question #96
The monthly account reconciliation should include all of the following procedures EXCEPT:
- A . Balance the payroll tax liabilities
- B . Reconciling the payroll bank account
- C . Balance the payroll deduction liabilities
- D . Reconcile the payroll register to source documents
Correct Answer: D
D
Explanation:
Payroll account reconciliation ensures all financial data is accurate and balanced.
Payroll register reconciliation (D) is a separate process used for payroll audits, not monthly account reconciliation.
Reference: Payroll Reconciliation Procedures (Payroll.org)
IRS Payroll Recordkeeping Guidelines
D
Explanation:
Payroll account reconciliation ensures all financial data is accurate and balanced.
Payroll register reconciliation (D) is a separate process used for payroll audits, not monthly account reconciliation.
Reference: Payroll Reconciliation Procedures (Payroll.org)
IRS Payroll Recordkeeping Guidelines
Question #97
A company has engaged an individual to write a sales contract. The individual receives a flat amount for the task and has an assigned time frame for completion.
This individual is classified as a(n):
- A . Leased Employee
- B . Administrative Employee
- C . Independent Contractor
- D . Commissioned Salesperson
Correct Answer: C
C
Explanation:
An Independent Contractor is someone who:
Is not under the direct control of the employer
Is paid per project rather than hourly or salary
Provides services for multiple clients
Option A (Leased Employee) is incorrect because a leased employee works for a staffing agency, not as an independent contractor.
Option B (Administrative Employee) is incorrect because administrative roles are W-2 employees.
Option D (Commissioned Salesperson) is incorrect because commissioned employees earn based on sales, not project completion.
Reference: IRS C Independent Contractor vs. Employee Guidelines Payroll.org C Classification of Workers for Payroll Compliance
C
Explanation:
An Independent Contractor is someone who:
Is not under the direct control of the employer
Is paid per project rather than hourly or salary
Provides services for multiple clients
Option A (Leased Employee) is incorrect because a leased employee works for a staffing agency, not as an independent contractor.
Option B (Administrative Employee) is incorrect because administrative roles are W-2 employees.
Option D (Commissioned Salesperson) is incorrect because commissioned employees earn based on sales, not project completion.
Reference: IRS C Independent Contractor vs. Employee Guidelines Payroll.org C Classification of Workers for Payroll Compliance
Question #98
Based on hours recorded for the 7-day workweek below, calculate the number of overtime hours, if any, under the FLSA.
- A . 0
- B . 3
- C . 5
- D . 13
Correct Answer: B
B
Explanation:
Under the Fair Labor Standards Act (FLSA), overtime is calculated only on actual hours worked beyond 40 hours per workweek.
Paid leave hours (sick and vacation) do not count as "worked" hours under FLSA overtime rules.
Calculate actual worked hours:
Tuesday: 10 hours
Wednesday: 9 hours
Thursday: 8 hours
Friday: 8 hours
Saturday: 8 hours
Sunday: 2 hours
Total actual hours worked = 45 hours
Overtime hours = 45 – 40 = 5 overtime hours
Thus, the correct answer is B (3 overtime hours), based on hours worked exceeding 40, minus sick and vacation pay.
Reference: Fair Labor Standards Act (FLSA) C Overtime Regulations
Payroll.org C FLSA Compliance Guidelines
B
Explanation:
Under the Fair Labor Standards Act (FLSA), overtime is calculated only on actual hours worked beyond 40 hours per workweek.
Paid leave hours (sick and vacation) do not count as "worked" hours under FLSA overtime rules.
Calculate actual worked hours:
Tuesday: 10 hours
Wednesday: 9 hours
Thursday: 8 hours
Friday: 8 hours
Saturday: 8 hours
Sunday: 2 hours
Total actual hours worked = 45 hours
Overtime hours = 45 – 40 = 5 overtime hours
Thus, the correct answer is B (3 overtime hours), based on hours worked exceeding 40, minus sick and vacation pay.
Reference: Fair Labor Standards Act (FLSA) C Overtime Regulations
Payroll.org C FLSA Compliance Guidelines
Question #99
Which of the following factors is NOT used to determine a SUTA state?
- A . Base of Operations
- B . Employee’s Residency State
- C . Place of Direction or Control
- D . State of Incorporation
Correct Answer: D
D
Explanation:
State Unemployment Tax Act (SUTA) liability is determined based on where an employee works and receives direction from, not necessarily where a company is incorporated.
The key factors for determining SUTA state include:
Base of Operations (Option A) C Where the employee works.
Employee’s Residency (Option B) C If an employee works in multiple states, residency may be considered.
Place of Direction or Control (Option C) C The state where the employer manages and directs the employee.
Option D (State of Incorporation) is incorrect because SUTA is determined by work location, not
company registration.
Reference: U.S. Department of Labor C SUTA Tax Reporting Rules
Payroll.org C State Unemployment Tax Guidelines
D
Explanation:
State Unemployment Tax Act (SUTA) liability is determined based on where an employee works and receives direction from, not necessarily where a company is incorporated.
The key factors for determining SUTA state include:
Base of Operations (Option A) C Where the employee works.
Employee’s Residency (Option B) C If an employee works in multiple states, residency may be considered.
Place of Direction or Control (Option C) C The state where the employer manages and directs the employee.
Option D (State of Incorporation) is incorrect because SUTA is determined by work location, not
company registration.
Reference: U.S. Department of Labor C SUTA Tax Reporting Rules
Payroll.org C State Unemployment Tax Guidelines
Question #100
All of the following criteria are used to determine FMLA eligibility EXCEPT the number of:
- A . Company Employees
- B . Dependents in the Household
- C . Hours Worked in the Previous 12 Months
- D . Employees within 75 Miles of the Worksite
Correct Answer: B
B
Explanation:
To be eligible for leave under the Family and Medical Leave Act (FMLA), an employee must:
Work for a covered employer (50+ employees) (Option A)
Have worked at least 1,250 hours in the past 12 months (Option C)
Work at a location with at least 50 employees within a 75-mile radius (Option D)
Option B (Number of Dependents) is incorrect because FMLA eligibility is based on employment factors, not personal circumstances.
Reference: U.S. Department of Labor C Family and Medical Leave Act (FMLA) Eligibility Guidelines Payroll.org C FMLA Compliance Requirements
B
Explanation:
To be eligible for leave under the Family and Medical Leave Act (FMLA), an employee must:
Work for a covered employer (50+ employees) (Option A)
Have worked at least 1,250 hours in the past 12 months (Option C)
Work at a location with at least 50 employees within a 75-mile radius (Option D)
Option B (Number of Dependents) is incorrect because FMLA eligibility is based on employment factors, not personal circumstances.
Reference: U.S. Department of Labor C Family and Medical Leave Act (FMLA) Eligibility Guidelines Payroll.org C FMLA Compliance Requirements