National Payroll Institute PF1 real exam prep : Payroll Fundamentals 1Exam

  • Exam Code: PF1
  • Exam Name: Payroll Fundamentals 1Exam
  • Updated: Oct 12, 2026
  • Q&As: 75 Questions and Answers

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PF1 exam dumps

National Payroll Institute PF1 Exam Syllabus Topics:

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

                            National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

                            Question #1

                            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 #2

                            Duncan Drapak was employed in Ontario. Upon termination of his employment, he will be paid $7,760.00 legislated wages in lieu of notice together with his final weekly pay of $875.00. Calculate Duncan's Canada Pension Plan (CPP) contribution if the yearly maximum contribution will not be exceeded.

                            Reveal Solution  Discussion  0

                            Correct Answer:

                            $509.78
                            Explanation:
                            Legislated wages in lieu of notice are treated as pensionable employment earnings for CPP purposes, so they are included with the employee's final regular pay when calculating CPP deductions (assuming no CPP exemption applies).
                            Step 1: Determine total pensionable earnings for the week:
                            $7,760.00 + $875.00 = $8,635.00.
                            Step 2: Subtract the CPP basic exemption (Year's Basic Exemption is $3,500 annually). For a weekly payroll, the basic exemption is prorated:
                            $3,500 ÷ 52 = $67.31.
                            CPP contributory earnings for the week:
                            $8,635.00 # $67.31 = $8,567.69.
                            Step 3: Apply the 2026 CPP employee contribution rate of 5.95% (base CPP). The question states the annual maximum will not be exceeded, so no capping is required in this calculation.
                            CPP contribution:
                            $8,567.69 × 5.95% = $509.7777..., rounded to $509.78.

                            Question #3

                            In Block 6 of the Record of Employment, what pay period type is entered for employees who are paid salary plus regularly paid commission?

                            • A. Depends on the pay period frequency
                            • B. Weekly
                            • C. Monthly
                            • D. Irregular
                            Reveal Solution  Discussion  0

                            Correct Answer: A  🗳️

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                            Question #4

                            A retiring allowance includes:

                            • A. Accumulated overtime
                            • B. Vacation pay
                            • C. None of the above
                            • D. Bonus or incentive pay
                            • E. Legislated wages in lieu of notice in Quebec
                            Reveal Solution  Discussion  0

                            Correct Answer: C  🗳️

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                            Question #5

                            Feraz Dalia is due $12,523.00 in legislated wages in lieu of notice that will be added to his last weekly pay of
                            $1,080.00. Calculate Feraz's Employment Insurance (EI) premium, if his employer is situated in Saskatchewan and the yearly maximum contribution will not be exceeded.

                            Reveal Solution  Discussion  0

                            Correct Answer:

                            $221.73 (employee EI premium)
                            Explanation:
                            In Saskatchewan (outside Quebec), EI premiums are deducted at the 2026 employee EI premium rate of $1.63 per $100 of insurable earnings (1.63%).
                            CRA guidance confirms that wages in lieu of termination notice are subject to EI premiums, and to determine statutory deductions you include the wages in lieu with the regular income (if any) for the pay period.
                            Step 1: Determine total insurable earnings in the final pay (assuming both amounts are insurable and the annual maximum won't be exceeded):
                            $12,523.00 + $1,080.00 = $13,603.00.
                            Step 2: Calculate EI premium:
                            $13,603.00 × 1.63% = $13,603.00 × 0.0163 = $221.7289, which rounds to $221.73.
                            So, the EI premium to deduct from Feraz's pay for this combined payment is $221.73.

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