National Payroll Institute PF1 Exam : Payroll Fundamentals 1Exam

National Payroll Institute PF1 exam
  • Exam Code: PF1
  • Exam Name: Payroll Fundamentals 1Exam
  • Updated: Oct 16, 2026
  • Q & A: 75 Questions and Answers
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About National Payroll Institute PF1 Exam Questions

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National Payroll Institute PF1 Exam Syllabus Topics:

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

Before You Book PF1, Read This

The PF1 exam is how National Payroll Institute decides who earns the Payroll Fundamentals certification, positioned at the Intermediate level. It checks whether you can apply the National Payroll Institute Payroll Fundamentals 1Exam objectives to realistic problems — the skill employers are actually hiring for. It also sits within a broader certification ecosystem covering Payroll Compliance Professional (PCP), so the effort compounds across your career. In a crowded global market, that badge is a competitive edge you can point to.

The National Payroll Institute Payroll Fundamentals 1Exam blueprint spans 13 domains, led by Commission Payments, Termination of Employment, and Workers’ Compensation. Use the weightings as a budget: heavier domains earn heavier slices of your week. The full topic breakdown is in the exam topics section above — plan against it, not against hunches.

Passing National Payroll Institute Payroll Fundamentals 1Exam takes 65%, and each attempt costs USD 550-600 — retakes included, at full price. The rational strategy is arriving over-prepared: drill with VerifiedDumps practice questions until your timed scores clear the mark several sessions running, then register. You're not being timid; you're refusing to buy the same exam twice.

National Payroll Institute lists the National Payroll Institute Payroll Fundamentals 1Exam question formats as: Assignments, Discussion Activities, Midterm Exam, Final Exam, Remote Proctored Online Exam. Format shapes tactics — find the real question sentence inside long scenario stems before reading the details, and re-verify every selection on multi-answer items. VerifiedDumps's 75 practice questions exercise these formats until they feel like old acquaintances.

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National Payroll Institute Payroll Fundamentals 1Exam Sample Questions:

Question #1

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

  • A. An earning
  • B. An allowance
  • C. A benefit
  • D. An expense reimbursement
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Question #2

Which of the following is not correct?

  • A. Severance payments and retiring allowances are not reported in Block 15B
  • B. Bonus payments reported in Block 17C are also reported in Block 15B
  • C. Block 15B is not completed when insurable earnings are reported in Block 15C
  • D. Vacation pay reported in Block 17A is reported in Block 15B
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Question #3

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 #4

A paper Record of Employment must be issued:

  • A. Within five calendar days of an interruption of earnings
  • B. When requested by Service Canada
  • C. When an employer becomes aware of an interruption of earnings exceeding seven calendar days
  • D. All of the above
Reveal Solution  Discussion  0

Correct Answer: D  🗳️

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Question #5

A premium payment for overtime hours worked or a rate per piece of goods produced is an example of:

  • A. Allowances
  • B. Benefits
  • C. Earnings
  • D. Expense reimbursements
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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