Question

True / False
1. ____Employment Insurance is withheld from employees' wages at the rate of 1.58% on only
the first $100 earned weekly.
2. ____ An employer incurs a Canada Pension Plan expense equal to the sum of the CPP
withheld from the wages of all its employees.
3. ____Canada Pension Plan is levied equally on the employee and the employer.
4. ____Employment Insurance is withheld from wages earned, with the withholding to stop in
2020 as soon as the employee has earned $57,800.
5. ____Since payroll taxes are levied on wages actually paid, there is no legal liability for payroll
taxes associated with the accrual of wages.
6. ____ Employers and employees both must pay Employment Insurance based on a percentage
of the employees' total wages, up to a yearly maximum.
7. ____Federal income taxes are withheld from wages earned, except the withholding stops each
year as soon as the employee has earned more than $200,000.
8. ____Federal income taxes withheld from an employee's wages are expenses of the employee,
not the employer, they should not be treated as liabilities of the employer.
9. ____In accounting for payrolls, the Payroll Register is a book of original entry which is used
for journalizing payroll information.
10. ____The amount of federal income tax to be withheld from each employee's wages is
determined solely by the amount of wages earned.
11. ____According to law, a T-4 form showing wages earned and taxes withheld must be given
to each employee within two months after the calendar year-end.
12. ____Canada Pension Plan is withheld from wages earned, except the withholding stops each
year as soon as the employee has earned the maximum pensionable earnings for that year.
13. ____ Canada Pension Plan deductions are taxes to provide support to employees during lay
off, illness or maternity.
14. ____Employment Insurance is levied equally on the employee and the employer.

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15. ____The same form is used to report both the employer share of payroll taxes and employee
income taxes withheld.
16. ____Employee income taxes are paid solely by employers based on a percentage of total
wages earned by the employee.  
17. ____Payroll taxes levied on employers include Canada Pension and Employment Insurance.
18. ____Worker’s compensation plans are for the benefit of the employees but are paid for by
the employers.
19. ____Vacation pay is not subject to income tax deductions.
20. ____The entries for payroll transactions are recorded in the Payroll Register.

Answer 1

1. True

2. True

3. False

4. True

5. False

6. False

7. False

8. True

9. True

10. True

11. False

12. False

13. True

14. False

15. False

16. False

17. True

18. True

19. False

20. True.