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FICA taxes apply to most wages, including regular pay, overtime, bonuses, and tips (when exceeding $20 per month). However, certain qualified reimbursements such as tax-exempt moving expenses are excluded from wages and therefore not subject to FICA. CPP candidates must know which payments are taxable for FICA to ensure accurate wage reporting.

Pay registers detail gross wages, deductions, taxes, and net pay. Auditors use them to verify whether payroll calculations are accurate and compliant with laws. I-9 forms confirm work eligibility, policies are set elsewhere, and deposit schedules are compliance tasks, not audit checks. CPP candidates must recognize key payroll documents used in audits.

Step 1: Regular = 40 × $21 = $840.

Step 2: Overtime = 8 × ($21 × 1.5) = 8 × $31.50 = $252.

Step 3: Total = $840 + $252 = $1,092.00.

CPP candidates must calculate overtime precisely, since these questions frequently appear on the exam.

The first step in preparing for a payroll audit is to review payroll policies, procedures, and records to ensure compliance and accuracy. This allows the payroll team to identify and correct errors before auditors review them. Notifying employees or submitting returns occurs later, and changing software prematurely is unnecessary. CPP candidates must know proper audit preparation steps to manage compliance risk.

HR–Payroll system integration ensures employment status updates (hires, terminations, transfers) flow automatically, preventing errors such as paying ineligible or terminated employees. Bank reconciliations and automation support compliance but do not prevent ghost employee payments. CPP candidates must understand the importance of integration in payroll accuracy.