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CPP Certified Payroll Professional Cheat Sheet

Practice this exam

Core Payroll Concepts

  • 24% of exam
  • Worker Status FLSA Hours Employment Taxes Benefits

Compliance / Research and Resources

  • 14% of exam
  • Deposits Forms Retention Multistate

Calculation of the Paycheck

  • 22% of exam
  • Gross-to-Net Federal Taxes Deductions Garnishments

Payroll Process and Supporting Systems

  • 14% of exam
  • Master File Controls Continuity Implementation

Payroll Administration and Management

  • 10% of exam
  • Policies Staffing Service Governance

Audits

  • 8% of exam
  • Audit Trail Segregation Reconciliation Exception Testing

Accounting

  • 8% of exam
  • Journal Entry Liabilities Accruals Reconcile

Quick Facts

  • Credential Certified Payroll Professional; PayrollOrg
  • Current outline Effective September 5, 2026
  • Questions 190 total; 165 scored, 25 pretest
  • Time 4 hours
  • Passing scale 300 scaled; no fixed raw percentage
  • Exam tax law Federal law: January 1, 2026
  • Core + calculation 24% + 22% = 46%
  • 2026 SS base $184,500
  • 2026 Medicare 1.45% each; no wage cap

Worker Status Factors D1

  • Behavior, finances, relationship
  • Control Investment Contract reality

Employee vs Contractor D1

Employee

  • Common-law control present
  • Withhold applicable employment taxes

Contractor

  • Independent business relationship
  • Report eligible nonemployee compensation
  • Substance controls over contract label

Worker Status and Tax Consequence D1

  • Company directs work details → Test employee classification ( Review common-law control factors )
  • Worker runs independent business → Test contractor classification ( Label alone never controls )
  • Status remains uncertain → Consider Form SS-8 ( IRS determination request )
  • Worker is employee → Apply payroll withholding ( Issue Form W-2 )
  • Worker is true contractor → Check Form 1099-NEC ( Apply reporting threshold )
  • Employee was misclassified → Assess employment-tax correction ( Check intentional-disregard facts )
  • Misclassification was unintentional → Evaluate IRC §3509 ( Required returns affect rates )
  • Social Security liability calculated → Apply annual wage base ( Medicare generally uncapped )

Worker Status D1

  • Employee Subject to applicable payroll withholding
  • Contractor Status depends on actual relationship
  • Common-law control Behavioral, financial, relationship factors
  • Form SS-8 IRS worker-status determination request
  • Form W-2 Employee wage statement
  • Form 1099-NEC Nonemployee compensation reporting
  • Exempt status Requires applicable duties and pay tests
  • Nonexempt status Eligible for FLSA overtime
  • IRC §3509 Unintentional misclassification; reduced employer liability
  • §3509 required returns filed FIT 1.5%; employee FICA factor 20%
  • §3509 required returns missing FIT 3%; employee FICA factor 40%
  • §3509 Social Security Still subject to annual wage base

Exempt vs Nonexempt D1

Exempt

  • Meet applicable duties test
  • Meet applicable pay requirements

Nonexempt

  • Track compensable hours
  • Pay overtime after 40 federally
  • Salary alone does not establish exemption

FLSA Hours D1

  • Workweek Fixed recurring 168-hour period
  • Federal overtime Nonexempt: over 40 weekly
  • Overtime rate At least 1.5× regular rate
  • Regular rate Included remuneration ÷ hours worked
  • Nondiscretionary bonus Generally included in regular rate
  • Discretionary bonus Excludable only when genuinely discretionary
  • Meal period Unpaid only when duty-free
  • Unauthorized work Compensate if employer permits
  • State law Apply more protective requirements

Taxable Benefits D1

  • Nonexcluded fringe FMV less employee payment
  • Accountable reimbursement Business nexus; substantiate; return excess
  • Nonaccountable allowance Usually taxable wages
  • Section 125 election Qualified pretax benefit treatment
  • 2% S-corp shareholder Special health-benefit income rules
  • Group-term life Imputed income above eligible $50k
  • Employer HSA contribution Generally excluded when qualified

Monthly vs Semiweekly Deposits D2

Monthly

  • Lookback ≤$50k
  • Following month’s 15th

Semiweekly

  • Lookback >$50k
  • Payday determines deposit day
  • $100k next-day rule overrides both

Federal Deposit Timing D2

  • Determine current deposit schedule → Check applicable lookback period ( Form 941 standard lookback )
  • Lookback tax ≤$50k → Monthly schedule ( Usually following month’s 15th )
  • Lookback tax >$50k → Semiweekly schedule ( Depends on payday weekday )
  • Semiweekly payday Wednesday–Friday → Deposit following Wednesday ( Business-day adjustments apply )
  • Semiweekly payday Saturday–Tuesday → Deposit following Friday ( Business-day adjustments apply )
  • Liability reaches $100k in period → Deposit next business day ( Overrides normal schedule )
  • Liability is FUTA → Apply separate FUTA rules ( Do not use 941 schedule )
  • Return preparation begins → Reconcile deposits with Form 941 ( Investigate mismatched liabilities )

Deposits D2

  • 941 lookback ≤$50k Monthly federal deposit schedule
  • 941 lookback >$50k Semiweekly federal deposit schedule
  • Monthly due Following month’s 15th
  • Wed–Fri payroll Semiweekly deposit next Wednesday
  • Sat–Tue payroll Semiweekly deposit next Friday
  • $100k liability Deposit next business day
  • Form 941 Quarterly employment-tax return
  • Form 940 Annual FUTA return
  • EFTPS Electronic federal tax payment

Forms and Retention D2

  • Form W-4 Employee federal withholding certificate
  • Form I-9 Employment eligibility verification
  • Form W-2 Annual employee wage statement
  • Form W-3 Transmittal of W-2 totals
  • Form 941-X Correct prior Form 941
  • IRS tax records Retain at least four years
  • FLSA payroll records Retain at least three years
  • FLSA computation records Retain at least two years
  • Escheatment Report unclaimed wages under state law

Pay Calculation Order D3

  • Gross, bases, taxes, orders, net
  • Gross Tax bases Withholding Deductions Net

Regular vs Supplemental Wages D3

Regular

  • Periodic ordinary pay
  • Apply W-4 withholding tables

Supplemental

  • Bonus, commission, other additions
  • Flat method requires conditions
  • FIT method differs; FICA still applies

Gross-to-Net Decision Route D3

  • Hourly nonexempt work exceeds 40 → Compute FLSA overtime ( Workweek; applicable state rule )
  • Bonus affects regular rate → Recompute overtime premium ( Nondiscretionary bonus generally included )
  • Benefit has statutory exclusion → Apply correct tax bases ( FIT and FICA may differ )
  • Pretax election is qualified → Adjust eligible taxable wages ( Do not reduce every tax automatically )
  • Employee W-4 is available → Apply 2026 Pub 15-T ( Choose correct withholding method )
  • Supplemental pay is identified → Select permitted withholding method ( Check prior regular-wage withholding )
  • FICA wages approach annual base → Cap Social Security only ( Medicare remains uncapped )
  • Employer-paid Medicare wages exceed $200k → Withhold additional 0.9% ( No employer matching amount )
  • Legal or voluntary deductions apply → Apply priority and limits ( Then calculate final net pay )

Federal Taxes D3

  • 2026 Social Security 6.2% employee; 6.2% employer
  • 2026 SS wage base $184,500 per employee
  • 2026 Medicare 1.45% each; no wage cap
  • Additional Medicare 0.9% employee-only withholding
  • Additional Medicare trigger Withhold on wages above $200k
  • FUTA base First $7k eligible annual wages
  • FUTA statutory rate 6% employer-only
  • FUTA net rate 0.6% with full credit
  • Federal income tax Use 2026 Pub 15-T

FICA vs FUTA D3

FICA

  • Employee and employer shares
  • SS cap; Medicare uncapped

FUTA

  • Employer-only unemployment tax
  • First $7k; credit conditional
  • Do not withhold FUTA from employees

Deduction and Garnishment Route D3

  • Required tax deductions apply → Subtract from earnings ( Then establish disposable earnings )
  • Ordinary garnishment applies → Compare both federal ceilings ( Use lesser permitted amount )
  • Multiple ordinary orders exist → Apply combined federal maximum ( Review priority and state law )
  • Child support order applies → Use support-specific cap ( Check arrears and dependents )
  • IRS wage levy applies → Use levy-specific exempt table ( Ordinary cap does not apply )
  • Voluntary deduction requested → Verify authorization ( Check FLSA and state restrictions )
  • State cap is stricter → Apply protective state rule ( Federal maximum is ceiling )
  • Order is unclear → Escalate before withholding ( Document interpretation and action )

Gross-to-Net D3

  • Gross pay Regular plus taxable additional pay
  • FIT wages Adjust gross for FIT-exempt items
  • FICA wages Check separate statutory exclusions
  • Pretax deduction Apply only to eligible tax bases
  • FIT withholding Compute using W-4 and tables
  • Net pay Cash gross less withholding and deductions
  • Supplemental flat rate 22% when conditions allow
  • Over $1m supplemental 37% on excess portion
  • Aggregate method Withhold on combined-period wages
  • Noncash fringe Taxable value is not cash payable

Gross vs Disposable Earnings D3

Gross

  • Compensation before deductions
  • Starts payroll calculation

Disposable

  • After legally required deductions
  • Basis for garnishment ceiling
  • Voluntary deductions do not define disposable

Deductions D3

  • Disposable earnings After legally required deductions
  • Ordinary garnishment Lesser of two federal ceilings
  • First ceiling 25% of disposable earnings
  • Second weekly ceiling Earnings exceeding 30× federal hourly minimum
  • Child support Different 50–65% federal limits
  • Tax levy Apply levy-specific exempt amount
  • Voluntary deduction Needs valid authorization and law
  • Deduction priority Check order and state law
  • Other pay periods Adjust protected earnings exemption accordingly
  • Prior garnishment Not deducted to establish disposable earnings

Master File D4

  • Master data Status, rate, tax, banking
  • Effective date Controls timing of payroll change
  • Input validation Reject invalid or missing fields
  • Dual approval Reduce unauthorized pay changes
  • Role-based access Limit sensitive payroll permissions
  • Change log Record who changed what
  • Interface control Reconcile source and target
  • Parallel run Compare old versus new outputs

Continuity D4

  • Payroll calendar Dates, cutoffs, approvals
  • Backup process Fallback for system outage
  • Recovery objective Required restoration time
  • Data protection Encrypt and restrict access
  • Vendor file Verify totals and receipt
  • Off-cycle payroll Controlled exception payment
  • Regression test Check changes against prior results

Management D5

  • Written policy Consistent treatment across cycles
  • Service metric Measure accuracy and timeliness
  • Escalation Route unresolved payroll issues
  • Training matrix Match skills to responsibilities
  • Succession cover Preserve critical payroll knowledge
  • Procedure owner Maintain and approve updates
  • Privacy Limit employee-data exposure
  • Nexus review Identify multistate obligations

Control Triad D6

  • Authorize, record, reconcile
  • Approval Audit trail Bank tie-out

Audit Controls D6

  • Segregation Separate setup, approval, payment
  • Audit trail Evidence every material change
  • Exception report Flag unusual hours or amounts
  • Variance test Compare to prior period
  • Ghost employee Detect unsupported payee
  • Bank reconciliation Match disbursements to bank
  • Third-party control Review vendor assurance and output
  • Correction log Track root cause and resolution

Year-End Tie-Out D7

  • Ledger, 941, W-2, deposits
  • General ledger Returns Statements Cash

Accounting D7

  • Gross wage expense Recognize earned compensation
  • Employee withholding Credit tax liability
  • Employer payroll tax Record separate expense
  • Net pay liability Amount owed to workers
  • Tax deposit Debit liability; credit cash
  • Accrued payroll Recognize earned unpaid wages
  • Form 941 tie-out Reconcile ledger and return
  • W-2 tie-out Reconcile annual wage totals
  • Clearing account Investigate uncleared balances

Common Traps

Score denominator

  • 165 scored plus 25 pretest ≠ 300 scaled; not 300 questions

Exam law year

  • Current outline starts Sep 2026 ≠ Tested federal law: Jan 2026

Overtime basis

  • Regular rate includes eligible bonus ≠ Base hourly rate may differ

SS and Medicare

  • Social Security capped at $184,500 ≠ Medicare has no wage base

Additional Medicare

  • Employer withholds above $200k wages ≠ No employer matching 0.9%

Supplemental withholding

  • 22% flat only when permitted ≠ 37% applies excess over $1m

FUTA credit

  • 0.6% assumes full 5.4% credit ≠ Credit reduction can raise net tax

Deposit frequency

  • Lookback determines normal schedule ≠ Accumulated $100k overrides schedule

Garnishment base

  • Disposable follows required deductions ≠ Voluntary deductions do not reduce base

State and federal

  • Federal rule sets baseline ≠ Stricter state rule may control

Last Minute

  • 1. Confirm 2026 seven-domain blueprint weights
  • 2. Classify worker under actual common-law control
  • 3. Test FLSA exemption and workweek hours
  • 4. Include nondiscretionary bonus in regular rate
  • 5. Separate FIT, Social Security, Medicare bases
  • 6. Cap 2026 Social Security at $184,500
  • 7. Withhold additional Medicare above $200k
  • 8. Apply supplemental withholding conditions before 22%
  • 9. Use lookback and $100k deposit override
  • 10. Calculate garnishment from disposable earnings
  • 11. Reconcile payroll ledger, deposits, 941, W-2
  • 12. Retain FLSA and IRS records correctly
  • 13. Verify approvals, interfaces, bank tie-outs
  • 14. Escalate multistate nexus and reciprocity

CPP Certified Payroll Professional

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