Payroll Certification Review Course PAYO Exam Spring 2026

Flashcards covering key concepts from the Payroll Certification Review course, focusing on worker classification, relevant forms, and laws affecting payroll.

Worker Misclassification

Determination of worker status that must be correctly classified as either employee or independent contractor by the employer.

Employee (EE)

A worker who has specific qualifications and rights under employment law, including those paid through payroll, given instructions, and under employer's control.

Independent Contractor

A self-employed individual who is paid by the job, sets their own hours, and typically works for multiple employers.

Form 1099-NEC

Form used to report nonemployee compensation for payments made to independent contractors.

Common Law Test

A test that measures the degree of control an employer has over a worker to determine if they are classified as an employee.

Statutory Employees

Workers who are not considered common law employees but are treated as employees for certain tax purposes.

E-Verify

A web-based system that allows employers to confirm the eligibility of their employees to work in the U.S.

Reasonable Basis Test

A test under §530 of the Revenue Act of 1978 that allows an employer to treat a worker as an independent contractor under certain conditions.

Form I-9

A form used to verify the identity and employment eligibility of individuals hired for employment in the United States.

ABC Test

A state law test used to determine the eligibility of workers for unemployment insurance based on the level of control and independence.

Taxpayer Identification Number (TIN)

A number used by the IRS to identify individuals for tax purposes, required for reporting payments on Form 1099.

Federal Income Tax (FIT)

Tax levied on an individual's income by the federal government, which employers are responsible for withholding from employees.