Health services fund contributions are not collected on:

• A. salary
• B. retiring allowances
• C. vacation pay
• D. bonuses

Answer: (B)

Health Services Fund contributions are tied to remuneration that employees earn for the work they perform. Regular compensation such as salary, vacation pay, and bonuses reflects ongoing work and is included in the fund to help cover health services. Retiring allowances, on the other hand, are payments tied to the end of employment rather than to work performed during a period. They’re treated as a severance or post-employment benefit rather than as current earnings, so they aren’t subject to Health Services Fund contributions. In payroll practice, you’d calculate HSF on the ordinary earnings components (salary, vacation pay, bonuses) but exclude retiring allowances from the fund.