Taxes: Setting up an employee who is exempt

Some employees are exempt from withholding or from one or more payroll taxes and are therefore not required by law to contribute to this tax in each payroll. We highly recommend you consult with a CPA or other tax professional to confirm if an employee is tax exempt before changing an employee's tax status.

You can turn off these taxes as you set up the employee. (If you have set up your company as a 501c3 organization, we automatically exempt your employees from FUTA.)

To add an employee tax exemption:

1. Go to the Employees tab.
2. Click Add an Employee.
3. Enter the employee's information and click Continue until you get to the Taxes & Exemptions page.
4. If this employee is exempt from Federal and/or State income tax withholding, choose Do Not Withhold as their Federal and/or State Filing Status.
5. In the Exemptions section, click Edit.
6. Select the taxes the employee doesn't have to pay.
7. Click Save.
8. Click OK.