Withholding Exempt Payroll Items

Thanks for getting in touch with the Community, alam555.

There's a Payroll Item Type you can use titled Nontaxable Per Diem. If that doesn't fit your situation, you can set an employee's withholding statuses from your Payroll screen if necessary.

Here's how:
 

1. In the left navigation bar, go to Payroll, then Employees.
2. Find an employee and click their display name.
3. From their Tax withholding section, click Edit.
4. Specify an applicable Federal W-4 form if prompted.
5. In your Filing Status ▼ drop-down list, choose Exempt if applicable.
6. Use the Filing Status ▼ drop-down and pick Exempt if applicable.
7. Select Save.

I've also included a detailed resource about exempting employees from Federal or State Withholding which may come in handy moving forward: Exempt your employee from Federal or State Withholding

I'll be here to help if there's any additional questions. Have a wonderful Tuesday!