To remove an existing exemption in Zenefits:
Please contact us to retroactively remove an exemption. Depending on the type of exemption and when it is removed, Zenefits Payroll may need to edit the W-2, run a correction, or file an amendment for the company's taxes.
To mark an employee as exempt from one or more taxes in Zenefits Payroll:
Learn more about the rules for setting tax exemptions for employees in Zenefits Payroll.
Make sure to check with your tax advisor prior to changing the tax status of your employees. Penalties for improperly paid taxes may fall on your company and/or your employees.
When an employee is marked in Zenefits Payroll as exempt from a particular tax, Zenefits Payroll will exclude that employee's wages when calculating the company's payments for that tax and when reporting amounts for that tax on the company's returns. If there's an employee-paid portion of the tax (e.g., for Social Security), the employee will not see the tax withheld from their paycheck or on their W-2.
For example, let's say a non-US resident employee with a J-1 work visa is marked as exempt from Social Security taxes in Zenefits Payroll:
There are two ways to claim exempt:
Zenefits Payroll supports marking employees as exempt from withholding only, but only for Federal Income Tax.
Learn more about what happens when an employee is marked as exempt in Zenefits Payroll.