Personal Allowance

Hi there, shabrilakhani.

In QuickBooks Online, tax is calculated based on how you set up your employee's profile (Tax code and Tax calculation method). To ensure you have the correct information, I recommend contacting the HMRC. They can provide the exact tax code and taxation method for the exemption.

Once you have the information handy, edit the employee's profile by following these steps:

1. Go to Payroll > Employees.
2. Click the employee's name and select the Tax information section to add the Tax code and Tax calculation method.
3. Hit Save.

Here's a sample screenshot for a visual reference:

You can read this article as a guide: Edit employees in QuickBooks Online Standard Payroll (UK). I'm also adding this link for more details: Income Tax rates and Personal Allowances.

You can always get back to me if you have any follow-up questions or other concerns. Take care!