Step 1: Select "Employees" from the main menu.

Step 2: Select an employee from the " All Employees" list.

Step 3: Select the "Taxes" option from "Employees" & scroll down to "Other Criteria"
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Check "Tax-Free Threshold Claimed" if the employee is claiming Tax-Free Threshold at your organisation.

Uncheck "Tax-Free Threshold Claimed" if the employee is not claiming for Tax-Free Threshold at your organisation.
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Step 4: Click on "Save" to update the changes.

Tax Withheld Calculations:
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Here are the scales according to which tax withheld is calculated for gross income equivalent to these weekly amounts. Apart from the tax-free threshold, there are other tax offsets that can be selected specifically for the employee. Tax withheld for the employee for every pay run varies based on all of these offsets together.
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Scales 1 and 2 differentiate tax amounts to be withheld for employees without and with tax-free threshold checked, respectively. Further on the total tax amount withheld (Y) is dependent on the employee's gross income (X) based on the formula Y = aX-b.