Two ways to clear the IT3a Reason code exception:

1. Directly on the employee masterfile screen.
2. When closing the Exception report.

Adding the reason code the masterfile.

1. Go to Edit and click Employee Masterfile.
2. Click the magnifying glass and select the employee you want to enter the reason code for.
3. Click the Tax Tab.
4. Click the IT3(a) Reason Code drop-down and select the reason why this employee doesn’t pay PAYE:

Adding the reason code after closing the exception report

1. Click View then Statutory Reports.
2. Select IRP5/IT3a Exception Report.
3. On the filter screen, filter for all of your employees (everyone to appear the Right-hand side).
4. Click the Print To drop-down and select Screen.
5. Click the Print Status drop-down and select Both.
6. Click Yes, choose the reason the employees aren’t paying PAYE (for example, income below threshold), and save.

NOTE: We can’t advise you on which reason to select. It’s usually because the employee earns below the tax threshold. If unsure, check with your Tax Practitioner.