The reason you are getting this exception is due to fact that there hasn’t been a reason specified as to why some of your employees aren’t paying tax.  The IT3a Reason code can be added in one of 2 ways:

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

Adding the reason code on the masterfile:

1. Click on Edit
2. Click on Employee Masterfile
3. Click on the magnifying glass and select the employee you want to enter the reason code for
4. Click on the Tax Tab
5. Click on the Drop Down nex to IT3(a) Reason Code and select the reason why this employee does not pay PAYE:
   

Adding the reason code after closing the exception report:

1. Click on View, Statutory Reports, IRP5/IT3a Exception Report
2. On the filter screen filter for all of your employees (everyone to appear on the Right hand side).
3. Click on the Print To drop down and select Screen, click on the Print Status drop down and select Both.
4. A Message ‘The IRP5/IT3a Exception report has detected that IT3a Reason Codes have not been specified for some employees. Do you wish to specify them now?’ Will come up.
5. Click on yes, select the reason why these employees aren’t paying PAYE (eg. Income below threshold) and save the changes.

NOTE: We can not advise you why the specific employee does not pay tax.  In most cases it it because the employees income is below the tax threshold - if however you are unsure about the reason please reach out to your Tax Practitioner.