Withholding information identifies how the employee will be taxed during payroll entry. The employee's filing status, allowances, and additional withholding amounts are maintained for Federal, State and Local payroll fields. This information can be obtained from the employee's Federal W-4 form and other withholding records. You can establish the percentage of gross pay that the employee wants to contribute to a 401(k) plan, if appropriate. The Special 1 and Special 2 fields are available if you want to customize your payroll setup. For example, you can use Special 1 to set up an employee contribution rate for labor union dues. Tell me more about setting up labor tax or union dues withholding.