An employee's tax status is determined by the Tax profile, which can be setup from the Employment Details section of the employee setup file.
From the Employees screen, select the employee who's tax status you would like to change and click on the Edit icon.
Scroll down to the Employment Details section and choose the new Tax profile from the drop down menu. Click the Save icon to commit any changes. To set up a new Tax profile please visit the Set up new Tax profiles setup tutorial.
Once the Tax profile is changed, Indigo will recalculate the tax contributions owed for the whole payroll year based on the new tax profile.