You can run payroll for all employees or only selected employees. By default, payroll will be run for all employees. If you want to exclude/include some employees for payroll run, then choose Run Payroll For drop down option to Selected Employees.
Once Selected Employees option is chosen, you can see search & select employee option using which we can select employees for whom payroll need to processed, only for selected employees payroll will be processed for rest it'll be excluded from payroll process.
To know How to run payroll for some employees with tax and for others without tax?