Under Singapore’s income tax laws, all employers are required to file employee earnings and prepare certain tax forms for all their employees who are employed in Singapore, by 1st March every year. Employers can start submitting from 6 Jan and are encouraged to submit by 10 Feb to avoid the last minute rush. To all payroll administrators out there, here is a guide to help you with this process.
What is the Auto-Inclusion Scheme (AIS)?
Under this scheme, employers submit electronically the employment income information of their employees to IRAS. The submitted information will then be automatically included in the employees’ income tax assessment so that they do not need to declare these incomes themselves. You do not need to issue the same forms to your employees separately.
Companies under AIS
Participation in AIS is compulsory for all employers with 6 or more employees for the entire year ending 31 Dec 2020 or who have received the “Notice to File Employment Income of Employees Electronically”.
Companies not under AIS
Companies who are not required to file electronically can also join the AIS on an opt-in basis. The registration for YA 2021 will end on 31st December 2020 and registration for YA 2022 will begin in the 2nd quarter of the year.
For employers who are not under AIS, you’re required to provide the required forms to your employees by 1st March for them to file their income tax returns.
What are the required tax files?
- Form IR8A (for all employees)
- Appendix 8A (for payments of benefits-in-kind)
- Appendix 8B (gains from Employee Stock Option)
- Form IR8S (if excess CPF payments were made)
Please remember to submit these forms to IRAS by 1st March if you’re under AIS, or provide these forms to your employees by 1st March if you’re not.
Preparing for Submission
1. Authorise Staff/Payroll Vendor
If it’s your first time participating in AIS, you must first authorise staff or a third party to submit the employment income information on your behalf at CorpPass.
2. Preparing information for submission
Download the required tax forms from the IRAS website to check what information is required. If you are using a payroll software like JustPayroll, the tax forms can be automatically generated by the system.
How to Submit
1. Submitting with Payroll Software:
Direct Integration with IRAS (API Service)
Certain payroll software vendors like JustLogin are directly integrated with IRAS through API, allowing employers to validate and submit employment income information directly through their payroll software. This streamlines the submission process as you no long have to download the Validation and Submission Application.
IRAS strongly encourages SMEs to adopt payroll software for IRAS submission as it is the most convenient method. There are many programmes like the Productivity Solutions Grant (PSG) and the Digital Resilience Bonus (DRB) available to subsidise subscription of payroll software. You can learn more about the various grants here.
Validation and Submission Application (Only available until Dec 2022)
Supporting payroll software vendors like JustLogin can automatically generate pre-populated tax files that can be submitted using the Validation and Submission Application. You can download the latest Validation and Submission Application here.
2. Submitting without Payroll Software
Online Application at myTax Portal
Log into myTax Portal and from the left-hand menu, select ‘Employment Income (AIS Online Application)’ under e-Submission. Register for the CPF Data Link-up Service which allows IRAS to obtain from CPF Board, employees’ data submitted by employers for CPF contributions. The data will be pre-filled in the AIS Online Application for employers when they submit employment income information to IRAS. Verify and adjust employees’ income information before submitting.
Offline Application (Only available until Dec 2022)
Download the Offline Application here. Input or mass import your employees’ information into the Application to generate the tax files and submit.
3. Submitting with Provident and Tax System
The Provident and Tax (PAT) System is a web-based system developed and managed by CrimsonLogic Pte Ltd, that supports e-Submission of Employment Income. A subscription is required to use the PAT system.
After submitting the required tax files, you should inform your employees, including directors, to check and submit their income tax returns.
We hope that you have gained more clarity on how to file your employees’ earnings. Payroll reporting need not be something to stress about every year. With a good payroll software, the burden of preparing accurate tax files for all your employees will be largely taken off your shoulders! Meeting the deadline will be a breeze.