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It’s Tax Time : Here’s a Simple Guide to Submitting Employee Earnings in Singapore 2022

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It’s Tax Time : Here’s a Simple Guide to Submitting Employee Earnings in Singapore 2022

February 21, 2022

Everybody knows how tedious filing taxes can be if you’re an employee. But, did you know that it’s even more troublesome for employers? If you’re an employer in Singapore, you are required by law [S68(2) of the Income Tax Act] to submit all employee earnings and prepare tax forms for your employees. 

 

So, what are the forms you need to have on hand?  

1) Form IR8A – for all employees, including pensioners and employees who received income in 2021, but are no longer with the company.

2)    Appendix 8A – for employees who received benefits-in-kind.

3)  Appendix 8B – for employees who profited from Employee Stock Option Plans (ESOP) / Employee Share Ownership Plans (ESOW).

4)    Form IR8S – for refund claims on excess CPF contributions.

All of these forms must be electronically submitted to the IRAS by the 1st of March, if your company is under AIS. However, for companies not under AIS, you must provide these forms to your employees no later than the 1st of March.

In the event that you don’t manage to submit your employee earnings on time, your company could be subjected to penalties (S94 of the Income Tax Act); 

(1) a fine of up to $1,000 or

(2) imprisonment for a period of no more than six months.

So, be mindful of the dates and submit all your tax forms early!

But wait, what is AIS?  

AIS is an acronym for the Auto-Inclusion Scheme. This is a scheme that allows employers to easily submit all their employee’s income information to the IRAS. Once the information has been submitted, it will automatically be included in your employee’s income tax assessments. This way, they won’t have to declare it on their own, which helps to save time for employees and employers.

If employees wish to check what information is auto-included under AIS, they may do so by heading over to the myTax portal (https://mytax.iras.gov.sg/ESVWeb/default.aspx) under ‘Income, Deductions and Reliefs Statement’.

Additionally, AIS encourages companies to be more eco-friendly, as all these forms are submitted digitally. Ergo, decreasing the usage of paper. Through the use of AIS, both employers and employees get to enjoy the benefits of easier tax filing.

Is your company under AIS?

For companies that employ 5 or more people, participation in AIS is regulated by law. In addition, joining AIS is also compulsory for companies who received the “Notice to File Employment Income of Employees Electronically under the Auto-Inclusion Scheme (AIS)”.

If your company has less than 5 people, you are highly encouraged to join AIS as well. Registration for YA 2023 submission is from 1st April 2022 to 31st December 2022. Bear in mind that this registration is for the year 2023 and not this year.

 

What you need to do before submission:

Step 1: Give full authority to your payroll merchants or staff

Companies that recently joined AIS are required to authorise their staff or a payroll vendor to submit the necessary information to IRAS. For corporate transactions, authorisation of vendor/staff can be done via CorpPass. But for government digital services, verification must be done via SingPass.

Step 2: Download all the necessary tax forms

In order to ensure a smooth tax process, it is highly recommended that you download all the necessary forms from the IRAS website. The forms can be found here (https://www.iras.gov.sg/taxes/individual-income-tax/employers/auto-inclusion-scheme-(ais)-for-employment-income/reporting-employee-earnings-(ir8a-appendix-8a-appendix-8b-ir8s). But, why go through all that hassle when payroll software like JustPayroll exist? Through this software, you can easily retrieve the forms without downloading multiple forms from different websites.

3 Ways to Submit Employee Earnings: 


     1) Submission via Payroll Software(API)

When employing the use of a payroll service provider or software, it’s important to check if it can be integrated with IRAS through AIS Application Programming Interface (API). By doing so, employers can directly submit their employee income information to IRAS through their payroll software, like Justlogin. This helps to ensure that the submission process is carried out smoothly.

If you fall under the SME category, the IRAS highly recommends that you employ the use of a payroll software. The reason behind this suggestion is to facilitate and ensure a smooth tax submission process with no errors. Moreover, employing the use of a payroll software is known to be the most convenient method of tax submission. There are also a couple of grants, like the Productivity Solutions Grant (PSG) and Start Digital Pack, that are available to SMEs to further encourage the adoption of payroll software.

The complete list of payroll software that has been approved and integrated with the IRAS can be found here (https://www.iras.gov.sg/media/docs/default-source/uploadedfiles/pdf/ya2022-ais-payroll-software-vendors36895a46-050c-40ca-87d9-0370d6b7738d.pdf?sfvrsn=8a6b701d_31).

     2) Submission via myTax Portal

If your company does not employ the use of a payroll software, then the next best option for you is to submit your employee earnings through the use of myTax Portal. All you have to do is log in to myTax Portal and select ‘Submit Employment Income Records’ under the Employers tab. Through this online application, you can register for the CPF Data Link-Up service that will pre-fill your application with data retrieved from the IRAS. 

Since there are still companies who do their payroll manually, employers also have the option of submitting their employee earnings through AIS Offline Applications. In order to use the offline method, employers would have to download the application and manually fill out their employee’s information to be filled and submitted. However, the IRAS recommends that all employers submit their taxes electronically as this method will only be available until December 2022.   

     3) Submission via Provident and Tax System(PAT)

Employers who wish to use the PAT system must be subscribed to their service first. The PAT system is a one-stop online portal service that allows HR personnel to easily manage employees’ monthly Central Provident Fund (CPF) and yearly IRAS submissions for tax purposes. This system was developed by CrimsonLogic Pte Ltd and is run and managed by them.

Once you have submitted all the necessary tax files, it is vital that you advise your employees to check and submit their income tax returns as soon as possible. With payroll software like JustLogin, employers won’t feel the burden of those yearly tax submissions. Instead, reporting your employees’ earnings will be a piece of cake. So, what are you waiting for? Register for JustLogin today!

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