Singapore Income Tax: Filing Employee Earnings

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singapore income tax

Singapore’s income tax laws mandate that all employers are required to file employee earnings and certain tax forms for all their employees who are employed in Singapore. The deadline to do so is the 1st of March every year, but the submission window actually opens from 6 Jan and employers are encouraged to submit as early as possible to avoid any last-minute rush.

Filing employee earnings is a relatively straightforward task. Here is a look at the process.

Tax Forms for Employees

The main Tax Form that employers must fill up is Form IR8A. This can be found on the website of the Inland Revenue Authority of Singapore (IRAS).

The form is applicable for the following employees:

1.      Full-time resident employee;

2.      Part-time resident employee;

3.      Non-resident employee including those who are based overseas and are required to render service in Singapore during the year (exclude details of employment income where clearance has been filed);

4.      Company director (including a non-resident director);

5.      Board members receiving Board/Committee Member Fees;

6.      Pensioner; and

7.      Employee who has left the organisation but was in receipt of income during the financial year (e.g. stock options gains).

Employees who are excluded from this are:

1.      Foreigners posted overseas after clearance has been filed and did not render any employment service in Singapore for the rest of the calendar year;

2.      Foreigners who are contracted by a Singapore employer to be based overseas and rendered their employment services wholly outside Singapore for the whole calendar year; and

3.      Foreigners who have left the organisation where filing of Form IR21 is required.

Various appendixes are also required to be submitted if their respective conditions are met.

Appendix 8A applies to employees who were provided with benefits-in-kind.

Appendix 8B is for employees who derived gains or profits from Employee Stock Option (ESOP) Plans or other forms of Employee Share Ownership (ESOW) Plans.

Appendix IR8S must be completed if the employer has made excess CPF contributions on their employees' wages and/or have claimed or will claim refund on excess CPF contributions.

These forms must be signed by the company secretary/director, precedent partner, sole-proprietor, manager, honorary secretary/treasurer of Clubs and Associations, local representative of a non-resident company or a person authorised by the employer.

A signature is not required as the form is computer-printed. However, the name, designation, and contact number of the authorised person, as well as the date, must be stated.

Note that these forms are to be completed by the employers and then handed over to the employees for them to do their own income tax filing. Submission to the IRAS is not required. What about self-employed/sole proprietors?

Self-employed persons, sole proprietors, and partners must file their annual tax return if they received a notification from IRAS to file. Even if they did not receive a notification, they will still need to file a tax return if they earned more than S$6,000 in business income for the year, or if their annual income was more than S$22,000 last year. This can be done by logging into the myTax Portal via SingPass.

On the other hand, if they receive an SMS informing them that they have been selected for No-Filing Service (NFS), they are not required to file a tax return. One may be selected for NFS if they earn commission income of S$50,000 and below or derived driving income as a Private Hire Car (PHC)/Taxi driver for previous and current Years of Assessment.

However, most sole proprietors will not be required to file for employment income specifically unless they have received a notification to do so. For self-employed persons who are also employees at the same time (by working in multiple jobs), they will have to ascertain whether their employer is obligated to file for employment income.

What is the Auto-Inclusion Scheme (AIS)?

Under this scheme, employers submit the employment income information of their employees to IRAS electronically, which will then be automatically included in the employees’ income tax assessment.

This means that employees will not need to declare these incomes themselves, and as such, employers do not need to issue the Tax Forms mentioned above to employees separately.

Which companies come under the AIS?

As specified in a government gazette under the Income Tax Act, participation in the Auto-Inclusion Scheme is compulsory if:

·        A company has six or more employees

·        A company has received the "Notice to File Employment Income Of Employees Electronically under the Auto-Inclusion Scheme (AIS)" gazetted under S68(2) of the Income Tax Act

Companies who are not required to file electronically can also join the AIS on an opt-in basis.

Submission through AIS

Companies who are participating in the AIS for the first time must first authorise staff or a third party to submit the employment income information at CorpPass.

If the company is utilising a payroll software which is directly integrated with IRAS through API, the employer or authorised member can validate and submit employment income information directly through their payroll software, thereby streamlining the entire process.

Employers who do not have the applicable payroll software will need to sign up for the CPF Data Link-up Service through
myTax Portal. Simply log into the portal and from the left-hand menu, select ‘Employment Income (AIS Online Application)’ under the “e-Submission” tab.

For companies who are still doing payroll manually will need to download the Offline Application from IRAS, input or import employees’ information into the application, and generate the requisite digital tax files for submission. Take note that this option is only available until December 2022.

Adopting payroll software makes tax submissions a breeze

Adopting payroll software that is integrated with the AIS Application Programming Interface (API) service is highly encouraged by the IRAS. It provides employers with a much more convenient and efficient way of submitting records to IRAS.

If you are an SME, in particular, subsidies and support are available through the SMEs Go Digital Programme, the Productivity Solutions Grant (PSG), Start Digital Pack, and the Digital Resilience Bonus.

Remember to file them on time!

As with all other forms of tax, failing to file employees’ earnings on time is a crime. Towkays must take care to file these timely and without error. The adoption of compatible payroll software would most certainly go a long way in making the process as simple and fuss-free as possible.

Read also: SINGAPORE BUDGET 2021: What SMEs Need To Know
Read also: Expired or Expiring Singapore SME Government Grants from 2020 (Will Budget 2021 Provide New Support?)

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UPDATED AS OF 15 Jun 2024
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