Auto-Inclusion Scheme with Payroll Software in Singapore

Auto-Inclusion Scheme with Payroll Software in Singapore

In Singapore, one of the key forms related to payroll is the IR8A form. It is used to report the employment income and benefits-in-kind received by employees for the preceding year of assessment. Employers are required to submit the IR8A forms to Inland Revenue Authority of Singapore (IRAS) for all employees by 1st March each year.

Many payroll software solutions in Singapore, such as Jusixty, have the capability to automate the process of generating and submitting the IR8A forms to IRAS.

What is Auto-Inclusion Scheme (AIS)

AIS is a tax initiative in Singapore aimed to make filing income tax returns easier for taxpayers. AIS automatically includes certain taxpayers into the scheme. As a result, their tax returns are pre-filled with information from their employers, banks, and other third-party sources. This eliminates the need for taxpayers to manually gather and input the information required for their tax returns. AIS is mandatory for employees and voluntary for the self-employed and approved unincorporated entities.

Do note that the option to submit via the AIS offline application ended on 31 December 2022. Employers currently using offline applications are strongly encouraged to switch to a payroll software with APIs or submit Employment Income Records at myTax Portal (Online Application).

It is compulsory to join the Auto-Inclusion Scheme if the company has more than 5 employees.

What is Form IR8A

Form IR8A, also known as the Employer’s Return of Remuneration and Pensions for the Year of Assessment, is a form used in Singapore to report the remuneration and benefits provided to employees during the course of a year. The form must be completed and submitted by the employer to IRAS by April 15th of each year. It is used to calculate the employee’s tax liability, and to ensure that the correct amount of income tax had been withheld from the employee’s salary. The form requires the employer to report information such as the employee’s salary, bonuses, stock options, and other benefits.

As an employer, do I need to submit Form IR8A for all employees?

It is compulsory to complete Form IR8A for all employees who received remuneration during the year of assessment, regardless of the remuneration amount. This includes full-time, part-time, and casual employees. It also applies to directors and partners of a partnership. However, there are exemptions for statutory board employees, government scholarship holders, and employees who received only director’s fees or honoraria. It is best to check with IRAS for the latest rules and requirements regarding any exemptions.

What information do I need to provide in the Form IR8A?

Form IR8A requires the employer to report the following information for each employee:

  • Employee’s name, identification number, and employment status
  • Remuneration such as basic salary, bonuses, commission, and other payments
  • Allowances such as housing, transport, and other benefits in kind
  • Stock options and share awards
  • Retirement and pension benefits
  • Director’s fees and other honoraria
  • Taxable benefits and reimbursements
  • CPF contributions made by the employer and employee
  • The employee’s overseas income and tax paid, if any.

It is the employer’s responsibility to ensure that the information provided is accurate and complete.

Are there other forms besides IR8A?

Yes, there are a few other forms that employers in Singapore should be aware of:

  • Form IR21: This form is used to notify IRAS of the cessation of an employee’s employment. It should be submitted within 14 days of the employee’s last day of employment.
  • Form IR8S: This form is used by employers to report the benefits in kind provided to their employees. It should be submitted together with Form IR8A by April 15th of each year.
  • Form IRAS 16: This form is used to claim a tax deduction for the employer’s contributions to an employee’s Central Provident Fund (CPF) account. It should be submitted together with Form IR8A by April 15th of each year.
  • Form C-S/ C: This form is used by companies to file their corporate income tax returns. It should be submitted together with the company’s financial statements to the IRAS by the company’s financial year end.
  • Form P: This form is used by partnerships to file their income tax returns.

It is important to note that the forms and deadlines may be changed by the IRAS periodically, and it is the employer’s responsibility to ensure that they are aware of the latest rules and requirements.

Benefits of using a payroll software

A payroll software is used to manage payroll and other HR-related tasks for businesses in Singapore. It can help businesses calculate and manage employee salaries, taxes, and other deductions. Furthermore, it can generate various reports and forms related to payroll. The software can also ensure compliance with regulations related to payroll and taxes in Singapore. As such, using a software helps to save time and reduce the risk of errors, while ensuring that the business is in compliance with legal requirements.

It’s important to note that, while payroll software can help with the processing of the data and the creation of forms, the employer is still responsible for ensuring the accuracy of the information provided.

The software can be integrated with the company’s payroll system and employee data to automatically calculate and generate the IR8A forms based on employment income and benefits-in-kind received by employees. The software also can provide a validation check to ensure that the data entered is accurate, and in compliance with the regulations.

Once the IR8A forms are generated, the software can also facilitate the submission of the forms to IRAS electronically. This can be done by either transmitting the data directly to the IRAS e-filing system or by generating an electronic file that can be uploaded to the e-filing system.

Jusixty is a free-to-use payroll software that helps automate this process and can help to save time and reduce the risk of errors.