How IR8A Can Help Automate Payroll Processing

Individuals and businesses in Singapore file their taxes (IR8A) annually rather than monthly. Employers must report to the Inland Revenue Authority of Singapore (IRAS) how much their employees earned last year, from January 1 to December 31. It is a mandatory submission to IRAS to report employee income. 

As an employer, your best bet is that you have to continuously process your employees’ financials to IRAS, together with the tax obligations of your business earnings. Though you won’t be filing their personal income taxes, you have to fill in and submit the IR8A form. And not only that, supporting documents are often required too.

What is IR8A

The IR8A is a form which employers have to submit to Singapore IRAS yearly. Under the statutory tax obligation in Singapore ,the IR8A requirement is stipulated under Section 68 (2) of Singapore’s Income Tax Act.

Who is IR8A for

The IR8A Form is compulsory for the following:

  • Full time resident employees
  • Part time resident employees
  • Non-resident employees who are based overseas
  • Resident company directors;
  • Non-resident company directors;
  • Board members receiving Board Member Fees or Committee Member Fees;
  • Employees who are working for the business while receiving their pension;
  • Employees who have left the company but are owed income from the previous year. They are usually those who are receiving their income dues the previous year.

The following are exempted from IR8A Form: 

– Contract foreign employees based overseas who did not provide employee services in Singapore for the rest of the fiscal year

– Foreign employees who worked entirely abroad without performing any form of employment service in Singapore at any time of year

– Foreign nationals who have left the company and/or the country. A Form IR21 must be submitted to IRAS in this case.

What is the deadline for IR8A

Every year, by March 1st, the IR8A Form, together with other required forms, must be filed and submitted to IRAS.

How to fill in the form

You must print the IR8A form for each employee, fill it out, and give it to each employee.

How a software can automate the process

As technology advances, business processes also tend to improve with shorter processing time and so, better productivity. Payroll process automation is no exception.

Auto-Inclusion Scheme (AIS) is a payroll software used to automate the processing of salary.

Employers can use AIS for employment income to electronically submit IR8A information to the tax authority (IRAS). Participation in AIS is mandatory for companies with six or more employees and optional for companies with five or fewer employees.

Employers can declare lump sum amounts with less effort than completing the hardcopy IR8A form. Employees benefit as well because they no longer have to manually update it. Their employer, after all, has directly updated their information on their tax portal.

Why Automation Is Good For IR8A Form Submission

You won’t have to manually add up a year’s worth of payroll information. Furthermore, you won’t have to worry about over-reporting any information on the form!

Jusixty will even help you’remember’ to prepare the form for employees who left before the end of the fiscal year. It’s easy to overlook this requirement, especially if turnover is high.