In accordance with Singapore's tax legislation, it is mandatory for all employers to annually compile and submit comprehensive employment income information for their employees.
To fulfill this requirement, employers are required to fill out Form IR8A and any related documents, including Appendix 8A, Appendix 8B and Form IR8S (if applicable).
The purpose of the IR8A
The purpose of the IR8A is to report employee earnings. It is a crucial requirement that all businesses in Singapore must fulfill, playing a significant role in their financial management endeavors.
Under Section 68(2) of the Income Tax Act, all Singapore employers are obligated to prepare Form IR8A for their employees based in Singapore.
Employers carry the responsibility of submitting these documents to the IRAS by 01 March each year. Failure to comply with this requirement may lead to legal consequences, imposing substantial costs on your business.
As mentioned earlier, it is important to provide any necessary supporting documentation alongside the Form IR8A. This may include Appendix 8A, Appendix 8B, or Form IR8S, depending on the employee's status as a foreigner.
Appendix 8A is a form that needs to be completed by Singaporean who receive non-cash benefits, also known as in-kind benefits, which are separate from their regular salary. These in-kind benefits encompass fringe benefits and other non-monetary advantages such as insurance coverage, gym memberships, complimentary parking, or educational assistance.
Appendix 8B is a form that must be completed by Singaporean employees who have received benefits from Employee Stock Option Plans (ESOPs). This form is also applicable if you have other types of Employee Share Ownership (ESOW) plans.
Form IR8S is to be completed in situations where you have made excessive CPF (Central Provident Fund) payments on your employees' salaries or if you have claimed or intend to claim a refund for these excess contributions. To obtain the most recent contribution rates, please refer to the official CPF website.
Is the IR8A applicable to all employees?
The IR8A form must be completed by every employer for various types of employees, including:
Singaporean or permanent, full-time resident employees, including part-time employees.
Employees who are not based in Singapore but are required to provide services within the country during the year.
Local business owners and managers with six or more employees.
Company directors of non-resident corporations.
Board members receiving Board/Committee Member Fees.
Employees who receive a pension (such as CPF) while working for the company.
Employees who have left the business but are still entitled to receive payments from the previous year.
Who is not required to file the IR8A?
The following categories of employees are exempt from filing the IR8A:
Post-clearance foreign employees who did not provide employee services in Singapore throughout the entire calendar year.
Employees who were based outside of Singapore for the entire calendar year and exclusively rendered their services outside of Singapore.
Individuals who have departed both the company and the country (in this case, a Form IR21 must be submitted to IRAS).
How to submit my IR8A to IRAS?
Singapore employers have the convenience of electronically filing IR8A information through the Auto-Inclusion Scheme (AIS) provided by IRAS for employment income. While this scheme is optional for companies with five or fewer employees, it becomes mandatory for companies with six or more employees.
With the AIS, the data is automatically incorporated into the employee's income tax assessment, simplifying the process for both the company and the employee. It is advisable to provide each employee with a copy of their submitted IR8A form for their personal records.
If you have any concerns or doubts regarding your company's registration for AIS, you can utilize the IRAS Service to verify the status.
Although initially setting up your IRAS account may require some time, it will ultimately save you time in the long run compared to manually filling out paper forms for tax-related matters. Additionally, under the AIS, employee information will be automatically updated each year, eliminating the need for manual submission.
If you have made a mistake in filing
If you have made a mistake in filing, there's no need to worry as it can be rectified. You can easily make adjustments in the online portal by updating the correct information to reflect the accurate figures for your employee's income and other tax obligations after electronically completing the forms.
Another option is to utilize an IRAS-approved online application, some of which are available for free, to make necessary changes to your employee income tax forms and overall tax responsibilities. If you prefer to save time and ensure accuracy, you can also seek assistance from a tax specialist who can handle your tax and IR8A obligations.
However, it is important to note that these corrections should be made before the deadline of 31 March to ensure compliance with the regulations.
Expede Tech Pte Ltd's digital payroll services will alleviate any concerns related to submitting employee earning forms. Our services cover not only your monthly payroll reports but also the preparation of annual IR8A forms, IR21 tax clearance, CPF submissions, and SDL processing. With our comprehensive payroll solutions, you can trust us to handle these obligations efficiently and accurately, leaving you with peace of mind.
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