As an employer in Singapore, you can bet that your tax obligations won’t end with you and the company. In addition to filing your corporate and personal income taxes, the Inland Revenue Authority of Singapore (IRAS) expects you to pass on information regarding your employees’ financials too.
Ok, you won’t be filing their personal income taxes. But rather, you’ll be required to fill in and submit what is known as the IR8A Form.
To find out more about it, we invite you to tag along as we explore all the basics about IR8A Forms in Singapore. This article explains what it all entails, the purpose of the IR8A Form, as well as the process of filling out and submitting IR8A Forms to the IRAS.
What is IR8A?
IR8A, for starters, is a statutory tax obligation in Singapore, in which employers are required to report their employees’ yearly earnings. You’ll find this requirement stated under Section 68 (2) of Singapore’s Income Tax Act.
Make no mistake about it, though. The whole procedure isn’t entirely about the IR8A Form. Rather, employers are required to accompany the principal IR8A Form with Appendix 8A, Appendix 8B, or Form IR8S where applicable. All these should be filled out accordingly and submitted to the IRAS by the 1st of March every year.
In essence, you should prepare a Form IR8A for all individuals who happen to be:
- Part-time resident employees.
- Full-time resident employees.
- Employees who continue to offer their services to the company while receiving pension dues.
- Past employees who received income dues in the preceding year.
- Company board members who’ve been getting board or committee member fees.
- Resident company directors.
- Non-resident company directors.
On the other hand, you’ll be exempted from filling out and submitting Form IR8A for employees who happen to be:
- Foreigners you contracted to work overseas. Such employees should have rendered their professional services outside Singapore for the entire tax year.
- Foreigners who entirely worked overseas without rendering any form of employment service within Singapore at any point of the year.
- Foreigners who left the company before the end of the year. For such a case, you are, instead, required to fill in and submit Form IR21. That should serve as a notification that the non-citizen employee has left the company.
The Importance of an IR8A Form
The whole point of filling out and submitting Form IR8A is to provide the IRAS with all the particulars on the employees’ earnings and benefits. Consequently, the IRAS uses the information to assess the personal income taxes of the individual employees.
As a matter of fact, the system even proceeds to autofill your employees’ electronic tax return forms with their respective IR8A details. This reduces the chances of error, and makes the tax filing process much easier for all the employees.
How to Process and Submit an IR8A Form
Although you can proceed with hardcopy IR8A Forms, it’s much easier and more convenient to process and submit everything electronically.
Here’s the entire procedure:
- If you intend to process and submit Form IR8A electronically, you should first get yourself registered for the Auto-Inclusion Scheme (AIS) for Employment Income. This system is designed to automate all the basic tasks, including applying all the tax portal updates. You can confirm your company’s registration by simply conducting a search on the AIS platform.
- Once you confirm your company’s registration, you can go ahead and process your IR8A through AIS for Employment Income. This is a requirement for all employers with 7 or more employees, as well as those who receive a “Notice to File Employment Income Of Employees Electronically.”
- You don’t have to download the IR8A.txt file, though. As it turns out, the IRAS has integrated its systems with various payroll management software to make the whole submission process much easier.
- You can, for instance, use JustLogin or Talenox to automatically validate and submit your employees’ information directly to IRAS.
- Then when you’re done, you might want to give your employees copies of their filed IR8A Forms. They’ll use them as references while they file their income taxes.
- If, on the other hand, you happen not to be registered under AIS for Employment Income, you should fill in the IR8A Forms manually or digitally, and then hand them over to your employees by the 1st of March.
- As for AIS-registered employers who are not using supported payroll management software, you can submit your IR8A Forms through myTax Portal.
What are Appendix 8A, Appendix 8B, and Form IR8S?
As we’ve stated already, Form IR8A doesn’t always run independently. In some cases, you might be required to accompany it with Appendix 8A, Appendix 8B, or Form IR8S.
Here are the conditions for each of them:
- Appendix 8A: This is used to declare all the benefits-in-kind that you granted your employees during the tax year. As such, you should fill in and submit the details of all the extra non-monetary perks that were not part of the salary. That includes benefits such as medical insurance, gym membership, etc.
- Appendix 8B: This only applies if you managed to generate profits or gains from your workers’ Employee Share Ownership (ESOW) plans - including Employee Stock Option Plans (ESOP). Such plans, for your information, allow employees to purchase and own part of the company through shares. And, as you’d expect, the IRAS charges taxes on all the resultant share gains.
- IR8S Form: The IR8S Form is filled and submitted by employers who made extra payments to their employees’ Central Provident Funds (CPF), and are possibly considering asking for refunds on the excess remittances.
Where to Start
To correctly fill out your IR8A Forms plus the accompanying Appendix 8A, Appendix 8B, and IR8S Forms, you’ll need to refer to your payroll records. This is where you ought to find not just your employees’ salary info, but also all the details about their corresponding bonus payments, perks, claims, as well as job postings and leaves.
Well, of course, keeping tabs on such stuff can be hectic. That’s why, you should seriously consider leaving the heavy lifting to payroll management and tax planning experts like Wealthbridge - so you can focus all your energy and time on running the business. You can check what our tax filing services include here.