In Singapore, both individuals and businesses practise annual (instead of monthly) tax filing. For businesses, employers have to report to the Inland Revenue Authority of Singapore (IRAS) how much their employees earned last year, from 1 Jan to 31 Dec. They make this report through the IR8A form (download here).
Here’s a simple guide on IR8A filing for employers – from how to complete the form to when the form must be completed.
Who must I prepare the forms for?
|Do prepare IR8A for||Do not prepare IR8A for|
|(a) Full-time resident employee;
(b) Part-time resident employee;
(c) 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);
(d) Company director (including a non-resident director);
(e) Board Member receiving Board/Committee Member fees;
(f) Pensioner; and
(g) Employee who has left the organisation but was in receipt of income in 2020 (e.g. stock options gains)
|(a) Foreigners posted overseas after clearance has been filed and did not render any employment service in Singapore for the rest of the calendar year;
(b) 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
(c) Foreigners who have left the organisation where the filing of Form IR21 is required.
Tax residents refer to Singapore Citizens, Permanent Residents and foreigners who have worked for 183 days or more.
When do I need to complete the form?
You will need print out the IR8A for every employee, complete each form and give the form to each employee by 1 Mar, 2021.
NOTE: For a computer-printed Form IR8A, a signature is not compulsory. However, the name, designation, contact number of the authorised person and the date must be stated. Also, do not send the completed forms to IRAS.
As that is a lot of manual work, you may prefer the Auto-Inclusion Scheme (AIS) for convenience. The information you submit will show up on your employees’ electronic tax return, as well as in their income tax assessments. As a result, you need not issue hardcopy Form IR8A and the appendices to your employees.
What if I miss the deadline for submission?
If you fail to comply, you may face charges under Section 94 of the Income Tax Act. Upon conviction, you may meet with a fine of up to $1,000 or imprisonment of up to 6 months.
What is the Auto-Inclusion Scheme (AIS)?
An Auto-Inclusion Scheme (AIS) for employment income is available for employers to electronically submit the IR8A information to the tax authority (IRAS). It allows employers to declare the lump sum amounts with less effort compared to completing the hardcopy IR8A form. This also benefits employees, because they don’t need to manually update it themselves. After all, their employer has directly updated their information onto their tax portal.
As of 2021, participating in AIS is mandatory for employers with 7 or more employees (more information on participation). But what if you are an employer with 7 or more employees who did not receive any notification from IRAS to participate IRAS? In this case, do inform IRAS at firstname.lastname@example.org, as they will need to send a letter to you to participate in AIS!
One-click submission via IRAS-approved HR system
You’ll want to check out the list of Supporting Payroll Software Vendors for the Auto-Inclusion Scheme (AIS) for Employment Income (as of 10 Nov 2020).
You can generate all employee income tax forms for FREE, in 3 steps and directly to IRAS with a Talenox account. Talenox is an IRAS-approved software that supports the Auto-Inclusion Scheme (AIS) for Employment Income:
How to fill up Form IR8A?
Here is a step-by-step guide, complete with a mock example for the year ended 31 Dec 2020.
Step 1: Basic Employment Details
To begin with, you need to input basic employment details as shown in the fields below.
Step 2: Basic Types Of Income
Next, do note that the IR8A form actually groups employment income into 4 types.
c) Director’s fees; and
d) Other types of employment income
Most types of income are taxable unless there is a specific exemption. This includes all benefits paid or granted in money or otherwise. Find out what is taxable.
a) Gross salary, fees, leave pay, wages and overtime pay
The most basic payments fall under this type of income.
However, do note that this excludes allowances and commission. After all, they fall under Others (refer to point d below).
Do also exclude NSmen Pay paid directly to employees by Mindef, Singapore Civil Defence Force or Singapore Police Force. Only report the amount if the NSmen pay was reimbursed to the company.
This is assessed in the year an employee becomes entitled to the bonus.
c) Director’s Fee
These are assessed in the year a director becomes entitled to the fees.
|If the fees are |
approved in arrears
|Then, entitlement is on the date |
the fees are voted and approved
at the company’s AGM/ EGM
|If the fees are|
approved in advance
|Then, entitlement is as and when|
the services are rendered for the
year e.g. entitlement can be monthly
if payment of director’s fees is on a
d) Other types of income
This is where your report less common types of payments; such as payments arising from resignation, voluntary CPF contribution and employee stock options.
Here are the more typical types that you should know about!
Once the form is filled, signed off and sent to each employee, your obligation as an employer is done! For AIS submission, the last step is to enter the information above as a batch on the IRAS portal.
Consider Terms of Overseas Posting in Step 2
Part of the job
When your employee has to travel or be overseas as part of his/her job, this means the overseas posting is incidental to his/her Singapore employment. In this case, you will need to report said employee’s income and CPF contribution for the whole year.
Not part of the job
What about the employee whose overseas posting is not incidental to his/her Singapore employment? This depends on the overseas posting period.
If your employee has overseas employment income and employer’s
contributions to overseas pension funds that qualify for the concession, please select “Income from Overseas Employment and Overseas Pension Fund with Tax Concession” and provide the details of the Overseas Pension
Fund separately via email to email@example.com.
Employed on board of ships
If your employee was a crew working on board a shipping vessel during the year 2020, do indicate the following codes against your employee’s designation on the Form IR8A:
- ‘FR’ (foreign-registered ship);
- ‘SR’ (Singapore-registered ship plying within the port limits of Singapore); or
- ‘SRI’ (Singapore registered ship plying in international waters).
Employment income is only exempted from tax if the employee meets all of the following:
- Working onboard a Singapore registered ship that is plying in international waters, and
- Employment was exercised substantially outside Singapore during 2020.
This tax exemption does not apply to employees who were based onshore but may periodically need to board/sail with the ships for inspection work or other purposes.
What if I need to make changes after submission?
Let’s say there are changes you need to make to your employee’s income or deductions information after electronic submission. In this case, you could manually calculate and submit the difference in amount for the affected employee and not an overall revised value (see details).
Alternatively, you could let Talenox do an automatic calculation for you! Simply key in the revised amounts for the affected employees and we’ll do the rest.
If you’re not on AIS and your employee has submitted the form, you will then need to complete another form with the correct amount and indicate:
(i) “Additional” to report the additional income paid to the employee; or
(ii) “Revised” to report the entire income/deduction details.
Do note that revised Form IR8A will supersede all previous Form IR8A. Hence, you must give the Additional/Revised Form IR8A to your employee for re-submission to IRAS.
A good Payroll software automates IR8A reporting
There are a number of important features to look out for in a Payroll software. So, what if I told you could compile the relevant income for the year to automatically fill the IR8A form for employees? Because you can!
With a direct integration to AIS, Talenox helps employers ease through the annual IR8A submission process.
- This means you won’t need to manually sum up 12 months’ worth of payroll details. In addition, you won’t have to worry over-reporting any information incorrectly on the form!
- Talenox will even help you ‘remember’ to prepare the form for employees who ceased employment before the year ended. It’s easy to overlook this obligation, especially if turnover is significant.
This guide serves to simplify the IR8A exercise for employers participating in it for the first time. Adopting Talenox simplifies the exercise year after year.
This article was published in Feb 2016 and updated in Jan 2021.
Check out more informative reads on Singapore Tax Filing:
Talenox is integrated with AIS to help employers ease through the annual IR8A submission process. This is a notable feature available on all of Talenox’s free and paid plans. Get started on our Free Plan now.