In Singapore, an employer is required to prepare to report the remuneration (salary, bonus, benefits, etc..) earned by your employees in the preceding calendar year. These information are to be compiled in the Form IR8A and supporting Appendix 8A/ Appendix 8B/ Form IR8S (if applicable) and furnished by 1st March each year.
This guide introduce what is IR8A,the information within required to be completed, when and how to submit the IR8A. In the text below, we have use interchangeably the terms "preceding year" and "last calendar year", they have the same meaning as last calendar year (1 January to 31 December).
What is IR8A, is it for all employees?
It is compulsory for all Singapore employer (ie. business that hire/ employ staff) to complete Form IR8A for each relevant employee* they have employed in the last calendar year.
For organisation with less than 6 employees they will be required to furnish the IR8A form to their employees, ie. you need to complete the IR8A form and give a copy to your employees by 1st March (of the following year) for income they have earned at your organisation in the last calendar year. You may find a copy of the IR8A form and its supporting forms at the IRAS website (we attached a sample of the form in the below for your reference).
*The relevant employees are:
(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;
(d) company director;
(e) board members;
(f) pensioner; and
(g) employee who has left the organisation but received income in the previous calendar year.
The following employees are not required to have an IR8A furnished:
(i) For employees or foreigners who are posted overseas after clearance has been filed and did not render any employment service in Singapore for the rest of the previous calendar year;
(ii) Foreigners who are contracted by a Singapore employer to be based overseas and rendered their employment service wholly outside Singapore for the whole of previous calendar year; and
(iii) Foreigners who has left the organisation where the filing of Form IR21 is required.
Auto-Inclusion Scheme (AIS), am I in the AIS?
Organisation with more than 5 employees the organisation is required by IRAS to participate in Auto-Inclusion Scheme (AIS). Under this scheme, employers are to submit the employment income information of their employees to IRAS electronically. Such submitted information will be automatically included in the employee's income tax assessment.
If you are not sure if your organisation is registered by AIS, you may check at the IRAS website here. The portal for AIS is open for submission from 6 January and the due date is 1 March every year. IRAS encourages all organisation to submit the IR8A for your employees by mid February to avoid last minute rush at the end of the due date.
Below are some information you needed to assist you in completing the Form IR8A:
Date of commencement - if the employee commenced employment (ie. new joiner) in the preceding calendar year
Date of cessation - if your employee ceased employment (ie. resigned) in the preceding calendar year
Gross salary, fees, leave pay. wages and overtime pay - As the description suggests, these relates to the employee's "entitled remuneration" earned in the preceding calendar year under the signed employment agreement, whether or not (i) it is paid in the preceding calendar year; or (ii) it is paid to employee in Singapore or outside of Singapore.
Bonus - Same as point 3 except that bonus are assessed in the year that the employee becomes entitled to the bonus
Director fees - Director's fees are assessed in the year that a director becomes entitled to the fees.
Allowances - Allowances are taxable unless they are specifically exempted from income tax or are covered by an existing administrative concession.
Employee's compulsory contribution to CPF/ designated Pension or Provident Fund (in Deduction Category) - The amount of employee's CPF you have reported and paid monthly for the employee in the preceding calendar year.
Director fee - further elaboration
For director's fees that are approved in arrears (e.g. approved in 2021 after a director has rendered the requisite service for the financial year ended 31 Dec 2020), the director is generally entitled to the director's fees on the date the fess are voted and approved at the company's Annual General Meeting or Extraordinary General Meeting ("AGM/ EMG"). The director's fee will be assessed as earned in calendar year 2021.
For director’s fees that are approved in advance (e.g. approved in 2020 before a director has rendered the requisite services for the accounting year ending 31 Dec 2020), the director is not entitled to the director’s fees on date of AGM/EGM. Instead, he is entitled to the director’s fees as and when he renders his services for the accounting year ending 31 Dec 2020. As such, the director would be entitled to director’s fees on a monthly basis if he can enforce the payment of director’s fees on a monthly basis. The director's fee will be assessed as earned in calendar year 2020.
Appendix 8A, 8B, and Form IR8S?
- Appendix 8A "Value of Benefits-in-Kind"
- Appendix 8B "Details of Gains and Profits from Stock Options"
- Form IR8S "Details of Employer's/Employee's Contributions to CPF or Other Approved Pension or Provident Fund"
These documents are only required to be completed and furnished for the same employee if the employee earned such income in the previous calendar year. If they do not, you only file IR8A for them.
You must complete Appendix 8A if your employees were provided with benefits-in-kind — all the perks you offer them that are not salary: a fitness club membership, a medical insurance, an English class, etc. Employers have to declare the benefits-in-kind in the Appendix 8A unless the benefits-in-kind are granted an administrative concession or exempted from Income Tax. The details of such concession and exemption are detailed in the IRAS website.
You must complete Appendix 8B if you are an employer who derived gains or profits from Employee Stock Option (ESOP) Plans or other forms of Employee Share Ownership (ESOW) Plans. If an employee has ESOP or ESOW plans, he can own or buy shares in the company. Any gains or profits from the share option must be taxed. The details of such employee shares benefits are detailed in the IRAS website.
You must complete the IR8S Form if you are an employer who made excess CPF contributions on your employees' wages and/or has claimed or will claim a refund on excess CPF contributions.
How to rectify errors in the forms after submission in AIS?
If you notice and discover there are errors in the IR8A or its supporting appendixes/ document submitted through the AIS, you will need amend such errors as soon as possible. The deadline to submit any amendments will be 31 March.
The steps to submit amendment records are the same as how you have submitted the IR8A records in the IRAS portal under the AIS scheme. For the amendments, you only need to indicate the difference between the amount you reported and the actual sum. Please see below illustrations:
Example 1: Previous income reported is lower
Employer has reported the income lower than the actual income earned in the earlier submission.
Actual salary earned= $25,000
Original submission = $21,000
Salary amount to be given in the amendment files should be shown as "$4,000".
Example 2: Previous bonus reported is higher
Employer has reported the bonus amount higher than the actual bonus received.
Actual bonus received = $6,000
Original submission = $8,000
Bonus amount to be given in the amendment file should be shown as "-$2,000".