What is the IR8A?
As regulated by law (according to the Income Tax Act), all employers in Singapore must submit their yearly employment income information to the Inland Revenue Authority of Singapore (IRAS). For instance, if you are looking at the 2022 Year of Assessment (YA), the assessment is for income earned from 1 January to 31 December 2021.
The IR8A form submission has to be made by 1 March each year with the necessary supporting documents. Should companies fail to do so by the deadline, they can be subjected to a fine of up to $1000 or receive 6 months of imprisonment.
What is required for each section of the IR8A?
1. Employment details
Be sure to include your employees’ personal particulars such as their full name, designation, address, bank to which their salary is credited, employee’s and employer’s tax reference numbers.
2. The types of income
(any form of profit, gain, or benefit derived by the employee is taxable)
This includes the employee’s gross salary, wages, leave pay and any overtime pay. Note that commission and allowances are excluded from this section and are instead filed under the ‘other types of income’ section.
Whether given in terms of a contract or non-contractual service, the bonus is the added amount given in the preceding year.
- Director’s fees
The director’s fees are taxable because this is also income derived from the director’s employment. However, as this income is sourced in the country where the company resides, if the business has no presence in Singapore, the director’s fees are not liable to Singapore tax.
- Other types of income
For other benefits-in-kind and allowances offered by the company, these payments are filed under this section. However, note that this particular section is split into 2 categories: taxable and not taxable other types of income.
Taxable other types of income include allowances for transport or meals, compensation for early termination of a contract, tax paid by the employer etc. On the other hand, examples of not taxable other types of income are benefits-in-kind that include exemption from Income Tax and any compensation for the loss of office.
1. What supporting documents are required?
If your employees receive any form of benefits-in-kind, whether it’s car parking fringe benefits or allowance for meals and transport, you’ll need to submit this document together with the IR8A.
Your employees might have rights to purchase shares in the company (Employee Stock Option) or derived other forms of gains as part of the Employee Share Ownership Plans. These profits are also taxable and need to be filled in the Appendix 8B sample form.
The Form 1R8S is relevant for employers who have made excess CPF contributions to their employees’ wages. Alternatively, if you will claim or have already claimed a refund for the excess amount, remember to submit this form along with the IR8A.
You can download all the relevant documents from the IRAS website.
2. How do I submit the IR8A and other supporting documents?
While some companies print out hard copies of the various sample forms, more businesses have opted for the more convenient choice: registering for the Auto-Inclusion Scheme (AIS) by IRAS. With that, you’ll be able to submit all the required information electronically and directly onto the tax portal. Currently, the registration deadline for YA 2022 is 31 December 2021.
3. How can Kayaroll help me elevate the IR8A submission further?
At Kayaroll, we strive to minimise your need to attend to time-consuming administrative tasks. With our automated payroll software that is IRAS compliant and compatible with the AIS, you won’t need to break a sweat over human error or reduced efficiency. Our team understands how precious time is when managing your SME or start-up, so let us take some load off with our exclusive payroll software, completely FREE for the first 100 sign-ups on our site!