Employer’s Responsibilities in Tax Reporting
For tax residents of Singapore, the time for calculating and filing their annual income over the previous year is from the 1st of March and 18th April. In the city-state, even foreigners who are neither Singaporeans nor Singapore Permanent Residents (SPRs) need to pay tax if their income accrued in or derived from the city-state. During this period, employers, regardless if you operate a sole proprietorship, local business, or as a director who has a company incorporated in Singapore, have responsibilities to report the earnings of your employees.
As required under S68 (2) of the Income Tax Act, all employers must prepare Form IR8A and Appendix 8A, Appendix 8B of Form IR8S (where applicable) for all their employees who are employed in Singapore by 1st March each year. Employers shall give to all employees the relevant completed forms by 1st March so that they can file their income tax returns on time.
For those employers who have twenty (20) or more employees for the entire year ending 31st of December or who have received the “Notice to File Employment Income of Employees Electronically” must submit their employees’ income information to Inland Revenue Authority of Singapore (IRAS) electronically. As a matter of fact, IRAS encourages all employers to join the Auto-Inclusion Scheme (AIS) for Employment Income. Under this scheme, employers just need to submit their employees’ income information to IRAS electronically. The employment income information will be shown on the employees’ electronic tax return and automatically included in their income tax assessments. If the employers participate in the AIS for Employment Income, they will not need to issue Form IR8A to their employees anymore. Otherwise, they must provide all employees the relevant completed forms by 1st March each year.
As an employer in Singapore, you must know your responsibilities and comply accordingly to avoid any legal problems in the future.