What is the Auto Inclusion Scheme (AIS)?

What is the Auto Inclusion Scheme (AIS)?

Employers are required to provide the Inland Revenue Authority of Singapore (IRAS) with information about their employees’ income (from Jan to Dec of the previous year) by 1st March every year. 

Thanks to the Auto-Inclusion Scheme (AIS) however, there is no need for hardcopy IR8A forms anymore. Everything can now be submitted electronically to the IRAS — making the process less tedious. 

So what does this mean for accountants and outsourced payroll providers like you? Read on to find out.  

What is the purpose of the AIS? 

The Singapore government is constantly streamlining the tax system to make it easier and more efficient for businesses and employees. The AIS is aimed at removing unnecessary manual work, and help employers save precious time through fuss-free electronic submissions. 

Employers will no longer need to issue hardcopy IR8As and the supporting forms to employees, and the electronic submission process also makes it easier for amendments to be made if necessary. 

The AIS also helps to benefit employees significantly, because the submitted income information will be auto-included in their tax returns for verification and tax filing.

Lastly, it also enables companies to go paperless and do their part for the environment.

What are the deadlines and penalties of AIS? 

Employers are required to submit their employees’ income information to IRAS electronically by 1st March every year. 

From 2023, it is compulsory for businesses to join the Auto-Inclusion Scheme if they have 5 or more employees in the company, or if they have received the "Notice to File Employment Income Of Employees Electronically under the AIS”.

The penalty for non-compliance is a fine not exceeding $1,000, or imprisonment of up to 6 months under Section 94 of the Income Tax Act. 

What employment income information needs to be submitted through AIS? 

There are a total of 4 forms to be submitted via the AIS. The IR8A form is a mandatory form, whilst the other forms are supporting forms which only need to be submitted if applicable.

Form IR8A: Used for all employees, contains employee’s remuneration data for the selected period

Appendix 8A: For employees who receive benefits-in-kind (such as housing and accommodation benefits; car benefits; all other perks that are not salary)

Appendix 8B: For employees who derive share option gains or benefits from Employee Stock Option Plans (ESOP) or Employee Share Ownership Plans (ESOW)

Form IR8S: If employers have made excess CPF contributions on your employees’ wages and/or have claimed or will claim refunds from the Central Provident Fund (CPF) board

Note: For Form IR8A, non-executive directors are not considered employees. Employers participating in AIS need to inform these directors to report their income separately in their own tax returns.

How can KeyPay help you lodge the employment income information for your clients electronically via the AIS? 

IRAS partners with payroll software vendors to help facilitate the preparation and submission of employment income information, and KeyPay is proud to be one of the supporting payroll software vendors listed on IRAS for AIS. It can integrate directly with IRAS’ server to submit employment income information, and also generate files in the required format. 

With KeyPay, you can service your clients much more easily, efficiently, and on time — with reminders to lodge employee income data to IRAS before the deadline via the platform. It also makes things much more convenient for you especially if you’re servicing multiple clients.

Publish the IRAS Lodgement Report in just a few clicks — once you’re done, hit the ‘Lodge’ button and the selected data will be sent electronically to IRAS directly. It’s never been easier to manage your clients’ needs via an all-in-one platform. Work smarter not harder with KeyPay today. 

Carissa Ng

Content Marketing Specialist (SEA)

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