The Auto-Inclusion Scheme (AIS), as the name suggests, is a scheme under which employers or companies will electronically transmit information relating to their employees’ income to IRAS. The information that is submitted is automatically considered for income tax assessment.
From the year of assessment (YA) 2018, any company or firm that has more than 9 employees is mandatorily required to participate in AIS. The companies who have received the “Notice to File Employment Income Of Employees Electronically” also need to enrol for the scheme.
If you are an employee, you can visit the IRAS website in order to check whether your employer is listed in the AIS directory.
If you are an employer, you will first need to prepare all the information pertaining to your employees’ income and submit it through AIS before 1 March. Once this is done, IRAS will automatically include the submitted details for tax returns. When the employees’ file their tax returns online, their information is already available as it is auto-included.
You do not need to provide any hard copies of IR8A and supporting forms to your employees. You can provide them with employee earnings or a copy of IR8A for their reference.
Your company employees can easily file their tax returns as this will be a lot simpler. Employees may also enjoy no filing service in the future.
Since sole proprietors and partners are owners of the company, any income that is generated from their business is taxable and considered as a trading income. Hence, it should be excluded from AIS submissions.
Partners who have an employment contract with the company are considered as employees. Their names should be included in the AIS submission. These partners do not share the profit/loss of the organisation. Although they carry the title of a partner, they do not have any liabilities associated with the partnership.
Please note that the company has to prepare the forms and submit it for all the employees.
It is mandatory for a company with the gazetted number of employees to furnish the employee income information to IRAS electronically.
Failing to do so will attract a penalty from IRAS which could amount to S$1,000 under Section 94 of the Income Tax Act. In order to check if you are listed under this category, you will need to click on the auto-inclusion scheme for employment income link located in the useful links section (on the IRAS website).
Employers are strongly urged to join AIS regardless of the employees they have in their company. In order to facilitate a simpler submission process, employers can also register for the CPF data link-up service. Auto-inclusion scheme can be registered through myTax Portal. However, this should be done soon as this closes on 31 December.
The AIS submission process consists of 3 simple steps listed below:
Please note that only authorised individuals with approver privileges can access information (submit employment income records). A person with approver privileges can prepare and submit the information through myTax Portal. However, a person who simply has a preparer role will not be able to submit the information via myTax Portal. For detailed information on how to authorise a person, you will need to refer to the authorisation guide (useful links section) available on the IRA website.
Employers can choose from 3 software applications to submit the information.
If you are using an IRA compatible payroll software, you will need to download “Validation and submission” application. If you are unsure on whether your payroll software supports the AIS submission, you will need to check the payroll software vendor link that is available in the useful links section (IRAS website).
In case your software does not support AIS submission or if you have manually recorded the information relating to your employees using spreadsheets, excel, etc, you can do the following:
Employers are required to sign up for CPF data link up service using myTax Portal. This facilitates IRAS to retrieve employees’ data, annual income, and information related to deductions.
Companies are required to start sending their annual submissions of income starting from January. The gazetted deadline to furnish the employment income is on 1 March. It is best advised to finish the submission process by 10 February to avoid any hassles.
You will need to ensure that the information you are submitting is accurate. You will need to check whether the information pertaining to bonuses, salaries, director fees, other employment income, stock options, CPF contributions, deductions for all the employees are precisely entered.
If the supporting forms such as IR8S, Appendix 8A, Appendix 8B are applicable, you will need to make sure that they are submitted along with IR8A by 1 March. The amount reported in the supporting forms should match the information on the IR8A form. This is also applicable when you submit amendment files (if any).
Amendments may be necessary when you find inaccurate information. You will need to make changes to your submission in the following scenarios:
You do not need to submit your amendment files in the following cases:
In the above scenarios, you can email the changes to IRAS via myTax Mail by logging into mytax.iras.gov.sg. You will need to use your SingPass or IRAS PIN. All amendment files should be submitted before 31 March.
The system works by summing up all the amounts that are submitted for each of the respective employees. When you find any errors, you can follow the steps below to resolve this issue:
For instance, if you have an actual salary of S$30,000, but the data is incorrectly submitted as S$25,000, the under-declared amount here is S$5,000. Therefore you will need to submit an amendment record in the salary field with the under-declared amount as S$5,000.
However, if you have over-declared the amount at the time of your submission, your amendment record should include the over-declared amount in the salary field. If you have received a bonus of S$5,000, but have submitted the data amounting to S$8,000, your amendment record should include the over-declared amount that should be nullified.
If there is an omission of an employee record, you are required to submit one original record for the omitted employee’s record.
If you notice any errors in the employee ID, you are required to submit one amendment record for the submitted employee ID number. This should also include one original record for the ID number and all the negative amounts that should be negated (to the submitted amounts).
For detailed information on how to prepare amendment files, you will need to access the useful links section and click on the “Amendments to submitted information” link.
Since employee information is auto-included, employees will need to verify the following at the time of filing their returns:
If you are an employee who is filing tax through myTax Portal, you will need to file your tax by 18 April. However, if you are opting for paper filing your tax, you will need to submit it by 15 April.
If employees receive an intimation from IRAS through SMS, letter or forms, they are required to file their income tax returns. Tax filing is made easy to the employees as you (employer) would have already included the necessary employee income information to IRAS.
Upon accessing the myTax Portal, employees will only need to verify the auto-included details, acknowledge that the details entered are precise, click on the submit button.