In relation to each Basis Period that runs form the 1st January to the 31st of December, employers must lodge their employee’s income with the Inland Revenue Authority of Singapore (IRAS) or issue IR8A forms to their employees by the 1st March each year. Following that, employees must declare their annual income with the IRAS by the 15th of April each year. With the electronic lodgement cut off date being the 18th of April.
The below article will guide you through the process of making sure that your settings in the payroll platform are correct for both your business and your employees regarding end of year, and will highlight any relevant reports you can use as well.
Review Configuration Data
Your organisations IRAS Settings allow you to select whether you will be lodging your income data electronically via the AIS or manually via a form. If you select the electronic option, you will not be able to change this selection once data has been lodged.
Business phone number
To lodge electronically you need to have entered your businesses listed phone number on your Business Details page within your payroll platform.
Employee email address
Ideally, each employee should have an email address on file and will then allow you to send a notification email directly from the platform to your employees. You would do this after you have lodged the IRAS Lodgement report to notify them that their Income information is ready. These notifications will go to the email address on the employee's details page. A quick way to check these details is to export the employee list and review the data in Excel.
Employee date of birth
To lodge electronically, your employee will need a data of birth entered. If you have our HR platform you will need to make this change om this platform via the Personnel Details page. If you only have our payroll platform, you can refer to the following article.
You will need to review your Pay Categories to make sure that the Payment Classification field has the Gross Salary, Fees, Leave Pay, Wages and Others option selected. If you set the Payment Classification up incorrectly, it only needs fixing at the pay category level, not on a per-individual employee basis.
Review your organisation's deductions. For any platform default deduction categories, we have already set the payment classification and you are unable to edit the payment classification of these entries When you apply a payment classification to a deduction category, any deductions made using the deduction category will report in the relevant part of the employee's remuneration summary to the IRAS. The various options should be as follows:
- Donation: Any amounts you pay to self-help groups (SHG’s) or Community Chest for your employees.
- Contribution: Any amount you pay to the Mosque Building Fund for your employees.
- Life Insurance Premium: Any amount you pay for Insurance Premiums for your employees.
If none of these options describe the intended use of the deduction category within your business, then leave the Default option selected.
Initial Values / Opening Balances
If you have migrated to this payroll from another platform during the basis period, it is important that you set up the opening balances correctly. If you set up your Employment Hero Payroll platform for your business in the previous basis period but did not start using it until this basis period, you may need to review the initial financial year setting on the Opening Balances page. We will include amounts added to opening balances in earnings for the year and will include the data in both the IRAS and CPFB reporting based on your pay category settings.
Finalise Pay Runs
Make sure that all pay runs are finalised, including any adjustments you need to make. If you complete your IRAS Lodgement and then have to process adjustment payments, you must lodge an amendment to refresh the data and submit any differences.
So we strongly suggest you hold off on starting the finalisation process until you are 100% confident you have processed all payments for the end of year.
When you select a date range for the report, we will base the result of the report on period end date; i.e., if a pay run has a period end date that falls within the selected date range, we will capture the data of that pay run in the report.
Generate IRAS lodgement report
Ready to proceed? Once you have completed the steps above, you will be ready to generate, download and publish annual income details for your employees via the IRS Lodgement report.
The following reports are relevant in relation to the End of Year process and are available within the payroll platform:
- IR8A details report: The IR8A details report lists the total earnings for the selected basis period. The values displayed should align with the values displayed in the IRAS Lodgement report and associated IRAS forms.
- IRAS Lodgement report: Allows you to generate, download and publish annual income details for your employees.
- Additional IR8A forms: Includes appendix 8A, appendix 8B and IR8S forms. You will need these forms if an employee has received benefits in kind or if they have made any gains/profits from employee share plans, or if you made voluntary employer CPF contributions.
- Benefits in Kind report: Although this report is purely for information purposes, it is handy during the end of year process as it indicates which employees should have an Appendix 8A form produced at the end of the basis period.
- Employee Share Plans report: Although this report is purely for information purposes, it is handy during the end of year process as it indicates which employees should have an Appendix 8B form produced at the end of the basis period.
- Excess CPF contributions report: Although this report is purely for information purposes it is handy during the end of year process as it indicates which employees should have an IR8S form produced at the end of the basis period.
The following reports are relevant in relation to the End of Year process; however, these are NOT available within the payroll platform, and will have to be managed manually:
- S45: If withholding tax is deducted from an employee’s income, the employer must complete a S45 notice and pay the withheld tax to the IRAS by the 15th of the month following the payment. The S45 notice can be lodged through the mytax portal via an online form or spreadsheet upload
- IR21: Employers must obtain tax clearance for foreign employees who are ceasing employment and leaving the country. This clearance will confirm the amount of tax to be deducted from the final pay. To obtain tax clearance employers must submit an IR21 notice to the IRAS. The IR21 notice can only be submitted via a paper form in the post or via the my tax portal.
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