What is an IR8A form?
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IR8A form 2021 is completed by the employer about the earnings of their workers. What is IR8A form? It is one of the forms that are mandatory reporting on wages. In addition to this form, Appendix 8A, Appendix 8B, and Form IR8S. IR8A form 2021 must be completed for those employed and submitted by March 1 of each year.
An IR8A form must be completed for all workers who are:
- Permanent Resident Officers
- Part-time resident workers
- Non-resident workers, including those who are overseas and must provide services for a year (excluding income from work, if authorized)
- Director of the company
- Board members receiving remuneration for board members/committees
- Workers who quit but still received a salary in 2021 (for example, profit from stock options).
For overseas placement of workers of non-Singaporean working, please note that hirers don’t need to indicate the number of overseas labor earnings on IR8A form 2021. Workers participating in AIS must only select earnings from Overseas Employment under Income From exemption from taxes/deductions.
After answering the question of ‘what is an IR8A form?’, you should understand the organization of remuneration in Singapore.
Organization of payroll in Singapore
Successful payroll management requires flawless and seamless communication between two strategically essential departments in any company- Human Resources, and Finance. The careful calculation, control, and accounting of payroll are essential for compliance, planning, and budgeting. Timely payments, completing the IR8A form 2021 required deductions, and properly completed reporting are necessary to keep workers happy.
The purpose of this guide is to help you get an overview of some of the key elements of payroll management in Singapore and understand IR8A’s meaning. As the business grows and new workers are recruited, payroll and regulatory compliance become more complex and require both human and software expertise. Large companies can afford such resources within the organization, but most small and medium-sized enterprises will find it more economical to outsource their payroll work.
What is included in the concept of wages? According to the Singapore Employment Law, wages are defined as all remuneration, including any benefits, paid to workers for work performed under an employment contract. There are no minimum wage requirements that the employer must meet. The amount of wages is determined by mutual agreement between the employer and the workers. Wages, or gross salary, does not include the following:
- Additional payments, such as overtime pay, bonus payments, or annual salary supplements
- Any compensation for expenses incurred in the course of employment
- Productivity awards
- Benefits for travel, meals, or accommodation.
Obligatory reporting of wages
Under the IRS Automatic Inclusion Scheme, workers’ who have 15 or more workers throughout the year or who receive an Electronic worker’s Income Notice are required to submit their workers’ earnings information to the IRS electronically. By March 1 of each year, namely, complete IR8A form 2021. Such information, submitted electronically, will be reflected in the tax return of workers’ earnings and will be used to assess their tax liabilities. So this means that the employer must prepare Form IR8A (for all workers) and Schedule 8A (for non-cash earnings), Schedule 8B (earnings from workers Share Purchase Options), or Form IR8S (if surplus contributions to the Central Savings Fund were listed) for all workers) by March 1 of each year. Employers who participate in a mandatory inclusion scheme should not issue IR8A meaning to their workers. However, it is recommended that you provide them with a copy of their archives.
Tax clearance is a means to ensure that all foreigners working in this country are complying correctly with their tax obligations. Every worker is required to notify the IRS of their foreign workers and requests tax clearance by filing Form IR21 at least one month before such workers
- stop working for a worker;
- will be appointed to a post abroad;
- will leave Singapore for any period exceeding three months.
If a tax clearance document has not yet been issued in respect of the workers), the worker must withhold all payments, including salaries, bonuses, overtime pay, vacation pay, benefits, severance pay, and lump-sum payments to the workers), due from the date on which
- the worker notifies of their decision to quit/leave this country;
- the worker decides to terminate the job contract;
- the worker decides to transfer the workers abroad.
Payments must be withheld for 30 days from the day the workers notify the IRS using Form IR21 or the issuance of the tax clearance directive, whichever occurs first.
Storage of reports. From the fiscal year 2008 onward, workers are necessary to keep properly completed income and deduction statements of all workers filed with the Singapore Tax Authority for five years.
Obligatory payroll breakdown. Effective April 1, 2016, all workers are necessary to provide all workers covered by the Employment Act with an itemized payroll and a list of essential working conditions.
Salary bills are issued once a month and contain the following information:
- Employer’s full name
- Full name of the workers
- Payment date
- Start and end date of each billing period
- Benefits Paid (Fixed and Special)
- Additional payments (bonuses, weekend payments, and public holidays)
- Deductions (fixed and special)
- Overtime worked
- Overtime pay
- Start and end date of each settlement period for overtime pay (if different from the start and end date of the standard settlement period)
- Net wages paid per month. These amendments were made to eliminate confusion, reduce disputes in the workplace, and provide workers with a better understanding of how their wages are calculated, their working conditions, and the benefits available to them.
Failure to do so will result in a fine of S $100 to S $200 per worker and violation.