Employers are required under Section 68(2) of the Income Tax Act to prepare a return of remuneration for the following classes of persons:
- Full-time resident employees
- Part-time resident employees
- Non-resident employees
- Company director (including non-resident director)
- Pensioner
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Who to include in Auto-Inclusion Scheme for Employment Income?
Remuneration information of all classes of persons, as defined under Section 68(2) of the Income Tax Act are to be transmitted to IRAS under the Auto-Inclusion Scheme for Employment Income.
Local Employees
With effect from 1st January 2004 (Year of Assessment 2005), remittance on overseas employment income is not taxable. Thus, excess employer’s CPF contributions are not taxable and employee’s CPF contributions are not allowable for deduction. Hence you are not required to complete the Form IR8A/ IR8S during the period your employees are posted overseas. You may give them a separate statement of income accrued during their overseas posting.
If an employee left and re-joined the company during the same year, you can consolidate the two records into one and furnish the earlier date of commencement and later date of cessation. If you send 2 separate records for the 2 periods of employee, please send the second record in an amendment file.
Foreigners or Expatriates
Please note the following:
- Furnish their FIN (Foreign Identification Number) or Employment Pass Number
- If tax clearance (IR21) has been sought, you may exclude the record in your annual transmission. If your payroll software is not able to exclude these employees, you can still include them in your transmission
Directors
Director refers to an officer (that is, someone who works for the company) charged with the conduct and management of its affairs. The directors collectively are referred to as a board of directors. You have to include them in your submission.