Auto-Inclusion Scheme (AIS) for Employment Income
Participation is compulsory for those who fall within the gazette under S68(2) of the Income Tax Act. However, IRAS welcomes all employers, regardless of the number of employees, to join AIS. Employers participating in the AIS are required to submit their employees’ employment income information to IRAS electronically.
From YA 2022, participation in the AIS is compulsory for employers:
1. With 5 or more employees including: Full-time resident employees; Part-time resident employees; Non-resident employees including those who are based overseas and are required to render service in Singapore during the year (exclude details of employment income where clearance has been filed); Company directors (including non-resident directors); Board members receiving Board/Committee Member Fees; Pensioners; and Employees who have left the organisation but were in receipt of income in reporting year (e.g. stock option gains), or
2. Who have received the “Notice to File Employment Income of Employees Electronically under the Auto-Inclusion Scheme (AIS)”
Employers who have fewer than 5 employees are encouraged to join AIS.
“All classes of persons” as defined in the gazette under S68(2) of the Income Tax Act are: Full-time resident employees; Part-time resident employees; Non-resident employees including those who are based overseas and are required to render service in Singapore during the year (exclude details of employment income where clearance has been filed); Company directors (including non-resident directors); Board members receiving Board/ Committee Member Fees; Pensioners; and Employees who have left the organisations but were in receipt of income in the reporting year (e.g. stock option gains).
Important Information for Employers
Employees who have sought tax clearance (Form IR21)
Employers are not required to submit the details of employees’ income information for employees who have sought tax clearance. However, if there are additional income for these employees, please submit an additional IR21.
Sole Proprietors and Partners
As Sole-Proprietors and Partners are owners of their own businesses, the salaries drawn from the businesses are taxable as trade income. The income information of these sole-proprietors and partners should be excluded via the Auto-Inclusion Scheme.
The income information of partners who are engaged under an employment contract with the partnership should be submitted as employment income via the Auto-Inclusion Scheme. Generally, these partners do not assume the liabilities of the partnership and they do not have a share in the profit/ loss of the partnership. They are considered employees of the partnership even though they have the title of ‘partner’.
Employers under AIS have to declare the employment income information of all their employees, including non-resident directors. If Section 45 withholding tax has been paid on director’s fees payable to a non-resident director, indicate select ‘Y’ under ‘Section 45 (applicable to non-resident director) Indicator’ when reporting via AIS.
Employees Posted Overseas
You are not required to submit their information only when the non-resident director solely receives director’s fees.
As of 1 Jan 2004 (Year of Assessment 2005):
- remittance from overseas employment is not taxable;
- any excess CPF contribution by the employer is not taxable; and
- employee’s CPF contribution is also not deductible
- Overseas posting incidental to Singapore employment
- Income arising from overseas employment which is incidental to a Singapore employment is taxable in Singapore. Employers are required to submit the details of employees’ income and CPF contribution for the year.
- Overseas posting not incidental to Singapore employment
Employers are required to select ‘Income from Overseas Employment’ under ‘Remission/ Exempt/ Non-Taxable indicator’; regardless whether the overseas posting is for the whole year or part of the year.
Employers are required to report for their employees’ donations/ contributions to Mosque Building Fund and/ or life insurance premiums paid through their salaries.
Employees Rehired within a Year
When an employee leaves and re-joins the organisation in the same year, please consolidate the employment income information and submit as one record.
Trainees and Students on Attachment
Employers must submit the employment income information for students who enter into an employment contract with the employer in Singapore and remuneration is paid for the services rendered.
There is no need for submission of allowance information if there is no employment contract and the students are only given an allowance for defraying the costs of travelling and meals during the training period.
Foreigners or Expatriates
Employers must submit employment income information for foreign and expatriate employees. Submission is required regardless of the income amount or the duration of employment.
Employers are required to use the Foreign Identification Number (FIN) issued to foreign employees by Ministry of Manpower (MOM) or Immigration and Checkpoint Authority (ICA) in their submissions. A valid FIN must consist of a prefix ‘F’/ ‘G’, with seven digits and a check-digit. E.g. F1234567A or G7654321R.
Information on registration can be found here.
Information on reporting employee earnings can be found here.