Running a business is hard work. For small businesses, it is even more daunting as business owners and employees often have to double or even triple hat different roles in sales, marketing and human resource to keep running costs down. With the myriad tasks involved in ensuring that a business stays profitable, the last thing that anyone wants to do is to prepare hardcopy tax returns when tax filing season rolls around in 2024.
IRAS’ Auto-Inclusion Scheme (AIS) takes away the hassle of issuing paper Form IR8A to employees and simplifies tax filing for employees. Employers just need to adopt a payroll software integrated with AIS Application Programming Interface (API) Service to send their employees’ employment income details directly to IRAS or submit it online via myTax Portal.
Currently, AIS is compulsory for employers with 5 or more employees – including full-timers, part-timers, company directors and board members. If your company has fewer than 5 employees, you can also sign up for AIS.
Find out about the 5 benefits of AIS. Sign up for AIS between 1 April and 31 December 2023 to enjoy its benefits for Tax Season 2024.
Benefit 1: Time-savings
Employers save time on issuing hard copy Form IR8A. With AIS, employers can send their employees’ employment income details directly to IRAS from their payroll software or submit it online via myTax Portal, doing away with employees’ manually keying in their income details. More details on filing seamlessly from software can be found on the IRAS website.
Benefit 2: Accuracy
Auto inclusion reduces the risk of errors by employees which could occur during manual data entry in myTax Portal. This can result in more accurate tax submissions and reduce incurring fines or penalties for incorrect tax returns. By using payroll software, there are certain features in some software which could improve accuracy of AIS submission, e.g. auto-computation of benefits-in-kind amount.
Benefit 3: Convenience
Employers and employees both enjoy convenience with AIS. Employers are able to fulfil their AIS obligations easily by sending their employees’ income directly to IRAS. Employees whose employers are on AIS may be selected for the No Filing Service (NFS) where they do not even need to file an income tax return as their employment income is auto-included. In 2023, more than 100,000 employers participated in the AIS – the highest number since IRAS started AIS.
Benefit 4: Digitisation
With AIS, businesses are nudged to migrate from paper documentation to digital records for their payroll management. Using payroll software to transmit tax returns to IRAS allows businesses to achieve efficient and accurate recording of employees’ income data, ensuring compliance with IRAS’ record keeping requirements.
Benefit 5: Eco-friendly
Sign up for AIS and hop on the sustainability bandwagon with IRAS. IRAS is committed to environmental sustainability and aims to embed sustainability in our core business. With AIS, employers eliminate hardcopy Form IR8A and do their bit for the environment.
Timeline for AIS sign-up
1 Apr – 31 Dec 2023: Employers sign up for AIS for Tax Season 2024
6 Jan – 1 Mar 2024: Employers submit employee’s income information to IRAS
1 Mar – 18 Apr 2024: Employees file taxes during Tax Season 2024