The Auto-Inclusion Scheme (AIS) is a system where employers electronically submit their employees’ employment income details to the Inland Revenue Authority of Singapore (IRAS). Subsequently, IRAS automatically incorporates this information into the employees’ online tax returns and assessments.

Here’s how it works:

Employers are required to compile all employment income information and submit it via AIS software by 1st March. Following this, IRAS includes this data in the tax returns of employees. Consequently, when employees file their tax returns, their employment income information is already included.

Employers no longer need to provide hardcopy IR8A forms or any supporting documentation to their employees. Instead, they can furnish a statement of earnings or a copy of the IR8A for reference purposes.

This system simplifies the tax filing process for employees and may potentially qualify them for the No-Filing Service in the future.

What is the latest update?

From the Year of Assessment (YA) 2024 onwards, participation in AIS is mandatory for employers with five or more employees, including

  1. full-time resident employees
  2. part-time resident employees,
  3. non-resident employees required to provide services in Singapore, including those based overseas (excluding details of employment income where clearance has been filed),
  4. company directors (including non-resident directors),
  5. board members receiving Board/Committee Member Fees,
  6. pensioners, and
  7. employees who left the organization but received income during the reporting year (e.g., stock option gains).

Alternatively, employers who have received the “Notice to File Employment Income of Employees Electronically under the Auto-Inclusion Scheme (AIS)” are also mandated to participate.

 

Some Important Information for Employers

Employees who have sought tax clearance (Form IR21)

Employers are not required to provide income details for foreign employees who have terminated their employment within the year and whose income has already undergone assessment through tax clearance. However, if any additional earnings have not yet been disclosed and assessed for these employees, the employer must submit an additional Form IR21 for the supplementary income.

Sole proprietors and partners

Sole proprietors and partners are proprietors of their respective businesses. The income they derive from these enterprises should be omitted from the AIS submission. However, there is an exception to this rule. If a partner is designated as a salaried partner under an employment contract, they are regarded as an employee of the partnership. In such cases, the income details of the salaried partner should be submitted as employment income through the AIS.

Non-resident directors

Employers are obligated to provide the employment income details of all their employees, which includes non-resident directors. However, there is no requirement to submit their information if the non-resident director solely receives director’s fees.

Rehired employees within a year

Employers are advised to merge the employment income information for employees who depart and subsequently return within the same year, and submit it as a single record.

Students on internship or traineeship

Employers are required to provide employment income details for students who engage in an employment contract in Singapore and receive remuneration for their services rendered. However, there is no requirement to submit allowances if the following conditions are satisfied:

  1. The student is mandated to undergo a business or industrial attachment with a local organization as a compulsory component of their educational program.
  2. The student solely receives subsistence allowances intended to cover their daily expenses, board, and lodging in Singapore.

Foreigners or expatriates

Employers are obligated to provide employment income details for both foreign and expatriate employees if they receive income for services rendered in Singapore throughout the year.

Employers are mandated to incorporate the Foreign Identification Number (FIN) issued to foreign employees by either the Ministry of Manpower (MOM) or the Immigration and Checkpoint Authority (ICA) in their AIS submissions. A valid FIN should contain a prefix of ‘F’, ‘G’, or ‘M’, followed by seven digits and a check digit. For instance, examples of valid FINs include F1234567A or G7654321R.

 

Put in your calendar today

Registration for the AIS for the Year of Assessment (YA) 2024 is closed. However, registration for YA 2025 will be open from 1st April 2024 to 31st December 2024.