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What every employee should check even if you're under the Auto-Inclusion Scheme

When IRAS first introduced the Auto-Inclusion Scheme (AIS), it helped to facilitate the bulk of the filing to be done online and by your company. As an employee, you should still make sure that the tax filing is done correctly! We’ve invited Samantha Sam, Principal Partner from CPA Connects, to share a few key things that you should check, even if your company is under the AIS.

Taxable income check #1: Non-contractual bonuses

Non-contractual bonus is only taxable upon payment or made payable to the employee during the tax period.

Taxable income check #2: Employee’s CPF contribution

Make sure that you declare the employee’s portion of CPF only. Find out more about CPF contributions in our CPF guide for employers!

Taxable income check #3: Donation

If you are doing some donations through the company such as CDAC and Merdeka Fund, make sure it is declared in your Auto-Inclusion Scheme because this counts towards double deductions or 2.5 times deductions for your tax.

Taxable income check #4: Allowance

Make sure the allowances that are non-taxable are not included.

For example, your taxi claim is not considered an allowance if it is given by your company to reimburse your expense.

Taxable income check #5: Lump sum payment

You should also check if your lump sum payment is accurate. Items such as retrenchment payment, injury payments, or retirement benefits that are received from tax-exempt pension schemes/funds should not be counted as your gross pay and therefore are not taxable.

If the company gives something like an ang bao as a token like fifty or ten dollars, these are usually not taxable. But if it is part of your bonus, it will be taxable.

What are some examples of taxable lump sum payments?

  • Gratuity paid for completing “x” years of service
  • Payment made to a potential employee to induce him to join the company
  • Salary in lieu of notice/notice pay paid by employer to employee to compensate for early termination

Taxable income check #6: Employee Stock Option

If you are working in a start-up or a company that provides shares as a form of payment, you’ll need to declare any gains or profits from the employee stock option properly. But do note that some of these stock options are actually tax-exempted. So before you declare, make sure you check with IRAS on the amount.

Finally, make sure you always check what your tax bracket is. If your tax bracket falls under the correct bracket, you actually pay the most optimal amount of tax. So during the tax filing season, remember to file your tax early and always double-check before you file.

How can Payboy’s HR software help with AIS Submission for employers?

Even when your company is under AIS, your employer will still need to prepare the employment income information that complies with IRAS’ format and submit it electronically to IRAS by 1 March every year.

Employers are strongly encouraged to use payroll software integrated with the AIS Application Programming Interface (API) Service to facilitate employers’ preparation and submission of the employment income details. In fact, Payboy is proud to be one of the supporting payroll software vendors for AIS listed on IRAS, which means that our software is able to support AIS submission by:

  • Integrate directly with IRAS' server to submit employment income information through Application Programming Interface (API), and/ or
  • Generate TXT/ XML files in the required format and can be submitted using the Validation and Submission Application.

Benefits of using Payboy’s payroll module with an accounting software:

  1. 100% Compliant and 100% peace of mind
    • Prepare your e-submission of CPF contributions with a few simple clicks on Payboy! 
  2. Covers any work arrangement
    • Working with full timers, part timers, freelancers and contract staff? We’ll take care of the unique payroll requirements for each working arrangement.
  3. Transparent, Accurate and Simple
    • Full visibility on how payroll is calculated automatically based on shifts, attendance, leave and submitted claims, within an intuitive experience.
  4. Fully integrated with your preferred platforms
    • We’ll fit into your ecosystem seamlessly and keep your finance team happy. Check out our full list of integrations.

Are there any SME grants available if I’m interested in using Payboy HR software?

Yes, Payboy is eligible under the PSG Grant! You can find our answers to your questions regarding PSG grant here.

Find out how you can do it all with Payboy

Reach out to us if you are keen for a free demo on how we can help you save hours and give you some peace of mind on payroll and other HR matters so that you can focus on your business and people.
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