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Employers Guide to the IRAS Auto Inclusion Scheme

The Singapore government is constantly streamlining the tax system to make it easier and more efficient for businesses and employees — which is why they’ve introduced the Auto-Inclusion Scheme (AIS).

As a business owner, you might be confused over the complexities of the IRAS Auto Inclusion Scheme; and at a loss on whether your business is eligible for the scheme, how do you register for the scheme, and more. We’re here to help you gain a better understanding on all that.

In this short guide, we cover:

  • Is it compulsory to join the Auto-Inclusion Scheme?
  • Is my company registered under the Auto-Inclusion Scheme?
  • How do I register for the Auto-Inclusion Scheme?
  • How payroll software can help your business manage the changes

Download the free guide now.

What is the Auto Inclusion Scheme (AIS)?

The Auto-Inclusion Scheme (AIS) is a tax scheme administered by the Inland Revenue Authority of Singapore (IRAS), where employers can submit employment income records of their employees electronically. IRAS then auto-includes this information in the employees’ online tax returns and assessments.

Is my company eligible for the Auto Inclusion Scheme?

All companies are encouraged to join the IRAS AIS regardless of their size or number of employees — the AIS registration for Year of Assessment (YA) 2024 is open from 1 Apr 2023 to 31 Dec 2023.

Is AIS compulsory for all Singaporean businesses?

From 2023, it is compulsory for Singaporean businesses to join the Auto-Inclusion Scheme if you have 5 or more employees in the company, 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 a non-resident director);
  • Board members receiving Board/Committee Member Fees;
  • Pensioners; and
  • Employees who have left the organisation but were in receipt of income in the reporting year (e.g. stock option gains).

Employers who have been identified by IRAS to join the AIS will also receive a notification letter. If you’ve received the ‘Notice to File Employment Income of Employees Electronically under the Auto-Inclusion Scheme (AIS)’, you will also be required to join the scheme.

Download the free guide to find out more.

When is the AIS submission deadline?

Employers will be able to submit their employees’ employment income information to IRAS from 6 January to 1 March every year.

Benefits of the Auto Inclusion Scheme

With AIS, employers no longer have to issue hardcopies of the IR8A form and supporting forms to employees, and a statement of reference or copy of IR8A can be given to employees for reference.

It allows employers to be more environmentally-friendly and go paperless, enjoying a fuss-free experience in submitting employment income information electronically. This alternative to the offline application also facilitates the usage of payroll software to help businesses automate calculations and streamline processes, encouraging digital transformation and increased productivity.

The AIS also helps to simplify income tax filing for employees, with the convenience of No-Filing Service (NFS) — meaning IRAS will pre-fill the amount in an employee’s income tax return based on the information they’ve received from the employer. Employees will just need to verify the employment income and deductions that have been auto-included in their online income tax returns.

It’s a win-win situation for both employers and employees.

What documents do businesses need to prepare for submission via the Auto Inclusion Scheme?

Here’s a helpful list of documents that you should prepare for submission to IRAS, to prevent a last minute rush. The IR8A form is a mandatory form that needs to be submitted to IRAS electronically, whilst the other forms are supporting forms which only need to be submitted if applicable.

  • Form IR8A: Used for all employees, contains employee’s remuneration data for the selected period
  • Appendix 8A: For employees who receive benefits-in-kind (such as housing and accommodation benefits; car benefits; all other perks that are not salary)
  • Appendix 8B: For employees who derive share option gains or benefits from Employee Stock Option Plans (ESOP) or Employee Share Ownership Plans (ESOW)
  • Form IR8S: If employers have made excess CPF contributions on your employees’ wages and/or have claimed or will claim refunds from the Central Provident Fund (CPF) board

Note: For Form IR8A, non-executive directors are not considered employees. Employers participating in AIS need to inform these directors to report their income separately in their own tax returns.

How can Employment Hero help file employment income electronically?

Employment Hero is proud to be one of the supporting payroll software vendors listed on IRAS for AIS, which means our IRAS approved payroll software supports direct API submissions. It can integrate directly with IRAS’ server to submit employment income information, and also generate files in the required format. Let us do all the heavy lifting and help you with compliance, so you can focus your time and energy on more strategic work for your business.

Regardless of whether you’re working with full time employees, or part-timers, freelancers, and contract staff — our cloud-based software will help you take care of the unique payroll requirements.

We streamline your CPF calculations and SDL deductions, so you can feel confident each payroll run. Access all IR8A and additional forms within the platform, and generate your IRAS lodgement report easily.

With automated calculations, you can prepare your e-submission in just a few clicks, and submit documents to IRAS much more seamlessly and efficiently — hit the ‘Lodge’ button and the selected data will be sent electronically to IRAS directly.

Other benefits of Employment Hero’s payroll software for Singaporean SMEs

Using a payroll platform to bring payroll in-house can be transformational for your business and team, and all it takes is a small investment. Apart from making AIS submission easier, it also provides a whole host of benefits, such as:

Control changes over the payroll process

If you need to change a payroll rule, enter a new employee into the system, or change hands with regards to permissions for pay reporting, how long does it take to action those changes? If you’re outsourcing payroll, it entails back and forth conversations which are such a hassle, and you’d have to wait days or even weeks for the changes to be made.

When you have payroll software in-house, you can make instant changes to your processes and start actioning them right away.

Instantly and confidentially access data

When outsourcing to a payroll provider, you’re providing confidential employee information to an external company to manage. They might have stringent security processes and protection, but nothing gives you a better peace of mind than knowing that your data is securely held in-house, and you can easily customise permission settings anytime.

When the data sits directly within your company, it saves so much time and stress for your administrative and payroll team.

Easily connect timesheets and rostering

With everything living on the same platform via payroll software, approved timesheets automatically feed through to payroll. Rostering is also a breeze — with templates, dynamic rostering and budgeting tools.

You not only gain more control over business operations, but also easily manage everything from a centralised source of information. The automation also helps reduce the chance of human error, which makes it a smoother and more enjoyable process for everyone.

Employees have control over their own information

Most administrative staff will know the pains that can be caused by one small data entry mistake. Something as small as entering a number incorrectly into a system can cause hours of headaches to fix down the track.

When you use an in-house system like Employment Hero, employees enjoy self-service functions via mobile and web — allowing them to enter their own payroll details, view and manage their personal information. Even when life circumstances change, they can easily login to the platform and make the necessary edits.

It’s cost-effective

Most people wrongly assume that bringing payroll in-house entails having to hire additional accountants to manage the task. But the truth is, with an automated payroll system, internal payroll will no longer be the manual, time-consuming job it once was.

When using a payroll software, you can set up custom rule sets and automate your pay runs. All the usual manual steps required to process and finalise a pay run such as creating the pay run, importing timesheets, applying leave requests and publishing payslips can all be done in a few clicks. That leaves you with great cost savings — you save on additional headcount, outsourced payroll, and enjoy greater ease and efficiency at the same time.

You can control reporting

You can pull reports on whatever you need instantly, enabling control over your own payroll reports and flexibility to do things the way you want. Source any information you need for a particular time period in just a few clicks.

Interested to learn more about our IRAS approved payroll software? Book a demo with one of our business specialists.

Download this guide now.

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