Auto Inclusion Scheme (AIS)

What is Auto-Inclusion Scheme (AIS)?

Under the Auto-Inclusion Scheme, or AIS, employers are required to submit their employees’ employment income information to IRAS electronically. IRAS will then auto-include this information in the employees’ online tax returns and assessments.

 

Here’s how the AIS scheme works:

  • If you are the employer, you would first have to prepare all the employment income information, and submit the information using AIS software by March 1st.
  • Then, IRAS auto-includes this information in the employees’ tax returns, so when employees file their tax returns, their employment income would already have been auto-included.
  • You do not need to issue hardcopy IR8A and supporting forms if there are any, to your employees. You can just give a statement of earnings (or a copy of the IR8A) for their reference.
  • By doing so, your employees will benefit from a simpler tax filing process and may also enjoy the No-Filing Service (NFS) in future!

 

Here a glimpse of the entire process:

  1. Employer prepares employment income information
  2. Employer submits income information using AIS software by March 1st
  3. IRAS auto-includes the information in the employee’s tax returns.
  4. Employees file their tax returns with information already auto-included.

 

Which employees are included in the AIS?

In your submission of the employment income information, you will have to include:

  • Full time resident employees;
  • Part-time resident employees;
  • Non-resident employees
  • Company directors (including non-resident directors)
  • Board Members receiving Board/Committee Member Fees
  • Pensioners
  • Employees who have left the organization but were in receipt of income in the reporting year (e.g. stock option gains)

 

Who should be excluded from the AIS?

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 from your submission.

However, the income information of partners who are engaged under an employment contract with the partnership should be included in your submission. 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’.

 

Prepare Information to be Submitted to the AIS

  1. What information to be submitted
  2. Employees to be included in AIS submission

 

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