Singapore Year-End Payroll Activities and 2020 Tips for SAP SuccessFactors Customers
It is coming to the year-end, and sufficient time is required to prepare for the Form IR8A for year-end payroll in Singapore. Contributions to social security schemes such as CPF, the Skill Development Levy, Foreign Workers Levy are done monthly and no tax withholding. However, you may want to validate the total CPF paid based on the Additional Wage (AW) ceiling for CPF contribution and determine the excess or shortfall in contribution.
In most organizations, many of the Benefits-in-Kind (BIK) items are paid outside of payroll. It would be a regular year-end activity to obtain this information from the Finance Department to include them in your payroll system to consolidate them in your tax form preparation.
As an Employer, you are required to complete the IR8A Form, Appendix 8A, Appendix 8B, and Form IR8S (if applicable) to report your employees’ remuneration and provided it to them before 1 March 2021.
It is important to note that From Year of Assessment (YA) 2021, participation in AIS is compulsory for employers with 6 or more employees or who have received the “Notice to File Employment Income Of Employees Electronically under the Auto-Inclusion Scheme (AIS).”
If Employer is included in the Auto-Inclusion Scheme (AIS), you will e-submit the employment income information to IRSA; you do not need to prepare the Form IR8A or Appendix 8A/8B/Form IR8S. You still have the option to report some of the BIK items directly in the IRAS Portal if the information is not readily available when you upload employee income information.
Start submitting from 6 January 2021. The due date is on 1 March every year. Employers are encouraged to submit by 10 February 2021 to avoid a last-minute rush during the peak period.
Here is a list of Singapore year-end payroll activities that should be completed in the December or January timeframe. Before running down the current list, you should make sure to download calendars and pay dates and seek approval of those for the upcoming year.
Singapore Year-End Payroll Activities
Beginning in December/January, here’s a list of tasks that should be completed:
- Record Benefits-In-Kind items for the year 2020. Pay special attention to items that are paid for directly by finance. Use the appropriate wage types created for BIK, mapped to the correct part of the tax form.
- Review of employees with excess or shortfall CPF contribution. Run SAP standard payroll report Year-End CPF Report to list employees. Identify which of the employees may have an excess of CPF contributions that require a refund application to be submitted from the CPF Board. This refund submission is via online services available in the CPF Portal for Employer.
- Use the year-to-date payroll wage type summary report to validate generated IR8A forms before generating the final e-submission file format to be uploaded into IRAS Portal. There is also an option to generate a file in PATLine format, which you can submit to IRAS via the Crimson Logic platform.
- Review HR Support Packs to check if there are changes to Statutory Forms, contributions, etc.
- Test payroll calculations and posting
- SAP SuccessFactors Employee Central Payroll (ECP) customers should test and implement SAP HRSPs (support packs).
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Once you’ve conducted all the tests, reviews, and reminders necessary, you are set to carry out some of the required year-end payroll activities. Here’s what to accomplish in December:
- Ensure all employees on leave have benefits delimited, carry forward and new entitlement generated for 2021
- Validate holiday calendars, pay period, pay dates, provide any required configuration changes
Wrapping up in January
If you’ve done the legwork ahead of time, then that should take some pressure off when it comes to finalizing your year-end payroll and kicking off the next year. In January, you’ll need to reconcile and prepare your IR8A files for submission.
Staying on task with your required Singapore year-end payroll activities will lead to less stress for you and your payroll team.