Category Archives: How To

Part I: Employee Contributions in the Philippines: BIR and SSS

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As an HR admin or payroll admin, it is important to understand how employee contributions work for the social security nets that are in place for Filipinos. There are 4 institutions that you should know about for employee contributions:

  1. Bureau of Internal Revenue (BIR)
  2. Social Security System (SSS)
  3. Philhealth
  4. Home Development Mutual Fund

We will be talking about each of these over the next few blog posts. Let’s start with the first:

Bureau of Internal Revenue

When you are employing someone in the Philippines, the first requirement is to have a Tax Identification Number (TIN) that is registered in the same Revenue District Office (RDO) as your business. The TIN is essential in order to process employee contributions.

  • If the employee does not have a TIN, she must file form 1902 at the RDO where your business is registered.
  • If the employee does have a TIN but is not registered in the same RDO as your business, then she must fill form 1905 and file it at the RDO where her previous employee was registered in order to cancel it.
  • If the employee has a TIN registered at the same RDO as your company’s, then you will have to file form 2305 at the same RDO to update your employee’s information.

Here are all the BIR forms for your convenience.

Social Security Service

All employees in private companies across the country are required to be SSS members. The social security net covers a range of contingencies such as disability, sickness, retirement. Here is a summary of contingencies that the SSS covers. Around 70% of the contribution towards the SSS is made by the employer while 30% is made by the employee. Here is a schedule of contributions based on monthly salary.

First, you need to register your company as an employer in the nearest SSS office by filing Form R1. Along with this, you need to submit a list of employees with their SSS numbers. Note that private companies can only hire employees with SSS numbers. The form that needs to be files is Form R1A. The last form that needs to be submitted is the Specimen Signature Card SS Form L501. With these 3 forms, you will have to submit a sketch of your business address.

You will also have to pay a fee of PHP 160 for an Employer Registration Plate at the SSS or any SSS accredited bank. The list of accredited banks are here (at the bottom of the document). Along with the payment, you need to submit validated Miscellaneous Payment Return – SS Form R6 along with a Special Bank Receipt with this form.

You need to submit Form R1A – the Employment Report – every time a new employee joins. It must be filed within thirty days of the employee receiving the benefits of the coverage. The form must be submitted with the Specimen Signature Card and the 13 digit ER number and business address.

If there are changes to business operations, you need to file an Employer Data Change Request. This way, you will be billed correctly by the SSS.Singapore Payroll

Now that you know what these institutions are and what forms need to be filled, here is our example on how SSS contributions are calculated using PayrollHero software. As a bonus, we also have an example on how BIR taxes are computed.

That’s it for now! Check out our next few posts on Philhealth and Home Development Mutual Fund to find out everything you need to know about employer contributions.

Disclaimer: As always, consult your lawyer or accountant for advice! We are here to help, but your specific situation should be reviewed by a professional with complete knowledge of your situation. 

If you are interested in learning more about PayrollHero for your Philippine business, check out our website at PayrollHero.ph. We would be pleased to chat further about your needs.
Cloud Payroll Software for Philippines

How To Deal with Millennials in the Workforce (video via Jason Dorsey)

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Jason Dorsey is a the Millennials keynote speaker. He delivers great information on how todays young adults operate, how to interact with them in the workplace and why they are so different than generations in the past. Here is a promo video that puts together some snippets from his talks all over the world. A great watch with some funny moments on the differences between baby boomers and todays youth.

Jason Dorsey

Continue reading →

4 Job Boards to Hire Your Best Recruits in Southeast Asia

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unnamed-1Today, there are a mind boggling number of channels to use while searching for the best candidate to join your team. In Singapore, the number one channel for recruiters to hire employees is through an online jobs portal. The other Southeast Asian nations are catching up to the trend. Which means, not only do you have to post in multiple online portals, you also have to stand out from every other company in your industry because everyone is using the most popular channel. We want to help you with that. Here we have a list of jobs portals, both conventional and specialized, for restaurant and retail owners to recruit staff.

Recruitasia: This website is devoted to the hospitality sector in Singapore. This is a great site for very specific roles for your establishment. It also provides industry news so that you can stay ahead of the curve when you are recruiting. Currently, the website is in beta stage. During this stage, jobs can be posted free of charge while the website is adding new features and receiving customer feedback to improve their application procedure.

JobsDB: This website runs ads in many Southeast Asian countries: Singapore, Indonesia, the Philippines, Thailand and China. In Singapore, it currently has 300 positions posted on the website under F&B. In the Philippines, the site features 960 positions. Every recruiting ad costs SGD 99. However, JobsDB is turning over all Job ads to JobStreet.com.ph in order to streamline the two recruiting sites into one.

JobStreet.com: JobStreet runs in Singapore, the Philippines, Malaysia, Indonesia and Vietnam. Currently, the Singapore site is featuring approximately 800 vacant positions in the F&B industry.This is the largest recruitment website in the Philippines and one you cannot miss while posting ads. The Philippine website is currently running a promo package that is 40% off the standard price (the standard price being PHP 5,600). The Singapore website runs 3 packages, based on number of ads you want to post and how long you want them to stay live. The price ranges between SGD 180 to SGD 400.

KalibrrKalibrr: This startup recruitment website works on a completely different pricing strategy. Instead of charging employers per ad, the ads are free and the database is open for employers to find their best candidate. They are charged a minimal fee of PHP 50 only when they want to contact the candidate. This company is becoming increasingly popular in the Philippines with around 1000 applicants signing up every day. Kalibrr features restaurants and retail as the most popular searches. (Disclosure, both Mike Stephenson and Stephen Jagger of PayrollHero are investors in Kalibrr)

These four are a few of the most popular recruiting website in Southeast Asia. We hope this list is useful and do let us know if you have any additions to the list that are unconventional or special to the retail or restaurant industries.

5 Ways to Make your Business Card Stand Out

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With a first glance at the title, you might wonder: Who uses business cards anymore?!

While that might be true in some regions of the world, one of our first lessons in Southeast Asia was the importance of business cards. As a college student, I have been to career workshops in school that devote entire sessions on how to stand out using your business card: from creating a unique design to the way you hand the card to someone you have just met.

So let’s get down to business:

  1. The vertical layout: Usually business cards are horizontal. But if you think about it, the horizontal design does not optimize space. Even if you add details in two columns to use the space effectively, it looks odd. The advantage with the vertical design is, there is plenty of space to add in contact links (LinkedIn, Facebook, Twitter), while also standing out from the other, conventional, horizontal layouts.
  2. Add in your picture: Most business cards have the company’s logo on it. Which is why putting a picture of yourself on the card makes it stand out. Agreed, it takes up inches on your card. But if you can get someone to tag your face to the name, then the purpose of your business card is fulfilled.
  3. QR code: In keeping with the times, a QR code linking to your social media pages or a discount platform on your website will pique interest in your business-card-receiver. It could even link to a landing page which allows you to keep track of who is receiving and looking at your business card. Make sure it works though! You don’t want this to turn into an embarrassment.
  4. Radical designs: This one requires some thought. A banker with a radical business card probably won’t go very far, but if you’re in the restaurant business or any creative industry, it’s worth exploring ideas that can make your card stand out. You can break off from the rectangular layout and try a layout that makes your business
    Image from - http://www.cardfaves.com/images/2012/danielle-yoga-2.jpg

    Image from – http://www.cardfaves.com

    self explanatory. For example, a yoga centre made their business card look like a yoga mat; a bakery made their business card look like a cookie cutter. You can explore with materials as well: there is no rule that says it needs to be made of paper.

  5. Offering your card: Knowing how to give your business card is as important as the card itself. Try not to make it look like your card is given to just about anybody. It’s a unique marketing tool that is handed to someone deliberately and with great regard to who it goes to. Giving it with both hands is a sign of reverence. It also helps if you have a hook when you offer your card, maybe a memorable catch-phrase or a joke. I know, it sounds cheesy, but again, if you can get someone to tag your face to your name, then that cheesy joke is worth a shot.

Bonus Points: In Asia, many people refer to “business cards” as “calling cards”.

Hope these 5 points help. Let us know if you have any more ideas on business cards that stand out.

Singapore Corporate Taxes 102: Auto Inclusion Scheme

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pablo

Our Singapore Corporate Tax lessons are back! (I know what you’re thinking… nothing says exciting like taxes). This time we’ll be talking about how employers in Singapore should handle tax forms for their employees. The IRAS is trying to digitize the entire system by introducing the Auto Inclusion Scheme this year and linking it to CPF contributions. In short, filing tax returns is going to be a smoother, more integrated process.

Under the Income Tax Act, there are four forms that employers should be aware of:

  1. Form IR8A: This is to declare income of all employees
  2. Appendix 8A: This form should be completes if the employee is provided with benefits-in-kind unless these benefits are exempted from Income Tax
  3. Appendix 8B: If the employee has benefited from any Share Ownership Plans, then this needs to be completed
  4. Form IR 8S: Must be completed if excess CPF contributions are made by the employer.

Explanatory notes on each form are here. Income tax returns must be filed for the following people:

  1. Full time resident employees
  2. Part time resident employees
  3. Non-resident employees
  4. Company director (including a non-resident director)
  5. Pensioner and
  6. Employees who have left the organisation within the financial year

For your reference, here are the tax rates for different income brackets:

Taxable Income Bracket Total tax on income below bracket Tax rate on income in bracket
0-20,000 0 0
20,001-30,000 0 2
30,001-40,000 200 3.5
40,001-80,000 550 7
80,001-120,000 3,350 11.5
120,001-160,000 7,950 15
160,001-200,000 13,950 17
200,001-320,000 20,750 18
>320,001 42,350 20

The Auto Inclusion Scheme is a system for recording employee income and tax related information for companies with 12 or more employees for the entire year, ending 31 December 2014. Companies have to submit employee information to IRAS electronically by March 1st of every year, starting from 2015. This way, companies do not need to distribute hard copies of the above forms for employees to file their income tax returns.

If employers use payroll software to generate payroll, then the software can be used to submit files to AIS using another (free) software provided by the IRAS called the Validation and Submission Application. The payroll software should meet the IRAS file format specifications in order to submit forms. The Validation and Submission Application software can be downloaded here.

Once every employee’s details are filled in through AIS, companies should inform their employees to file their tax returns through the myTaxPortal. Employees no longer need to fill in their income and details from the four forms above because the AIS system already has it stored.

Employers who have fewer than 12 employees are also encouraged to use the AIS by filling out this form and emailing it to ais@iras.gov.sg. After submitting the form, companies will also have to go through a trial exercise before joining the AIS.

The AIS system can be linked to CPF Data in order to fill up Form IR 8S easily. The system makes for smooth functionality across the IRAS and CPF platforms. To sign up for the AIS and CPF Data Link-up Service from 2016, this application form must be filled. For existing AIS members who want to use the CPF Data Link-Up Service, this application form must be filled.

Hope this helps! If you want to know how to pay up CPF contributions, we’ve got you covered. More on Tax Clearance and CPF contributions later.

Disclaimer: As always, consult your lawyer or accountant for advice! We are here to help, but your specific situation should be reviewed by a professional with complete knowledge of your situation. 

How to Get an Import License in Singapore

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20140502_150442__1433393282_115.42.154.34

How do you import the best ingredients for that awesome burger?

Scenario 1: Your restaurant is up and running. We’ve got your back with the liquor license. But now, you want to introduce a new segment to your restaurant: modern Japanese. You realize you need to import supplies in order to wow your customers.

Scenario 2: You are running a grocery store and want to sell imported products: meat, fish, eggs, processed food. Your supplies are coming in from all over the world and the suppliers are ready for business.

Your imported supplies need to be approved by Singapore Customs. You need an import license before you do anything else. How do you proceed?

Step 1: You need to register with Agri-Food & Veterinary Authority of Singapore (AVA). But before that you must make sure of the following:

  • Ensure that the imported products comply with the General Classification of Food and Food Products
  • Do note that importing fresh table eggs require an additional screening process to ensure that you have complied with the storage requirements. More on this here.
  • Make sure that the food establishment that is exporting food to Singapore is accredited by AVA. You can check here if the country or food establishment you are importing from is accredited by AVA.
  • An active Unique Entity Number (UEN) with Singapore Customs. To learn how to activate your customs account, click here.
  • A GIRO account for the payment of fees

Step 2: Submit an application to AVA through the e-licensing website. You can apply for a license to import meat, fish products, fresh fruits, vegetables and table eggs. To import processed food products and food appliances, you have to register on the same website (no license).

Step 3: You must pay for your license via GIRO

Here are the charges for licensing and registration fees:

License for Import/Export/Transshipment of Meat and Fish Products SGD 84/year Normal Service:
1 working day to processExpress Service:
Same day processing. Pay an additional fee equal to the cost of your licence
Licence for Import/Transshipment of Fresh Fruits and Vegetables S$378 per annum Normal Service:
1 working day to processExpress Service:
Same day processing. Pay an additional fee equal to the cost of your licence
Licence to Import Table Eggs Free 5 working days to process
Registration to Import Processed Food Products and Food Appliances Free 1 working day to process.

The process is straightforward and quick.

 

The Employer’s Guide to Singapore Work Visas

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https://www.youtube.com/watch?v=SjkXCsMXY-0&feature=youtu.be&rel=0

This video provides an introduction to hiring foreign workers in Singapore- types of visas available to the employee according to skill level, application criteria and levies due to the employer. More information is available on the Ministry of Manpower website

After you have incorporated your business in Singapore, you will need to hire employees, both local or foreign to work for your company. If you are employing non-resident employees in Singapore, as an employer you have to make sure that they hold a valid work pass (also known as work visa).

Professional Work Visa

Pass type

Who is it for

Employment Pass

 For foreign professionals, managers and executives. Candidates need to earn at least S$3,300 a month and have acceptable qualifications.

EntrePass

 For eligible foreign entrepreneurs wanting to start and operate a new business in Singapore.

Personalised Employment Pass

 For high-earning existing Employment Pass holders or overseas foreign professionals. The PEP offers greater flexibility than an Employment Pass. 
 Skilled or Semi- Skilled Workers
Pass type Who is it for

S Pass

 For mid-level skilled staff. Candidates need to earn at least S$2,200 a month and meet the assessment criteria.

Work Permit for foreign worker

 For semi-skilled foreign workers in the construction, manufacturing, marine, process or services sector.

The Foreign Worker Levy

singapore work passesIt is important to note that Singapore companies are required to pay Foreign Worker Levy (FWL) for the Work Pass and S Pass holders. This levy is imposed by the Singapore Government to regulate foreign workers numbers in the country.

The amount of levy due to the employer is determined by the sector the company belongs to and the educational level and skills of the employees. Employing workers with relevant qualifications and skill-based test certificates will count towards your skilled workers, which will entitle you to a concession in the worker’s levy.

Look at this example on the FWL scheme for manufacturing and service sectors. 

Was this post helpful? Comment on this post to let us know!

PayrollHero is live in Singapore. We are completely localized to Singapore’s itemized payroll requirement. We are able to effectively compute the Inland Revenue Authority of Singapore (IRAS) taxes on employee remuneration, CPF employer contributions and deductions, bonuses, contributions to community funds (MDMF, SINDA, CDAC), Foreign Worker Levy and others- for your business in 5 Minutes!

Find out how PayrollHero can provide you the solution you need to optimise your payroll process. Write to us!

How We Use Slack at PayrollHero

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slack payrollhero how toWe moved over from HipChat to Slack a while back and have quite enjoyed the change. While the two products seem similar from the outside, there is something about Slack that is awesome. We use it for everything. It has cut down our internal emails, we have opened channels to deal with our contractors & partners and we have automated a ton of functionality through it.

payroll singapore sg lead formFor example, when a visitor comes to our website and fills in one of the led forms, the information from that form shows up in a few places so that it can be actioned immediately.

To the right is an example of what I’m referring to. Erlich comes to our website, fills in the lead form and sits back for our team to get in touch.

From there, the data from the lead form goes straight into our PipelineDeals account so that we have a record of the lead and can keep track of all interactions involved with it.

pipeline deals payroll

PipelineDeals also sends a message to our main email so that we are notified via email of the new lead.
pipelinedeals payrollWe also have PipelineDeals tied into Zapier which pushes that data into the BD room of our Slack account. This notifies the whole team of the new lead so that anyone outside of the business development team is aware of what is happening on the lead front.
slack and payrollhero

Now the lead is being followed up with by our business development team, the whole PayrollHero team is aware of the new lead (or volume of leads) and if a conversation needs to happen, it will take place within Slack. Simple, but effective use of automation to keep us transparent and on top of our game.

Our others uses of Slack:

– Once a leave request is approved it goes from PayrollHero directly into Slack (via Travel Schedules channel)

– We have city specific channels so that we can talk about what is happening within that city for teammates currently there (Singapore, Manila, Whistler, Vancouver)

– We have contractor channels so that our contracts can interact directly with our team

– There is a reading list channel for shared articles of interest (used to be emailed, now shared there)

– Each department has a channel (BD, marketing, csh, dev, finance, etc)

There is much more happening through our Slack account but this gives you a good idea of how we use it.

How do you use Slack? Any tips for us?  Let us know in the comments below.

Singapore Corporate Taxes101

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Singapore Corporate Taxes101Filing taxes can be a daunting task. Figuring out deductions and what your company is exempted from is complicated enough before you realise that it’s a new financial year, the rules have changed, and now you’re not under the same tax exemptions anymore. We looked around the interwebs for a while and we were stumped. So we decided this problem needs to be fixed.

Over the years, the Singapore government has tried to make the country a tax friendly one for corporates. With a bunch of nifty exemptions, retailers, restauranteurs and growing businesses can breathe a sigh of relief. The government’s got your back. Let’s get down to some important pointers for you to file taxes for your company.

Important Facts:

  1. Rate: The current corporate tax rate is 17%.
  2. Dates:
    • Within 3 months of the company’s financial year end, the Estimated Chargeable Income document must be filed and submitted
    • Every year in April, the IRAS sends Forms C-S or Form C filing package.
    • 30 November: The Paper version of the Corporate Income Tax Form (Forms C-S or Form C) must be submitted. 15 December: The e-File Form of the same document must be submitted. Either the paper or the electronic version must be submitted.
    • FormIR8A, which is a statement of an employee’s remuneration, must be issued for each employee by 1 March of every year.
    • Your company needs to keep records of transactions for a minimum of 5 years. They must be submitted to IRAS upon request.
  3. Use mytax.iras.gov.sg to file your company’s taxes, check or post objections to your tax assessment and apply for exemptions.
  4. Taxes can be paid via internet banking, SAM, AXS station, Cash/NETS or GIRO.

Estimated Chargeable Income: Are you exempted?

The ECI is used to estimate your company’s taxable income. The IRAS notifies you before your ECI file is due. However, as a tax break, if your ECI is zero or your annual revenue is $1 million or less, then you do not have to submit the ECI, even if you have received a notification for it.

The ECI can be filed at mytax.iras.gov.sg. The government will then notify you on the exact tax amount which you have to pay within a month of the notice.

Corporate Income Tax Form

This is the big one. Here is where you declare your actual income in the financial year. It needs to be filed regardless of what your income looks like. There are two types: Form C-S and Form C. For a company with revenue not more than $1 million, Form C-S must be filed.

Exemptions

This is the part we have all been waiting for. With these exemptions, the government makes it easier on a start-up’s cashflows for a few years at least. Go through it because there is some good news for retailers as well.

Tax Exemptions for Start-ups: Start-up companies enjoy 100% tax exemption for the first $100,000 of chargeable income for 3 years. Another 50% exemption can be exercised on the next $200,000 which effectively means the tax rate is 8.5%.

Partial Tax Exemption: From the fourth year onwards, start-ups can exercise the Partial Tax Exemption. Here, 75% of the first $10,000 is exempted and another 50% on the next $290,000 is exempted.

Expenses before starting your business: The government also exempts taxes on expenses incurred the year before your company’s financial year in which you start your business. For example, if you financial year starts in Jan 1 2014 and your first earnings were on June 1 2014, then you will be exempted on paying taxes for expenses incurred between Jan 1 2013 and Dec 31 2013.

Capital Allowances: This one is great for retailers. You are given a capital allowance on fixed assets like electrical equipment, furniture and other fixtures for you company. This is in place of depreciation which is non-deductible.

E-Commerce

Retailers that create income through e-commerce websites have a set of rules that they need to follow. For a franchisee or a branch in Singapore with a franchisor based in a foreign country, the income generated by a website is not liable to taxation in Singapore. This is true even is the company’s customers are in Singapore or not. Check the links below for more details on taxation on e-commerce-centred business.

We hope this was helpful to you! We have put in some great links with guides to fill up your corporate tax forms. Do comment or drop in your email for more handy information!

Basic Corporate Tax Calculator: https://www.iras.gov.sg/irashome/page.aspx?id=6784

Disclaimer: As always, consult your lawyer or accountant for advice! We are here to help, but your specific situation should be reviewed by a professional with complete knowledge of your situation.